Exhibit 99.(g)(1)
AMENDED AND RESTATED CUSTODY AGREEMENT
AGREEMENT, dated as of September 15, 2003 between E*TRADE Funds, a
statutory trust organized and existing under the laws of the State of Delaware
having its principal office and place of business at 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxx, XX 00000 (the "Fund"), on behalf of the series listed on Schedule II, as
may be amended from time to time, and The Bank of New York, a New York
corporation authorized to do a banking business having its principal office and
place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth
the Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "Authorized Person" shall be any person, whether or not an officer or
employee of the Fund, duly authorized by the Fund's board of trustees to execute
any Certificate or to give any Oral Instruction with respect to one or more
Accounts, and identified in a Certificate attached hereto as Schedule I, as may
be amended from time to time.
2. "BNY Affiliate" shall mean any office, branch or subsidiary of The Bank
of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering securities, its successors and nominees.
4. "Business Day" shall mean any day on which the Fund, the Custodian and
relevant Depositories are all open for business.
5. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to Custodian,
which is actually received by Custodian by letter or facsimile transmission and
signed on behalf of the Fund by an Authorized Person.
6. "Composite Currency Unit" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "Depository" shall include (a) the Book-Entry System, (b) the Depository
Trust Company, (c) any other clearing agency or securities depository registered
with the Securities and
Exchange Commission identified to the Fund from time to time, and (d) the
respective successors and nominees of the foregoing.
8. "Foreign Custody Manager Agreement" shall mean that certain agreement,
dated as of September 15, 2003, by and between the Fund and the Custodian
pursuant to which the Fund has delegated to the Custodian the responsibility of
serving as the Fund's Foreign Custody Manager, as such term is defined in Rule
17f-5(a)(3) under the Investment Company Act of 1940, as amended ("'40 Act").
9. "Instructions" shall mean communications transmitted by electronic or
telecommunications media, including S.W.I.F.T., computer-to-computer interface,
or dedicated transmission lines.
10. "Oral Instructions" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
11. "Series" shall mean the various portfolios, if any, of the Fund listed
on Schedule II hereto.
12. "Securities" shall have the same meaning assigned to the term
"security" in the Securities Act of 1933, as amended, including, without
limitation, any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange or in the
over-the-counter market relating to a foreign currency, or, in general, any
interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to, or option contract to
purchase or sell any of the foregoing, and futures contracts, forward contracts
and options thereon, but with respect to each of the foregoing, only if the same
are primarily cleared and settled within the United States.
13. "Foreign Depository" shall mean (a) Euroclear, (b) Clearstream Banking,
societe anonyme, (c) each Eligible Securities Depository as defined in Rule
17f-7 under the '40 Act, identified to the Fund from time to time, and (d) the
respective successors and nominees of the foregoing.
14. "Subcustodian" shall mean a bank (including any branch thereof) or
other financial institution (other than a Foreign Depository) located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities hereunder and identified to the Fund from time to time,
and their respective successors and nominees.
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ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, AND WARRANTIES
1. (a) The Fund hereby appoints Custodian as custodian of all Securities
and cash at any time delivered to Custodian during the term of this Agreement,
and authorizes Custodian to hold Securities in registered form in its name or
the name of its nominees. Custodian hereby accepts such appointment and agrees
to establish and maintain one or more securities accounts and cash accounts for
each Series in which Custodian will hold Securities and cash as provided herein.
Custodian shall maintain books and records segregating the assets of each Series
from the assets of any other Series. Such accounts (each, an "Account";
collectively, the "Accounts") shall be in the name of the Fund.
(b) Custodian may from time to time establish on its books and records
such sub-accounts within each Account as the Fund and Custodian may agree upon
(each a "Special Account"), and Custodian shall reflect therein such assets as
the Fund may specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, future commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian shall transfer to such account such Securities and money as the Fund
may specify in a Certificate or Instructions.
2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered by
the Fund, approved by a resolution of its board, constitutes a valid and legally
binding obligation of the Fund, enforceable in accordance with its terms, and
there is no statute, regulation, rule, order or judgment binding on it, and no
provision of its charter or by-laws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property, which would
prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with all
applicable laws and requirements, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted;
(d) It will not knowingly use the services provided by Custodian
hereunder in any manner that is, or will result in, a violation of any law, rule
or regulation applicable to the Fund;
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(e) It is fully informed of the protections and risks associated with
various methods of transmitting Instructions and Oral Instructions and
delivering Certificates to Custodian, understands that there may be more secure
methods of transmitting or delivering the same than the methods selected by the
Fund, agrees that the security procedures (if any) to be utilized provide a
commercially reasonable degree of protection in light of its particular needs
and circumstances, and acknowledges and agrees that Instructions need not be
reviewed by Custodian, may conclusively be presumed by Custodian to have been
given by person(s) duly authorized, and may be acted upon as given;
(f) It shall manage its borrowings, including, without limitation, any
advance or overdraft (including any day-light overdraft) in the Accounts, so
that the aggregate of its total borrowings for each Series does not exceed the
amount such Series is permitted to borrow under the '40 Act;
(g) Its transmission or giving of, and Custodian acting upon and in
reliance on, Certificates, Instructions, or Oral Instructions pursuant to this
Agreement shall at all times comply with the '40 Act;
(h) It shall impose and maintain restrictions on the destinations to
which cash may be disbursed by Instructions to ensure that each disbursement is
for a proper purpose;
(i) It has the right to make the pledge and grant the security
interest to Custodian contained in Section 1 of Article V hereof, free of any
right of redemption or prior claim of any other person or entity, such pledge
and such grants shall have a first priority subject to no setoffs,
counterclaims, or other liens or grants prior to or on a parity therewith, and
it shall take such additional steps as Custodian may require to assure such
priority; and
(j) Its board or its foreign custody manager, as defined in Rule 17f-5
under the '40 Act, has determined that use of each Subcustodian (including any
Replacement Custodian) which Custodian is authorized to utilize in accordance
with Section 1(a) of Article III hereof satisfies the applicable requirements of
the '40 Act and Rule 17f-5 thereunder, provided, however, that the Fund shall
not so represent and warrant upon any delivery of a Certificate or any giving of
Oral Instructions or Instructions by the Fund if the Custodian is serving as the
Fund's foreign custody manager at the time of such delivery or such giving; and
(k) The Fund or its investment adviser has determined that the custody
arrangements of each Foreign Depository provide reasonable safeguards against
the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the '40 Act.
3. The Custodian hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
receipt of a Certificate or of Oral Instructions or Instructions by the Fund,
that:
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(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered by
the Custodian, approved by a resolution of its board, constitutes a valid and
legally binding obligation of the Custodian, enforceable in accordance with its
terms, and there is no statute, regulation, rule, order or judgment binding on
it, and no provision of its charter or by-laws, nor of any mortgage, indenture,
credit agreement or other contract binding on it or affecting its property,
which would prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with all
applicable laws and requirements, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted;
(d) It will not knowingly use the Securities and cash delivered to
Custodian hereunder in any manner that is, or will result in, a violation of any
law, rule or regulation applicable to the Custodian;
(e) It has at least the minimum qualifications required by Section
17(f)(1) of the Investment Company Act of 1940, as amended (the "'40 Act"), to
act as custodian of the portfolio securities and cash of the Fund, and has
indicated its willingness to so act, subject to the terms and conditions of this
Agreement; and
(f) In its capacity as the Fund's Foreign Custody Manager, as defined
in Rule 17f-5 under the '40 Act, it has determined that use of each Subcustodian
(including any Replacement Custodian) which Custodian is authorized to utilize
in accordance with Section 1(a) of Article III hereof satisfies the applicable
requirements of the '40 Act and Rule 17f-5 .
4. The Fund hereby covenants that it shall from time to time complete and
execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or
successor form) whenever the Fund borrows from Custodian any money to be used
for the purchase or carrying of margin stock as defined in Federal Reserve
Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any Securities received by it from time to time for the Fund's account.
Custodian shall be entitled to utilize, subject to subsection (c) of this
Section 1, Depositories, Subcustodians, and, subject to subsection (d) of this
Section 1, Foreign Depositories, to the extent possible in connection with its
performance hereunder. Securities and cash held in a Depository or Foreign
Depository will be held subject to the rules, terms and conditions of such
entity. Securities and cash held through Subcustodians shall be held subject to
the terms and conditions of Custodian's agreements with such Subcustodians.
Subcustodians may be authorized to hold Securities in Foreign Depositories in
which such Subcustodians participate. Unless otherwise required by local law or
practice or a
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particular subcustodian agreement, Securities deposited with a Subcustodian, a
Depositary or a Foreign Depository will be held in a commingled account, in the
name of Custodian, holding only Securities held by Custodian as custodian for
its customers. Custodian shall identify on its books and records the Securities
and cash belonging to the Fund, whether held directly or indirectly through
Depositories, Foreign Depositories, or Subcustodians, and shall provide to the
Fund's independent public accountants access to each Subcustodian's books and
records. Custodian shall, directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold
Securities in the country or other jurisdiction in which the principal trading
market for such Securities is located, where such Securities are to be presented
for cancellation and/or payment and/or registration, or where such Securities
are acquired. Custodian at any time may cease utilizing any Subcustodian and/or
may replace a Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that utilization of such
Replacement Subcustodian satisfies the requirements of the '40 Act and Rule
17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to the
contrary, Custodian shall hold Securities indirectly through a Subcustodian only
if (i) the Securities are not subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors or
operators, including a receiver or trustee in bankruptcy or similar authority,
except for a claim of payment for the safe custody or administration of
Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
(c) With respect to each Depository, Custodian (i) shall exercise due
care in accordance with reasonable commercial standards in discharging its
duties as a securities intermediary to obtain and thereafter maintain Securities
or financial assets deposited or held in such Depository, and (ii) will provide,
promptly upon request by the Fund, such reports as are available concerning the
internal accounting controls and financial strength of Custodian.
(d) With respect to each Foreign Depository, Custodian shall exercise
reasonable care, prudence and diligence: (i) to provide the Fund with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository and with such information which would permit the Fund or its
designee to determine that the Foreign Depository is an Eligible Securities
Depository as defined by Rule 17f-7 under the '40 Act, (ii) to monitor such
custody risks on a continuing basis, to notify the Fund promptly of any material
change in such risks; and annually to provide the Fund or its designee a written
report reciting whether there have, or have not, been any material changes in
the custody risks associated with using such Foreign Depository; and (iii) upon
the instruction of the Fund, to withdraw the Fund's Securities and cash from the
Foreign Depository as soon as reasonably practicable in the event that the
custody arrangement with the Foreign Depository no longer meets the requirements
of Rule 17f-7 under the '40 Act. The Fund acknowledges and agrees that such
analysis and monitoring shall be made on the basis of, and limited by,
information gathered from Subcustodians or through publicly available
information otherwise obtained by Custodian, and shall not include any
evaluation of Country Risks. As used herein the term "Country Risks" shall mean
with respect to any Foreign Depository: (a) the financial infrastructure of the
country in which it is organized, (b)
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such country's prevailing custody and settlement practices, (c) nationalization,
expropriation or other governmental actions, (d) such country's regulation of
the banking or securities industry, (e) currency controls, restrictions,
devaluations or fluctuations, and (f) market conditions which affect the order
execution of securities transactions or affect the value of securities.
2. Custodian shall furnish the Fund on-line access to daily transactions on
a real time or near real time basis (including a confirmation of each transfer
of Securities), a monthly summary of all transfers to or from the Accounts and
periodic reports with respect to the safekeeping of all Securities and cash held
indirectly through a Subcustodian.
3. With respect to all Securities held hereunder, Custodian shall, unless
otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund as
promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all
Securities which mature and advise the Fund as promptly as practicable of any
such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents that it
may actually receive from an issuer of Securities which, in the opinion of
Custodian, are intended for the beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates under any tax laws now or hereafter in effect
in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or a
Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify the Fund of rights or discretionary actions
with respect to Securities held hereunder, and of the date or dates by when such
rights must be exercised or such action must be taken, provided that Custodian
has actually received, from the issuer or the relevant Depository (with respect
to Securities issued in the United States) or from the relevant Subcustodian,
Foreign Depository, or a nationally or internationally recognized bond or
corporate action service to which Custodian subscribes, timely notice of such
rights or discretionary corporate action or of the date or dates such rights
must be exercised or such action must be taken. Absent actual receipt of such
notice, Custodian shall have no liability for failing to so notify the Fund.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order
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for Custodian to act, it must receive the Fund's Certificate or Instructions at
Custodian's offices, addressed as Custodian may from time to time request, not
later than noon (New York time) at least two (2) Business Days prior to the last
scheduled date to act with respect to such Securities (or such earlier date or
time as Custodian may specify to the Fund). Absent Custodian's timely receipt of
such Certificate or Instructions, Custodian shall not be liable for failure to
take any action relating to or to exercise any rights conferred by such
Securities.
5. All voting rights with respect to Securities, however registered, shall
be exercised by the Fund or its designee. For Securities issued in the United
States, Custodian's only duty shall be to mail to the Fund any documents
(including proxy statements, annual reports and signed proxies) actually
received by Custodian relating to the exercise of such voting rights. With
respect to Securities issued outside of the United States, Custodian's only duty
shall be to provide the Fund with access to a provider of global proxy services
at the Fund's request. The Fund shall be responsible for all costs associated
with its use of such services.
6. Custodian shall promptly advise the Fund upon Custodian's actual receipt
of notification of the partial redemption, partial payment or other action
affecting less than all Securities of the relevant class. If Custodian, any
Subcustodian, any Depository, or any Foreign Depository holds any Securities in
which the Fund has an interest as part of a fungible mass, Custodian, such
Subcustodian, Depository, or Foreign Depository may select the Securities to
participate in such partial redemption, partial payment or other action in any
non-discriminatory manner that it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and other
governmental charges, including any interest or penalty with respect thereto
("Taxes"), with respect to any cash or Securities held on behalf of the Fund or
any transaction related thereto. The Fund shall indemnify Custodian for the
amount of any Tax that Custodian or any other withholding agent is required
under applicable laws (whether by assessment or otherwise) to pay on behalf of,
or in respect of income earned by or payments or distributions made to or for
the account of the Fund (including any payment of Tax required by reason of an
earlier failure to withhold). Custodian shall, or shall instruct any appropriate
withholding agent to, withhold the amount of any Tax which is required to be
withheld under applicable law upon collection of any dividend, interest or other
distribution made with respect to any Security and any proceeds or income from
the sale, loan or other transfer of any Security. In the event that Custodian is
required under applicable law to pay any Tax on behalf of the Fund, Custodian is
hereby authorized to withdraw cash from any cash account in the amount required
to pay such Tax and to use such cash, or to remit such cash to the appropriate
withholding agent, for the timely payment of such Tax in the manner required by
applicable law. If the aggregate amount of cash in all cash accounts is not
sufficient to pay such Tax, Custodian shall promptly notify the Fund of the
additional amount of cash (in the appropriate currency) required, and the Fund
shall directly deposit such additional amount in the appropriate cash account
promptly after receipt of such notice, for use by Custodian as specified herein.
In the event that Custodian reasonably believes that Fund is eligible, pursuant
to
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applicable law or to the provisions of any tax treaty, for a reduced rate of, or
exemption from, any Tax which is otherwise required to be withheld or paid on
behalf of the Fund under any applicable law, Custodian shall, or shall instruct
the applicable withholding agent to, either withhold or pay such Tax at such
reduced rate or refrain from withholding or paying such Tax, as appropriate;
provided that Custodian shall have received from the Fund all documentary
evidence of residence or other qualification for such reduced rate or exemption
required to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is obtainable only by means of an application for refund, Custodian shall have
no responsibility for the accuracy or validity of any forms or documentation
provided by the Fund to Custodian hereunder. The Fund hereby agrees to indemnify
and hold harmless Custodian in respect of any liability arising from any
underwithholding or underpayment of any Tax which results from the inaccuracy or
invalidity of any such forms or other documentation provided by the Fund to the
Custodian, and such obligation to indemnify shall be a continuing obligation of
the Fund, its successors and assigns notwithstanding the termination of this
Agreement.
9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the actual settlement of
all sale transactions, based upon advices received by Custodian from
Depositories. Such funds shall be in U.S. dollars or such other currency as the
Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a BNY Affiliate
acting as principal or otherwise through customary banking channels. The Fund
may issue a standing Certificate or Instructions with respect to foreign
exchange transactions, but Custodian may establish rules or limitations
concerning any foreign exchange facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding cash denominated in a
foreign currency.
10. Custodian shall promptly send to the Fund (a) any reports it receives
from a Depository on such Depository's system of internal accounting control,
and (b) such reports on its own system of internal accounting control as the
Fund may reasonably request from time to time.
11. Until such time as Custodian receives a certificate to the contrary
with respect to a particular Security, Custodian may release the identity of the
Fund to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and shareholder.
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ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund, the Fund
shall deliver to Custodian a Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be settled on the same day
the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed simultaneously. Notwithstanding any provision in
this Agreement to the contrary, settlements, payments and deliveries of
Securities may be effected by Custodian in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction in which the transaction occurs, including, without
limitation delivery to a purchaser or dealer therefor (or agent) against receipt
with the expectation of receiving later payment for such Securities. The Fund
assumes full responsibility for all risks, including, without limitation, credit
risks as contemplated in this section hereto, involved in connection with such
deliveries of Securities.
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of Securities or interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will not be
"final" until Custodian shall have received immediately available funds that
under applicable local law, rule and/or practice are irreversible and not
subject to any security interest, levy or other encumbrance, and which are
specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf of
any Series which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Series shall be insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises in the Account of a
particular Series for some other reason, including, without limitation, because
of a reversal of a conditional credit or the purchase of any currency, or if the
Fund is for any other reason indebted to Custodian with respect to a Series
(except a borrowing for investment or for temporary or emergency purposes using
Securities as collateral pursuant to a separate agreement and subject to the
provisions of Section 2 of this Article), such overdraft or indebtedness shall
be deemed to be a loan made by Custodian to the Fund for such Series payable on
demand and shall bear interest
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from the date incurred at a rate per annum as the Fund and Custodian may agree
upon from time to time. In addition, the Fund hereby agrees that to the extent
of the overdraft or indebtedness and interest thereon, Custodian shall have a
continuing lien and security interest in and to any property specifically
allocated to such Series at any time held by Custodian for the benefit of such
Series or in which such Series may have an interest which is then in Custodian's
possession or control or in possession or control of any third party acting in
Custodian's behalf. The Fund authorizes Custodian, in its sole discretion at any
time to charge any such overdraft or indebtedness together with interest due
thereon against any balance of account standing to such Series' credit on
Custodian's books. Custodian shall promptly advise the Fund whenever such Fund
has an overdraft or indebtedness bearing interest as provided in this Article,
or whenever Custodian intends to realize upon its lien or security interest.
2. If the Fund borrows money from any bank (including Custodian if the
borrowing is pursuant to a separate agreement) for investment or for temporary
or emergency purposes using Securities held by Custodian hereunder as collateral
for such borrowings, the Fund shall deliver to Custodian a Certificate
specifying with respect to each such borrowing: (a) the Series to which such
borrowing relates; (b) the name of the bank, (c) the amount of the borrowing,
(d) the time and date, if known, on which the loan is to be entered into, (e)
the total amount payable to the Fund on the borrowing date, (f) the Securities
to be delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount of any particular
Securities, and (g) a statement specifying whether such loan is in conformance
with the '40 Act and the Fund's then-current prospectus and statement of
additional information. Custodian shall deliver on the borrowing date specified
in a Certificate the specified collateral against payment by the lending bank of
the total amount of the loan payable, provided that the same conforms to the
total amount payable as set forth in the Certificate. Custodian may, at the
option of the lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending bank by
virtue of any promissory note or loan agreement. Custodian shall deliver such
Securities as additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this Section. The Fund shall
cause all Securities released from collateral status to be returned directly to
Custodian, for the Account of the Series for which such Securities were last as
collateral, and Custodian shall receive from time to time such return of
collateral as may be tendered to it.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund ("Shares") it
shall deliver to Custodian a Certificate or Instructions specifying the amount
of money and/or Securities to be received by Custodian for the sale of such
Shares and specifically allocated to an Account for the appropriate Series.
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian to
make payment out of the money held by Custodian hereunder in connection with a
redemption of any
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Shares, it shall furnish to Custodian a Certificate or Instructions specifying
the total amount to be paid for such Shares. Custodian shall make payment of
such total amount to the transfer agent specified in such Certificate or
Instructions out of the money held in an Account of the appropriate Series.
ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution on
Shares it shall furnish to Custodian Instructions or a Certificate setting forth
with respect to the Series specified therein the date of the declaration of such
dividend or distribution, the total amount payable, and the payment date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the Account of such Series the
total amount payable to the dividend agent of the Fund specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Custodian shall exercise such good faith, reasonable care,
diligence, and prudence as a professional custodian for securities would
exercise in carrying out all of these duties and obligations. Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories or of any Foreign Depositories,
except in each case to the extent such action or inaction is a direct result of
the Custodian's failure to fulfill its duties hereunder. With respect to any
Losses incurred by the Fund as a result of the acts or any failures to act by
any Subcustodian (other than a BNY Affiliate), Custodian shall take appropriate
action to recover such Losses from such Subcustodian; and Custodian's sole
responsibility and liability to the Fund shall be limited to amounts so received
from such Subcustodian (exclusive of costs and expenses incurred by Custodian),
provided, however, that in no way shall such provision derogate from the
responsibilities of BNY in its capacity as the Fund's Foreign Custody Manager
under the Foreign Custody Manager Agreement to determine that the contract with
such Subcustodian includes indemnification or insurance arrangements (or any
combination) that will adequately protect the Fund against the risk of loss of
Securities or cash held in accordance with the contract.
In no event shall Custodian be liable to the Fund or any third party for
special, indirect or consequential damages, or lost profits or loss of business,
arising in connection with this Agreement, nor shall Custodian be liable:
i. for acting in accordance with any Certificate or Oral
Instructions actually received by Custodian and reasonably
believed by Custodian to be given by an Authorized Person;
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ii. for acting in accordance with Instructions without reviewing
same;
iii. for conclusively presuming that all Instructions are given only
by person(s) duly authorized;
iv. for conclusively presuming that all disbursements of cash
directed by the Fund, whether by a Certificate, an Oral
Instruction, or an Instruction, are in accordance with Section
2(h) of Article II hereof;
v. for any Losses due to forces beyond the reasonable control of
Custodian, including without limitation strikes, work stoppages,
acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, or interruptions, loss or
malfunctions of utilities, non-internal communication services
or, but only to the extent beyond Custodian's reasonable control,
and, but only if Custodian is maintaining such back-up system(s)
and disaster recovery plan(s) as are required by its regulators
and all laws applicable to Custodian, interruption, loss, or
malfunction of internal communication services or of computer
(software or hardware) services; and Custodian shall use
commercially reasonable best efforts to resume performance as
soon as practicable under the circumstances;
vi. for the insolvency of any Subcustodian (other than a BNY
Affiliate), any Depository, or, except to the extent such
liability is a direct result of the Custodian's failure to
fulfill its duties hereunder, any Foreign Depository; or
vii. for any Losses arising from the applicability of any law or
regulation now or hereafter in effect, or from the occurrence of
any event, including, without limitation, implementation or
adoption of any rules or procedures of a Foreign Depository,
which may affect, limit, prevent or impose costs or burdens on,
the transferability, convertibility, or availability of any
currency or Composite Currency Unit in any country or on the
transfer of any Securities, and in no event shall Custodian be
obligated to substitute another currency for a currency
(including a currency that is a component of a Composite Currency
Unit) whose transferability, convertibility or availability has
been affected, limited, or prevented by such law, regulation or
event, and to the extent that any such law, regulation or event
imposes a cost or charge upon Custodian in relation to the
transferability, convertibility, or availability of any cash
currency or Composite Currency Unit, such cost or charge shall be
for the account of the Fund, and Custodian may treat any account
denominated in an affected currency as a group of separate
accounts denominated in the relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms
and conditions as it deems necessary or appropriate to perform
its services hereunder. No such subcontract, agreement or
understanding shall in any way discharge Custodian from its
obligations hereunder.
-13-
(c) The Fund agrees to indemnify Custodian and hold Custodian harmless
from and against any and all Losses sustained or incurred by or asserted against
Custodian, by reason of or as a result of any action or inaction, or arising out
of Custodian's performance hereunder, including reasonable fees and expenses of
counsel, provided, however, that the Fund shall not indemnify Custodian for
those Losses arising out of Custodian's own negligence or willful misconduct or
to any Losses which constitutes indirect, special, or consequential damages or
lost profits or loss of business. Custodian agrees to indemnify the Fund and
hold the Fund harmless from and against any and all Losses, including reasonable
fees and expenses of counsel, sustained or incurred by or asserted against the
Fund arising out of the Custodian's negligence or willful misconduct, provided,
however, that the Custodian shall not indemnify the Fund for any Losses which
constitutes indirect, special, or consequential damages or lost profits or loss
of business. This indemnity shall be a continuing obligation of the Fund and the
Custodian, their successors and assigns, notwithstanding the termination of this
Agreement.
2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a result of
the receipt or acceptance of fraudulent, forged or invalid Securities, or
Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(c) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(d) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor shall
Custodian be under any duty or obligation to see to it that any cash or
collateral delivered to it by a broker, dealer or financial institution or held
by it at any time as a result of such loan of portfolio Securities is adequate
security for the Fund against any loss it might sustain as a result of such
loan, which duty or obligation shall be the sole responsibility of the Fund. In
addition, Custodian shall be under no duty or obligation to see that any broker,
dealer or financial institution to which portfolio Securities of the Fund are
lent makes payment to it of any dividends or interest which are payable to or
for the account of the Fund during the period of such loan or at the termination
of such loan, provided, however that Custodian shall promptly notify the Fund in
the event that such dividends or interest are not paid and received when due;
(g) The sufficiency or value of any amounts of money and/or Securities
held in any Special Account in connection with transactions by the Fund; whether
any broker, dealer,
-14-
futures commission merchant or clearing member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or clearing
member, or whether any payment received by Custodian from any broker, dealer,
futures commission merchant or clearing member is the amount the Fund is
entitled to receive, or (except as hereinafter provided) to notify the Fund of
Custodian's receipt or non-receipt of any such payment, except Custodian shall
notify the Fund of any difference between any amount the Fund has specified in a
Certificate or Instructions as the amount to be received and the amount
Custodian actually receives; or
(h) Whether any Securities at any time delivered to, or held by it for
the account of the Fund and specifically allocated to a Series are such as
properly may be held by the Fund or such Series under the provisions of its then
current prospectus and statement of additional information, or to ascertain
whether any transactions by the Fund, whether or not involving Custodian, are
such transactions as may properly be engaged in by the Fund.
3. Custodian may, with respect to questions of law specifically regarding
an Account, obtain the advice of counsel and shall be fully protected with
respect to anything done or omitted by it in good faith in conformity with such
advice.
4. Custodian shall be under no obligation to take action to collect any
amount payable on Securities in default, or if payment is refused after due
demand and presentment.
5. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any transactions
affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with the conversion of the
Fund's Securities hereunder and the transfer of Securities and records kept in
connection with this Agreement. The Fund shall also reimburse Custodian for
out-of-pocket expenses, subject to approval of the Fund, which are a normal
incident of the services provided hereunder.
7. With Instructions from an Authorized Person or Oral Instructions,
Custodian has the right to debit any cash account for any amount payable by the
Fund in connection with any and all obligations of the Fund to Custodian. In
addition to the rights of Custodian under applicable law and other agreements,
at any time when the Fund shall not have honored any of its obligations to
Custodian, Custodian shall have the right without notice to the Fund to retain
or set-off, against such obligations of the Fund, any Securities or cash
Custodian or a BNY Affiliate may directly or indirectly hold for the account of
the Fund, and any obligations (whether matured or unmatured) that Custodian or a
BNY Affiliate may have to the Fund in any currency or Composite Currency Unit
and shall notify the Fund whenever it has exercised such right.
8. The Fund agrees to forward to Custodian a Certificate or Instructions
confirming Oral Instructions by the close of business of the same day that such
Oral Instructions are given to
-15-
Custodian. The Fund agrees that the fact that such confirming Certificate or
Instructions are not received or that a contrary Certificate or contrary
Instructions are received by Custodian shall in no way affect the validity or
enforceability of transactions authorized by such Oral Instructions and effected
by Custodian. If the Fund elects to transmit Instructions through an on-line
communications system offered by Custodian, the Fund's use thereof shall be
subject to the Terms and Conditions attached as Appendix I hereto, and Custodian
shall provide user and authorization codes, passwords and authentication keys
only to an Authorized Person or a person reasonably believed by Custodian to be
an Authorized Person.
9. The books and records pertaining to the Fund which are in possession of
Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the '40 Act and the rules thereunder. The
Fund, its authorized representatives, all regulatory authorities whose statutes,
laws, rules and regulations are applicable to the Fund shall have access to such
books and records during Custodian's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
Custodian to the Fund or its authorized representative. Upon the reasonable
request of the Fund, Custodian shall provide in hard copy or on computer disc
any records included in any such delivery which are maintained by Custodian on a
computer disc, or are similarly maintained.
10. It is understood that Custodian is authorized to supply any information
regarding the Accounts which is required by any law, regulation or rule now or
hereafter in effect. Custodian shall provide the Fund with any report obtained
by Custodian on the system of internal accounting control of a Depository, and
with such reports on its own system of internal accounting control as the Fund
may reasonably request from time to time.
11. Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, the Fund shall designate
a successor custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits. In the event such notice is given by Custodian, the Fund shall, on or
before the termination date, deliver to Custodian a written notice designating a
successor custodian or custodians. In the absence of such designation by the
Fund, Custodian may designate a successor custodian which shall be a bank or
trust company having not less than $2,000,000 aggregate capital, surplus and
undivided profits. Upon the date set forth in such notice this Agreement shall
terminate, and Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date deliver directly to the successor custodian all
Securities and money then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses and other amounts for the payment or reimbursement
of which it shall then be entitled.
-16-
2. If a successor custodian is not designated by the Fund or Custodian in
accordance with the preceding Section, the Fund shall upon the date specified in
the notice of termination of this Agreement and upon the delivery by Custodian
of all Securities (other than Securities which cannot be delivered to the Fund)
and money then owned by the Fund be deemed to be its own custodian and Custodian
shall thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities which cannot be
delivered to the Fund to hold such Securities hereunder in accordance with this
Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of Authorized
Persons in the event of any change in the then present Authorized Persons. Until
such new Certificate is received, Custodian shall be fully protected in acting
upon Certificates or Oral Instructions of such present Authorized Persons.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and received by it at its offices at 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxx, XX 00000, or at such other place as the Fund may from time to time
designate in writing.
4. Each and every right granted to either party hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
by either party of any right preclude any other or future exercise thereof or
the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. This Agreement
shall extend to and shall be binding upon the parties hereto, and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and
-17-
Custodian hereby consent to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted
by applicable law, any objection which it may now or hereafter have to the
laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby irrevocably waives any and all rights
to trial by jury in any legal proceeding arising out of or relating to this
Agreement.
7. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
8. The Fund and Custodian agree that obligations of each Series are not
binding upon any of the Trustees, officers or shareholders of the Fund and its
assets individually, but are binding only upon that Series and its assets. Each
Series shall be severally, not jointly, liable only for its own obligations
under this Agreement.
-18-
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
E*TRADE Funds
By:
------------------------------------
Title:
Tax Identification No:
THE BANK OF NEW YORK
By:
------------------------------------
Title:
-19-
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly
elected and acting of E*TRADE Funds (the "Fund"), and
further certifies
------------------------
that the following officers or employees of the Fund have been duly authorized
in conformity with the Fund's Declaration of Trust and By-Laws to deliver
Certificates and Oral Instructions to The Bank of New York ("Custodian")
pursuant to the Custody Agreement between the Fund and Custodian dated
, and that the signatures appearing opposite their names are true
---------------
and correct:
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
----------------------------- ----------------------- ----------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you may
currently have on file.
[seal] By:
------------------------------------
Title:
Date:
SCHEDULE II
SERIES
E*TRADE Money Market Fund
E*TRADE Government Money Market Fund
E*TRADE Municipal Money Market Fund
E*TRADE Premier Money Market Fund*
E*TRADE California Municipal Money Market Fund
E*TRADE New York Municipal Money Market Fund
E*TRADE Asset Allocation Fund
E*TRADE Bond Fund
E*TRADE International Index Fund
E*TRADE Xxxxxxx 2000 Index Fund
E*TRADE S&P 500 Index Fund
E*TRADE Technology Index Fund
* E*TRADE Premier Money Market Fund shall remain subject to this Agreement until
the completion of the reorganization of the Premier Money Market Fund with and
into the E*TRADE Money Market Fund.
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to an Authorized Person of the Fund of
software enabling the Fund to obtain access to the System (the "Software"),
Custodian grants to the Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Written
Instructions, receiving reports, making inquiries or otherwise communicating
with Custodian in connection with the Account(s). The Fund shall use the
Software solely for its own internal and proper business purposes and not in the
operation of a service bureau. Except as set forth herein, no license or right
of any kind is granted to the Fund with respect to the Software. The Fund
acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know-how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or other
statutory or legal protections available in respect thereof. The Fund further
acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by Custodian or its
suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall you attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy, sell,
lease or provide, directly or indirectly, any of the Software or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory copyright notice or other notice included
in the Software or on any media containing the Software. The Fund shall
reproduce any such notice on any reproduction of the Software and shall add any
statutory copyright notice or other notice to the Software or media upon
Custodian's request. Custodian shall be responsible for all costs, if any,
associated with such requests in the preceding sentence.
2. Equipment. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. Proprietary Information. The Software, any data base and any proprietary
data, processes, information and documentation made available to the Fund (other
than which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of Custodian or its suppliers. The Fund
shall keep the Information confidential by using
the same care and discretion that the Fund uses with respect to its own
confidential property and trade secrets, but not less than reasonable care. Upon
termination of the Agreement or the Software license granted herein for any
reason, the Fund shall return to Custodian any and all copies of the Information
which are in its possession or under its control.
4. Modifications. Custodian reserves the right to modify the Software from
time to time and the Fund shall install new releases of the Software as
Custodian may reasonably direct. Custodian shall be responsible for all costs,
if any, associated with the installation of such new releases. The Fund agrees
not to modify or attempt to modify the Software without Custodian's prior
written consent. The Fund acknowledges that any modifications to the Software,
whether by the Fund or Custodian and whether with or without Custodian's
consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND
SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE,
SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE
PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS
OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR
MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR
OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL, PROVIDED THAT REASONABLE
BACK-UP AND DISASTER RECOVER SYSTEMS WERE IN PLACE.
6. Security; Reliance; Unauthorized Use. The Fund will cause all persons
utilizing the Software and System to treat all applicable user and authorization
codes, passwords and authentication keys with the same care that such persons
would use with respect to the Fund's own computer Software and System, and it
will establish reasonable internal control and safekeeping procedures to
restrict the availability of the same persons duly authorized to give
Instructions. Custodian is hereby authorized to reasonably act in accordance
with and reasonably rely on Instructions received by it from an Authorized
Person through the System. The Fund acknowledges that it is its sole
responsibility to assure that only persons duly authorized use the System and
that Custodian shall not be responsible nor liable for any unauthorized use
thereof.
7. System Acknowledgments. Custodian shall acknowledge through the System
its receipt of each transmission communicated through the System, and in the
absence of such acknowledgment Custodian shall not be liable for any failure to
act in accordance with such transmission, provided Custodian did not receive
such acknowledgment.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may not be
available for every communication through the System, or for all data. The Fund
agrees that Custodian may deactivate any encryption features at any time upon
one business day's notice to the Fund, without further notice or liability to
the Fund, for the purpose of maintaining, repairing or troubleshooting the
System or the Software.
