Common use of Creation and Declaration of Trust Clause in Contracts

Creation and Declaration of Trust. Business of the Trust. (a) The Trustee acknowledges that an initial deposit of 100 British Pounds under and in accordance with this Agreement has been made in the Interest Account by the Sponsor on the date hereof in exchange for one Share. The Sponsor is purchasing the initial Share solely for the purpose of forming the Trust. The Sponsor will redeem the initial Share for 100 British Pounds as promptly as practicable after the Form S-1 registration statement filed with the Commission with respect to the Shares is declared effective by the Commission and the Initial Purchaser, as defined in the registration statement, deposits British Pounds in accordance with the registration statement. (b) The Trustee declares that it will hold that initial deposit and all other Trust Property as trustee for the benefit of the Registered Owners for the purposes of, and subject to and limited by the terms and conditions set forth in, this Agreement. The trust created by this Agreement shall be known as the "CurrencyShares(SM) British Pound Sterling Trust".