CUSTODIAN AGREEMENT
between
INFORMATION AGE PORTFOLIO
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
1. Definitions........................................................1-2
2. Employment of Custodian and Property to be Held by it................2
3. Duties of the Custodian with Respect to Property of the Trust........3
A. Safekeeping and Holding of Property........................... .3
B. Delivery of Securities.........................................3-6
C. Registration of Securities.......................................6
D. Bank Accounts....................................................6
E. Payments for Interests, or Increases in Interests, in the Trust..6
F. Investment and Availability of U.S. Federal Funds........... ....7
G. Collections......................................................7
H. Payment of Trust Monies........................................8-9
I. Liability for Payment in Advance of Receipt of Securities
Purchased... ...............................9
J. Payments for Reductions or Redemptions of Interests of the Trust.9
K. Appointment of Agents by the Custodian....................... ..10
L. Deposit of Trust Portfolio Securities in Securities Systems..10-12
M. Deposit of Trust Commercial Paper in an Approved Book-Entry
System for Commercial Paper................................12-13
N. Segregated Account............ ................14
O. Ownership Certificates for Tax Purposes.........................14
P. Proxies.........................................................14
Q. Communications Relating to Trust Portfolio Securities...........14
R. Exercise of Rights; Tender Offers..............................15
S. Depository Receipts.............................................15
T. Interest Bearing Call or Time Deposits.......................15-16
U. Options, Futures Contracts and Foreign Currency Transactions.16-17
V. Actions Permitted Without Express Authority..................17-18
4. Records and Miscellaneous Duties....................................18
5. Opinion of Trust's Independent Public Accountants...................18
6. Compensation and Expenses of Bank.................................. 18
7. Responsibility of Bank....... ...................................19
8. Persons Having Access to Assets of the Trust.................... 19-20
9. Effective Period, Termination and Amendment; Successor Custodian....20
10. Interpretive and Additional Provisions.............................21
11. Notices............................................................21
12. Massachusetts Law to Apply.........................................21
CUSTODIAN AGREEMENT
This Agreement is made between the Information Age Portfolio (hereinafter
called the "Trust"), a New York trust having its principal place of business in
Xxxxxx Town, Grand Cayman, Cayman Islands, BWI, and Investors Bank & Trust
Company (hereinafter called "Bank", "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, the Trust is registered under the Investment Company Act of 1940
and has appointed the Bank to act as Custodian of its property and to perform
certain duties as its Agent, as more fully hereinafter set forth; and
Whereas, the Bank is willing and able to act as the Trust's Custodian and
Agent, subject to and in accordance with the provisions hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, the Trust and the Bank agree as
follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Board" shall mean the board of trustees of the Trust.
(b) "The Depository Trust Company", a clearing agency registered with the U.S.
Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has
been specifically approved as a securities depository for the Trust by the
Board.
(c) "Participants Trust Company", a clearing agency registered with the U.S.
Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has
been specifically approved as a securities depository for the Trust by the
Board.
(d) "Approved Clearing Agency" shall mean any other domestic clearing agency
registered with the U.S. Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934 which acts as a securities
depository.
(e) "Federal Book-Entry System" shall mean the book-entry system referred to in
Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of
Subpart O).
(f) "Approved Foreign Securities Depository" shall mean a non-U.S. securities
depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for non-U.S. securities.
(g) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form.
(h) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or
persons as the Board shall have from time to time authorized to give the
particular class of instructions in question. Different persons may be
authorized to give instructions for different purposes. A certified copy of
a resolution of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to
the contrary. Such instructions may be general or specific in terms and,
where appropriate, may be standing instructions. Unless the resolution
delegating authority to any person or persons to give a particular class of
instructions specifically requires that the approval of any person, persons
or committee shall first have been obtained before the Custodian may act on
instructions of that class, the Custodian shall be under no obligation to
question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the
Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. The Trust shall cause all oral instructions to be confirmed in
writing. The Trust authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Trust as to the
authorization by the President and the Treasurer of the Trust accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Trust, "proper instructions" may also
include communications effected directly between electromechanical or
electronic devices provided that the President and Treasurer of the Trust
and the Custodian are satisfied that such procedures afford adequate
safeguards for the Trust's assets. In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for the Trust, the Custodian may take cognizance of
the provisions of the governing documents and registration statement of the
Trust as the same may from time to time be in effect (and resolutions or
proceedings of the holders of interests in the Trust or the Board), but,
nevertheless, except as otherwise expressly provided herein, the Custodian
may assume unless and until notified in writing to the contrary that
so-called proper instructions received by it are not in conflict with or in
any way contrary to any provisions of such governing documents and
registration statement, or resolutions or proceedings of the holders of
interests in the Trust or the Board.
(i) "Trust" shall mean the Trust, as the context may require.
(j) The term "Vote" when used with respect to the Board or the Holders of
Interests in the Trust shall include a vote, resolution, consent,
proceeding and other action taken by the Board or Holders in accordance
with the Declaration of Trust or By-Laws of the Trust.
2. Employment of Custodian and Property to be Held by It
The Trust hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Trust agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Trust from time to time, and the cash
consideration received by it from time to time in exchange for an interest in
the Trust or for an increase in such an interest. The Custodian shall not be
responsible for any property of the Trust held by the Trust and not delivered by
the Trust to the Custodian. The Trust will also deliver to the Bank from time to
time copies of its currently effective declaration of trust, by-laws,
registration statement and placement agent agreement with its placement agent,
together with such resolutions, and other proceedings of the Trust as may be
necessary for or convenient to the Bank in the performance of its duties
hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Trust held by such subcustodian. Any
non-U.S. subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the non-U.S. custody arrangements shall be approved by the
Board and shall be in accordance with and subject to the provisions of said
Rule. For the purposes of this Agreement, any property of the Trust held by any
such subcustodian (domestic or foreign) shall be deemed to be held by the
Custodian under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Trust
A. Safekeeping and Holding of Property The Custodian shall keep safely all
property of the Trust and on behalf of the Trust shall from time to time
receive delivery of Trust property for safekeeping. The Custodian shall
hold, earmark and segregate on its books and records for the account of the
Trust all property of the Trust, including all securities, participation
interests and other assets of the Trust (1) physically held by the
Custodian, (2) held by any subcustodian referred to in Section 2 hereof or
by any agent referred to in Paragraph K hereof, (3) held by or maintained
in The Depository Trust Company or in Participants Trust Company or in an
Approved Clearing Agency or in the Federal Book-Entry System or in an
Approved Foreign Securities Depository, each of which from time to time is
referred to herein as a "Securities System", and (4) held by the Custodian
or by any subcustodian referred to in Section 2 hereof and maintained in
any Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities The Custodian shall release and deliver securities
or participation interests owned by the Trust held (or deemed to be held)
by the Custodian or maintained in a Securities System account or in an
Approved Book-Entry System for Commercial Paper account only upon receipt
of proper instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or participation interests for the the
Trust, but only against receipt of payment therefor; if delivery is made in
Boston or New York City, payment therefor shall be made in accordance with
generally accepted clearing house procedures or by use of U.S. Federal
Reserve Wire System procedures; if delivery is made elsewhere payment
therefor shall be in accordance with the then current "street delivery"
custom or in accordance with such procedures agreed to in writing from time
to time by the parties hereto; if the sale is effected through a Securities
System, delivery and payment therefor shall be made in accordance with the
provisions of Paragraph L hereof; if the sale of commercial paper is to be
effected through an Approved Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made in accordance with the
provisions of Paragraph M hereof; if the securities are to be sold outside
the United States, delivery of the securities for the account of the Trust
may be made either (a) in advance of receipt of payment therefor in the
absence of specific instructions to do so provided such actions are
consistent with local settlement practices and customs, subject to the
Custodian's standard of care, or (b) in accordance with procedures agreed
to in writing from time to time by the parties hereto; for the purposes of
this subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by the Trust
and (ii) upon the failure by the Trust to make a successful bid with
respect to a portfolio security, the continued holding of which is
contingent upon the making of such a bid;
2) Upon the receipt of payment in connection with any repurchase agreement or
reverse repurchase agreement relating to such securities and entered into
by the Trust;
3) To the depository agent in connection with tender or other similar offers
for portfolio securities of the Trust;
4) To the issuer thereof or its agent when such securities or participation
interests are called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other consideration is to be
delivered to the Custodian or any subcustodian employed pursuant to Section
2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name of the
Trust or into the name of any nominee of the Custodian or into the name or
nominee name of any agent appointed pursuant to Paragraph K hereof or into
the name or nominee name of any subcustodian employed pursuant to Section 2
hereof; or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities or participation
interests are to be delivered to the Custodian or any subcustodian employed
pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with the
"street delivery" custom; provided that the Custodian shall adopt such
procedures as the Trust from time to time shall approve to ensure their
prompt return to the Custodian by the broker in the event the broker elects
not to accept them;
7) For exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the securities of the
issuer of such securities, or pursuant to provisions for conversion of such
securities, or pursuant to any deposit agreement; provided that, in any
such case, the new securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the surrender
thereof in connection with the exercise of such warrants, rights or similar
securities, or the surrender of interim receipts or temporary securities
for definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by the Trust
(such loans to be made pursuant to the terms of the Trust's current
registration statement), but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Trust, which may be
in the form of cash or obligations issued by the United States government,
its agencies or instrumentalities; except that in connection with any
securities loans for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S. Department of
Treasury, the Custodian will not be held liable or responsible for the
delivery of securities loaned by the Trust prior to the receipt of such
collateral;
10) For delivery as security in connection with any borrowings by the Trust
requiring a pledge or hypothecation of assets by the Trust (if then
permitted under circumstances described in the current registration
statement of the Trust), provided, that the securities shall be released
only upon payment to the Custodian of the monies borrowed, except that in
cases where additional collateral is required to secure a borrowing already
made, further securities may be released for that purpose; upon receipt of
proper instructions, the Custodian may pay any such loan upon redelivery to
it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
11) When required for delivery in connection with any reduction of or
redemption of an interest in the Trust in accordance with the provisions of
Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement between the
Custodian (or a subcustodian employed pursuant to Section 2 hereof) and a
broker-dealer registered under the Securities Exchange Act of 1934 and, if
necessary, the Trust, relating to compliance with the rules of The Options
Clearing Corporation or of any registered national securities exchange, or
of any similar organization or organizations, regarding deposit or escrow
or other arrangements in connection with options transactions by the Trust;
13) For delivery in accordance with the provisions of any agreement among the
Trust, the Custodian (or a subcustodian employed pursuant to Section 2
hereof), and a futures commissions merchant, relating to compliance with
the rules of the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar organization, regarding
futures margin account deposits or payments in connection with futures
transactions by the Trust;
14) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a resolution of the
Board specifying the securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such purpose to be proper
corporate purpose, and naming the person or persons to whom delivery of
such securities shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Trust shall be registered in the name
of the Trust or in the name of any nominee of the Trust or of any nominee of the
Custodian, or in the name or nominee name of any agent appointed pursuant to
Paragraph K hereof, or in the name or nominee name of any subcustodian employed
pursuant to Section 2 hereof, or in the name or nominee name of The Depository
Trust Company or Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for Commercial Paper;
provided, that securities are held in an account of the Custodian or of such
agent or of such subcustodian containing only assets of the Trust or only assets
held by the Custodian or such agent or such subcustodian as a custodian or
subcustodian or in a fiduciary capacity for customers. All certificates for
securities accepted by the Custodian or any such agent or subcustodian on behalf
of the Trust shall be in "street" or other good delivery form or shall be
returned to the selling broker or dealer who shall be advised of the reason
thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank
account or accounts in the name of the Trust, subject only to draft or order by
the Custodian acting pursuant to the terms of this Agreement, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received by
it from or for the account of the Trust other than cash maintained by the Trust
in a bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the Trust may be
deposited by it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as the Custodian may in its
discretion deem necessary or desirable; provided, however, that every such bank
or trust company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved in writing by
two officers of the Trust. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be subject to withdrawal only by the Custodian
in that capacity.
E. Payment for Interests, or Increases in Interests, in the Trust The
Custodian shall make appropriate arrangements with the Transfer Agent of the
Trust to enable the Custodian to make certain it promptly receives the cash or
other consideration due to the Trust for payment of interests in the Trust, or
increases in such interests, in accordance with the governing documents and
registration statement of the Trust. The Custodian will provide prompt
notification to the Trust of any receipt by it of such payments.
F. Investment and Availability of U.S. Federal Funds Upon agreement between
the Trust and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed appropriate by
the parties, invest in such securities and instruments as may be set forth in
such instructions on the same day as received all federal funds received after a
time agreed upon between the Custodian and the Trust.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which the Trust
shall be entitled either by law or pursuant to custom in the securities
business, and shall promptly collect all income and other payments with respect
to bearer securities if, on the date of payment by the issuer, such securities
are held by the Custodian or agent thereof and shall credit such income, as
collected, to the Trust's custodian account. The Custodian shall do all things
necessary and proper in connection with such prompt collections and, without
limiting the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called, redeemed,
retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Trust, checks,
drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System or in an
Approved Book-Entry System for Commercial Paper at the time funds become
available to the Custodian; in the case of securities maintained in The
Depository Trust Company funds shall be deemed available to the Trust not
later than the opening of business on the first business day after receipt
of such funds by the Custodian. The Custodian shall notify the Trust as
soon as reasonably practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does not receive any
due and unpaid income after it has made demand for the same, it shall
immediately so notify the Trust in writing, enclosing copies of any demand
letter, any written response thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await instructions from the Trust;
the Custodian shall in no case have any liability for any nonpayment of
such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action
for collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights
and other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. Payment of Trust Monies Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures contracts purchased
for the account of the Trust but only (a) against the receipt of
(i) such securities registered as provided in Paragraph C hereof or in
proper form for transfer or
(ii) detailed instructions signed by an officer of the Trust regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase by the Trust of the options,
futures contracts, forward contracts or options on futures contracts by the
Custodian (or by a subcustodian employed pursuant to Section 2 hereof or by a
clearing corporation of a national securities exchange of which the Custodian is
a member or by any bank, banking institution or trust company doing business in
the United States or abroad which is qualified under the Investment Company Act
of 1940 to act as a custodian and which has been designated by the Custodian as
its agent for this purpose or by the agent specifically designated in such
instructions as representing the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through a Securities System,
upon receipt of the securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the case of a purchase of
commercial paper effected through an Approved Book-Entry System for Commercial
Paper, upon receipt of the paper by the Custodian or subcustodian in accordance
with the conditions set forth in Paragraph M hereof; (d) in the case of
repurchase agreements entered into between the Trust and another bank or a
broker-dealer, against receipt by the Custodian of the securities underlying the
repurchase agreement either in certificate form or through an entry crediting
the Custodian's segregated, non-proprietary account at the Federal Reserve Bank
of Boston with such securities along with written evidence of the agreement by
the bank or broker-dealer to repurchase such securities from the Trust; or (e)
in the case of securities purchased outside the United States, the Custodian may
make payment therefor either (i) in advance of receipt of such securities in the
absence of specific instructions to do so provided such actions are consistent
with local settlement practices and customs, subject to the Custodian's standard
of care, or (ii) in accordance with procedures agreed to in writing from time to
time by the parties hereto;
2) When required in connection with the conversion, exchange or surrender
of securities owned by the Trust as set forth in Paragraph B hereof;
3) When required for the reduction or redemption of an interest in the
Trust in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the Trust,
including but not limited to the following payments for the account of the
Trust: advisory fees, interest, taxes, management compensation and expenses,
accounting, transfer agent and legal fees, and other operating expenses of the
Trust whether or not such expenses are to be in whole or part capitalized or
treated as deferred expenses; and
5) For distributions or payments to Holders of Interest of the Trust.
6) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a resolution of the Board,
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased In
any and every case where payment for purchase of securities for the account of
the Trust is made by the Custodian in advance of receipt of the securities
purchased in the absence of specific written instructions signed by two officers
of the Trust to so pay in advance, the Custodian shall be absolutely liable to
the Trust for such securities to the same extent as if the securities had been
received by the Custodian; except that in the case of a repurchase agreement
entered into by the Trust with a bank which is a member of the Federal Reserve
System, the Custodian may transfer funds to the account of such bank prior to
the receipt of (i) the securities in certificate form subject to such repurchase
agreement or (ii) written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the Federal Reserve
Bank of Boston or (iii) the safekeeping receipt, provided that such securities
have in fact been so transferred by book-entry and the written repurchase
agreement is received by the Custodian in due course; and except that if the
securities are to be purchased outside the United States, payment may be made in
accordance with procedures agreed to in writing from time to time by the parties
hereto. Notwithstanding any other provision in this Agreement to the contrary,
where securities are purchased or sold outside the United States, delivery of
securities for the account of the Trust may be made by the Custodian in advance
of receipt of payment for the securities sold, and the Custodian may pay for
securities in advance of receipt of the securities purchased for the account of
the Trust, in the absence of specific instructions to do so provided such
actions are consistent with local settlement practices and customs, subject to
the Custodian's standard of care.
J. Payments for Reductions or Redemptions of Interests in the Trust From
such funds as may be available for the purpose, but subject to any applicable
resolutions of the Board and the current procedures of the Trust, the Custodian
shall, upon receipt of written instructions from the Trust or from the Trust's
transfer agent make funds and/or portfolio securities available for payment to
holders of interest in the Trust which have caused the amount of their interests
to be reduced, or for their interest to be redeemed.
K. Appointment of Agents by the Custodian The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company (provided such bank or trust company is itself qualified under the
Investment Company Act of 1940 to act as a custodian or is itself an eligible
foreign custodian within the meaning of Rule 17f-5 under said Act) as the agent
of the Custodian to carry out such of the duties and functions of the Custodian
described in this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent shall not relieve the
Custodian of any of its responsibilities or liabilities hereunder, and as
between the Trust and the Custodian the Custodian shall be fully responsible for
the acts and omissions of any such agent. For the purposes of this Agreement,
any property of the Trust held by any such agent shall be deemed to be held by
the Custodian hereunder.
L. Deposit of Trust Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the Trust
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, and at all times
subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2 keep securities of the Trust in a Securities
System provided that such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to securities of the Trust
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Trust, and the Custodian shall be fully and
completely responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Trust's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry form for
the account of the Trust only upon (i) receipt of notice or advice from the
Securities System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Trust; except that when such
securities are purchased outside the United States, payment therefor may be made
by the Custodian in advance of receipt of such notice or advice and the making
of such entry in the absence of specific instructions to do so provided such
actions are consistent with local settlement practices and customs, subject to
the Custodian's standard of care. The Custodian shall transfer securities sold
for the account of the Trust only upon (i) receipt of notice or advice from the
Securities System that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Trust; except that when
such securities are sold outside the United States, transfer thereof may be made
by the Custodian in advance of receipt of such notice or advice and the making
of such entry in the absence of specific instructions to do so provided such
actions are consistent with local settlement practices and customs, subject to
the Custodian's standard of care. Copies of all notices or advices from the
Securities System of transfers of securities for the account of the Trust shall
identify the Trust, be maintained for the Trust by the Custodian and be promptly
provided to the Trust at its request. The Custodian shall promptly send to the
Trust confirmation of each transfer to or from the account of the Trust in the
form of a written advice or notice of each such transaction, and shall furnish
to the Trust copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the Trust on the next
business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to the Securities
System's accounting system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities System; the Custodian
shall promptly send to the Trust any report or other communication relating to
the Custodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the Custodian shall ensure
that any agent appointed pursuant to Paragraph K hereof or any subcustodian
employed pursuant to Section 2 hereof shall promptly send to the Trust and to
the Custodian any report or other communication relating to such agent's or
subcustodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System. The Custodian's books and records
relating to the Trust's participation in each Securities System will at all
times during regular business hours be open to the inspection of the Trust's
authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence of
receipt of a certificate of an officer of the Trust that the Board has approved
the use of a particular Securities System; the Custodian shall also obtain
appropriate assurance from the officers of the Trust that the Board has annually
reviewed the continued use by the Trust of each Securities System, and the Trust
shall promptly notify the Custodian if the use of a Securities System is to be
discontinued; at the request of the Trust, the Custodian will terminate the use
of any such Securities System as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or subcustodians
or of any of its or their employees or from any failure of the Custodian or any
such agent or subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the election of the Trust,
it shall be entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if and to the
extent that the Trust has not been made whole for any such loss or damage.
M. Deposit of Trust Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to each issue
of direct issue commercial paper purchased by the Trust, the Custodian may
deposit and/or maintain direct issue commercial paper owned by the Trust in any
Approved Book-Entry System for Commercial Paper, in each case only in accordance
with applicable Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more subcustodians
employed pursuant to Section 2) keep commercial paper of the Trust in an
Approved Book-Entry System for Commercial Paper, provided that such paper is
issued in book entry form by the Custodian or subcustodian on behalf of an
issuer with which the Custodian or subcustodian has entered into a book-entry
agreement and provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or such subcustodian in an
Approved Book-Entry System for Commercial Paper which shall not include any
assets of the Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of the
Trust which is maintained in an Approved Book-Entry System for Commercial Paper
shall identify by book-entry each specific issue of commercial paper purchased
by the Trust which is included in the System and shall at all times during
regular business hours be open for inspection by authorized officers, employees
or agents of the Trust. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately and currently
stating the Trust's holdings of commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in book-entry
form for the account of the Trust only upon contemporaneous (i) receipt of
notice or advice from the issuer that such paper has been issued, sold and
transferred to the Account, and (ii) the making of an entry on the records of
the Custodian to reflect such purchase, payment and transfer for the account of
the Trust. The Custodian shall transfer such commercial paper which is sold or
cancel such commercial paper which is redeemed for the account of the Trust only
upon contemporaneous (i) receipt of notice or advice that payment for such paper
has been transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer or redemption and payment for
the account of the Trust. Copies of all notices, advices and confirmations of
transfers of commercial paper for the account of the Trust shall identify the
Trust, be maintained for the Trust by the Custodian and be promptly provided to
the Trust at its request. The Custodian shall promptly send to the Trust
confirmation of each transfer to or from the account of the Trust in the form of
a written advice or notice of each such transaction, and shall furnish to the
Trust copies of daily transaction sheets reflecting each day's transactions in
the System for the account of the Trust on the next business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to each System's
accounting system, system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the Custodian shall
promptly send to the Trust any report or other communication relating to the
Custodian's internal accounting controls and procedures for safeguarding
commercial paper deposited in any Approved Book-Entry System for Commercial
Paper; and the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to Section 2 hereof
shall promptly send to the Trust and to the Custodian any report or other
communication relating to such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence of
receipt of a certificate of an officer of the Trust that the Board has approved
the use of a particular Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the officers of the Trust
that the Board has annually reviewed the continued use by the Trust of each
Approved Book-Entry System for Commercial Paper, and the Trust shall promptly
notify the Custodian if the use of an Approved Book-Entry System for Commercial
Paper is to be discontinued; at the request of the Trust, the Custodian will
terminate the use of any such System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System for
Commercial Paper is maintained by the subcustodian) shall issue physical
commercial paper or promissory notes whenever requested to do so by the Trust or
in the event of an electronic system failure which impedes issuance, transfer or
custody of direct issue commercial paper by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting from use of any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the Custodian or any of
its agents or subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System, the issuer of the
commercial paper or any other person; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the System, the issuer of the commercial paper or any other person
which the Custodian may have as a consequence of any such loss or damage if and
to the extent that the Trust has not been made whole for any such loss or
damage.
N. Segregated Account The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts for and on
behalf of the Trust, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Trust, the Custodian and any registered broker-dealer
(or any futures commission merchant), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in connection
with transactions by the Trust, (ii) for purposes of segregating cash or U.S.
Government securities in connection with options purchased, sold or written by
the Trust or futures contracts or options thereon purchased or sold by the
Trust, (iii) for the purposes of compliance by the Trust with the procedures
required by Investment Company Act Release No. 10666, or any subsequent release
or releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies and (iv)
for other proper purposes, but only, in the case of clause (iv), upon receipt
of, in addition to proper instructions, a certificate signed by two officers of
the Trust, setting forth the purpose such segregated account and declaring such
purpose to be a proper purpose.
O. Ownership Certificates for Tax Purposes The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of the Trust held by it and in connection with transfers of
securities.
P. Proxies The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Trust all forms of proxies and
all notices of meetings and any other notices or announcements or other written
information affecting or relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be required. Neither the
Custodian nor its nominee shall vote upon any of the securities or execute any
proxy to vote thereon or give any consent or take any other action with respect
thereto (except as otherwise herein provided) unless ordered to do so by proper
instructions.
Q. Communications Relating to Trust Portfolio Securities The Custodian
shall deliver promptly to the Trust all written information (including, without
limitation, pendency of call and maturities of securities and participation
interests and expirations of rights in connection therewith and notices of
exercise of call and put options written by the Trust and the maturity of
futures contracts purchased or sold by the Trust) received by the Custodian from
issuers and other persons relating to the securities and participation interests
being held for the Trust. With respect to tender or exchange offers, the
Custodian shall deliver promptly to the Trust all written information received
by the Custodian from issuers and other persons relating to the securities and
participation interests whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer.
R. Exercise of Rights; Tender Offers In the case of tender offers, similar
offers to purchase or exercise rights (including, without limitation, pendency
of calls and maturities of securities and participation interests and
expirations of rights in connection therewith and notices of exercise of call
and put options and the maturity of futures contracts) affecting or relating to
securities and participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for promptly notifying the
Trust of all such offers in accordance with the standard of reasonable care set
forth in Section 8 hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Trust shall have responsibility
for providing the Custodian with all necessary instructions in timely fashion.
Upon receipt of proper instructions, the Custodian shall timely deliver to the
issuer or trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or sold upon
proper receipt therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired by such action are
to be delivered to the Custodian or any subcustodian employed pursuant to
Section 2 hereof. Upon receipt of proper instructions, the Custodian shall
timely deposit securities upon invitations for tenders of securities upon proper
receipt therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered securities are to
be returned to the Custodian or subcustodian employed pursuant to Section 2
hereof. Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary by proper instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall thereafter promptly notify the Trust in writing of such
action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to the
depository used by an issuer of American Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as "ADRs") for such
securities, against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Custodian that the
depository has acknowledged receipt of instructions to issue with respect to
such securities ADRs in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section 2 hereof, for
delivery to the Custodian or such subcustodian at such place as the Custodian or
such subcustodian may from time to time designate. The Custodian shall, upon
receipt of proper instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs surrendered and written
evidence satisfactory to the Custodian that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall, upon receipt
of proper instructions, place interest bearing fixed term and call deposits with
the banking department of such banking institution (other than the Custodian)
and in such amounts as the Trust may designate. Deposits may be denominated in
U.S. Dollars or other currencies. The Custodian shall include in its records
with respect to the assets of the Trust appropriate notation as to the amount
and currency of each such deposit, the accepting banking institution and other
appropriate details and shall retain such forms of advice or receipt evidencing
the deposit, if any, as may be forwarded to the Custodian by the banking
institution. Such deposits shall be deemed portfolio securities of the Trust for
the purposes of this Agreement, and the Custodian shall be responsible for the
collection of income from such accounts and the transmission of cash to and from
such accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
1. Options The Custodian shall, upon receipt of proper instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Trust, relating to compliance
with the rules of the Options Clearing Corporation or of any registered national
securities exchange or similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the purchase or writing of
an option on a security or securities index or other financial instrument or
index by the Trust; deposit and maintain in a segregated account for the Trust,
either physically or by book-entry in a Securities System, securities subject to
a covered call option written by the Trust; and release and/or transfer such
securities or other assets only in accordance with a notice or other
communication evidencing the expiration, termination or exercise of such covered
option furnished by the Options Clearing Corporation, the securities or options
exchange on which such covered option is traded or such other organization as
may be responsible for handling such options transactions. The Custodian and the
broker-dealer shall be responsible for the sufficiency of assets held in the
Trust's segregated account in compliance with applicable margin maintenance
requirements.
2. Futures Contracts The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if any,
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Trust; deposit and maintain in a segregated account, for the
benefit of any futures commission merchant, assets designated by the Trust as
initial, maintenance or variation "margin" deposits (including xxxx-to-market
payments) intended to secure the Trust's performance of its obligations under
any futures contracts purchased or sold or any options on futures contracts
written by the Trust, in accordance with the provisions of any agreement or
agreements among the Trust, the Custodian and such futures commission merchant,
designed to comply with the rules of the Commodity Futures Trading Commission
and/or of any contract market or commodities exchange or similar organization
regarding such margin deposits or payments; and release and/or transfer assets
in such margin accounts only in accordance with any such agreements or rules.
The Custodian and the futures commission merchant shall be responsible for the
sufficiency of assets held in the segregated account in compliance with the
applicable margin maintenance and xxxx-to-market payment requirements.
3. Foreign Exchange Transactions The Custodian shall, pursuant to proper
instructions, enter into or cause a subcustodian to enter into currency exchange
contracts or options to purchase and sell non-U.S. currencies for spot and
future delivery on behalf and for the account of the Trust. Such transactions
may be undertaken by the Custodian or subcustodian with such banking or
financial institutions or other currency brokers, as set forth in proper
instructions. Currency exchange contracts and options shall be deemed to be
portfolio securities of the Trust; and accordingly, the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Trust. The
Custodian shall be responsible for the transmittal to and receipt of cash from
the currency broker or banking or financial institution with which the contract
or option is made, the maintenance of proper records with respect to the
transaction and the maintenance of any segregated account required in connection
with the transaction. The Custodian shall have no duty with respect to the
selection of the currency brokers or banking or financial institutions with
which the Trust deals or for their failure to comply with the terms of any
contract or option. Without limiting the foregoing, it is agreed that upon
receipt of proper instructions and insofar as funds are made available to the
Custodian for the purpose, the Custodian may (if determined necessary by the
Custodian to consummate a particular transaction on behalf and for the account
of the Trust) make free outgoing payments of cash in the form of U.S. dollars or
other currency before receiving confirmation of a currency exchange contract or
confirmation that the countervalue currency completing the currency exchange
contract has been delivered or received. The Custodian shall not be responsible
for any costs and interest charges which may be incurred by the Trust or the
Custodian as a result of the failure or delay of third parties to deliver
currency exchange; provided that the Custodian shall nevertheless be held to the
standard of care set forth in, and shall be liable to the Trust in accordance
with, the provisions of Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Trust:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Agreement,
provided, that all such payments shall be accounted for by the Custodian to the
Treasurer of the Trust and shall be subject to subsequent approval by an officer
of the Trust;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Trust, checks, drafts and
other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Trust except as otherwise directed by the Trust.
4. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable U.S. federal and state tax laws and any other law or administrative
rules or procedures which may be applicable to the Trust. All books of account
and records maintained by the Bank in connection with the performance of its
duties under this Agreement shall be the property of the Trust, shall at all
times during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Trust, and in the event of
termination of this Agreement shall be delivered to the Trust or to such other
person or persons as shall be designated by the Trust. Disposition of any
account or record after any required period of preservation shall be only in
accordance with specific instructions received from the Trust. At the request of
the Trustees or duly authorized agent of the Trust located outside the United
States, The Bank shall assist generally in the preparation of reports to holders
of interest in the Trust, to the Securities and Exchange Commission, including
Form N-SAR, and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Trust's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Trust, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
5. Opinion of Trust's Independent Public Accountants
The Custodian shall take all reasonable action, as the Trust may from time
to time request, to enable the Trust to obtain from year to year favorable
opinions from the Trust's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Trust's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
6. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Trust and the
Bank. The Bank shall be entitled to receive from the Trust on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
7. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Trust) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a non-U.S.
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a non-U.S. banking institution,
a non-U.S. securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Trust to maintain
custody of any securities or cash of the Trust in other than the U.S. and Canada
including, but not limited to, losses resulting from governmental actions and
restrictions, nationalization, expropriation, currency restrictions, acts of
war, civil war or terrorism, insurrection, revolution, military or usurped
powers, nuclear fission, fusion or radiation, earthquake, storm or other
disturbance of nature or acts of God.
If the Trust requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Trust being liable for the payment of money or incurring
liability of some other form, the Trust, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
8. Persons Having Access to Assets of the Trust
(i) No trustee, officer, employee or agent of the Trust shall have physical
access to the assets of the Trust held by the Custodian or be authorized or
permitted to withdraw any investments of the Trust, nor shall the Custodian
deliver any assets of the Trust to any such person. No officer or director,
employee or agent of the Custodian who holds any similar position with the Trust
or the investment adviser or the administrator of the Trust shall have access to
the assets of the Trust.
(ii) Access to assets of the Trust held hereunder shall only be available
to duly authorized officers, employees, representatives or agents of the
Custodian or other persons or entities for whose actions the Custodian shall be
responsible to the extent permitted hereunder, or to the Trust's independent
public accountants in connection with their auditing duties performed on behalf
of the Trust.
(iii) Nothing in this Section 8 shall prohibit any officer, employee or
agent of the Trust or of the investment adviser of the Trust from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Trust prohibited by paragraph
(i) of this Section 8.
9. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, that
the Trust may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Trust shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding "voting securities" of
the Trust (as defined in the Investment Company Act of 1940) vote to have the
securities, funds and other properties held hereunder delivered and paid over to
some other bank or trust company, specified in the vote, having not less than
$2,000,000 of aggregate capital, surplus and undivided profits, as shown by its
last published report, and meeting such other qualifications for custodians set
forth in the Investment Company Act of 1940, the Board shall, forthwith, upon
giving or receiving notice of termination of this Agreement, appoint as
successor custodian, a bank or trust company having such qualifications. The
Bank, as Custodian, Agent or otherwise, shall, upon termination of the
Agreement, deliver to such successor custodian, all securities then held
hereunder and all funds or other properties of the Trust deposited with or held
by the Bank hereunder and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
In the event that no such vote has been adopted by the shareholders and that no
written order designating a successor custodian shall have been delivered to the
Bank on or before the date when such termination shall become effective, then
the Bank shall not deliver the securities, funds and other properties of the
Trust to the Trust but shall have the right to deliver to a bank or trust
company doing business in Boston, Massachusetts of its own selection, having an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than $2,000,000, all funds, securities and properties of the
Trust held by or deposited with the Bank, and all books of account and records
kept by the Bank pursuant to this Agreement, and all documents held by the Bank
relative thereto. Thereafter such bank or trust company shall be the successor
of the Custodian under this Agreement.
10. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing signed
by both parties and shall be annexed hereto, provided that no such interpretive
or additional provisions shall contravene any applicable U.S. federal or state
regulations or any provision of the governing instruments of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
11. Notices
Notices and other writings delivered or mailed postage prepaid to the Trust
addressed to The Bank of Nova Scotia Trust Company (Cayman) Limited, The Bank of
Nova Scotia Building, Xxxxxx Town, Grand Cayman, Cayman Islands, WMI, or to such
other address as the Trust may have designated to the Bank, in writing with a
copy to Xxxxx Xxxxx Management at 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, or to Investors Bank & Trust Company, 00 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 with a copy to Xxxxx Xxxxx Management at 00 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, shall be deemed to have been properly delivered or
given hereunder to the respective addressees.
12. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
The Custodian expressly acknowledges the provision in the Declaration of
Trust of the Trust (Section 5.2 and 5.6) limiting the personal liability of the
Trustees and officers of the Trust, and the Custodian hereby agrees that it
shall have recourse to the Trust for payment of claims or obligations as between
the Trust and the Custodian arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the Trust.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
June 19, 1995.
INFORMATION AGE PORTFOLIO
By:/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
Executed in Xxxxxxxx, Bermuda
INVESTORS BANK & TRUST COMPANY
By:/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx,
Executive Managing Director
INFORMATION AGE PORTFOLIO
PROCEDURES FOR ALLOCATIONS
AND DISTRIBUTIONS
June 1, 1995
TABLE OF CONTENTS
ARTICLE I--Introduction .................................................... 1
I--Definitions ............................................................. 1
ARTICLE III--Capital Accounts
Section 3.1 Capital Accounts of Holders ......................3
Section 3.2 Book Capital Accounts ............................4
Section 3.3 Tax Capital Accounts .............................4
Section 3.4 Compliance with Treasury Regulations..............4
ARTICLE IV--Distributions of Cash and Assets
Section 4.1 Distributions of Distributable Cash ..............5
Section 4.2 Division Among Holders ...........................5
Section 4.3 Distributions Upon Liquidation of a Holder's
Interest in the Trust ............................5
Section 4.4 Amounts Withheld .................................5
ARTICLE V--Allocations
Section 5.1 Allocation of Items to Book Capital
Accounts .......................................5
Section 5.2 Allocation of Taxable Income and Tax Loss
to Tax Capital Accounts........................6
Section 5.3 Special Allocations to Book and Tax Capital
Accounts .....................................7
Section 5.4 Other Adjustments to Book and Tax Capital
Accounts .....................................7
Section 5.5 Timing of Tax Allocations to Book and Tax
Capital Accounts .............................7
Section 5.6 Redemptions During the Fiscal Year................7
ARTICLE VI--Withdrawals
Section 6.1 Partial Withdrawals ..............................7
Section 6.2 Redemptions ......................................7
Section 6.3 Distribution in Kind..............................8
ARTICLE VII--Liquidation
Section 7.1 Liquidation Procedure ............................8
Section 7.2 Alternative Liquidation Procedure ................8
Section 7.3 Cash Distributions Upon Liquidation ..............8
Section 7.4 Treatment of Negative Book Capital
Account Balance ................................8
PROCEDURES FOR
ALLOCATIONS AND DISTRIBUTIONS
OF
INFORMATION AGE PORTFOLIO
(the "Trust")
ARTICLE I
Introduction
The Trust is treated as a partnership for federal income tax purposes.
These procedures have been adopted by the Trustees of the Trust and will be
furnished to the Trust's accountants for the purpose of allocating Trust gains,
income or loss and distributing Trust assets. The Trust will maintain its books
and records, for both book and tax purposes, using the accrual method of
accounting.
ARTICLE II
Definitions
Except as otherwise provided herein, a term referred to herein shall have
the same meaning as that ascribed to it in the Declaration. References in this
document to "hereof", "herein" and "hereunder" shall be deemed to refer to this
document in its entirety rather than the article or section in which any such
word appears.
"Book Capital Account" shall mean, for any Holder at any time in any Fiscal
Year, the Book Capital Account balance of the Holder on the first day of the
Fiscal Year, as adjusted each day pursuant to the provisions of Section 3.2
hereof.
"Capital Contribution" shall mean, with respect to any Holder, the amount
of money and the Fair Market Value of any assets actually contributed from time
to time to the Trust with respect to the Interest held by such Holder.
"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended from
time to time, as well as any non-superseded provisions of the Internal Revenue
Code of 1954, as amended (or any corresponding provision or provisions of
succeeding law).
"Declaration" shall mean the Trust's Declaration of Trust, dated June 1,
1995, as amended from time to time.
"Designated Expenses" shall mean extraordinary Trust expenses attributable
to a particular Holder that are to be borne by such Holder.
"Distributable Cash" for any Fiscal Year shall mean the gross cash proceeds
from Trust activities, less the portion thereof used to pay or establish
Reserves, plus such portion of the Reserves as the Trustees, in their sole
discretion, no longer deem necessary to be held as Reserves. Distributable Cash
shall not be reduced by depreciation, amortization, cost recovery deductions, or
similar allowances.
"Fair Market Value" of a security, instrument or other asset on any
particular day shall mean the fair value thereof as determined in good faith by
or on behalf of the Trustees in the manner set forth in the Registration
Statement.
"Fiscal Year" shall mean an annual period determined by the Trustees which
ends on such day as is permitted by the Code.
"Holders" shall mean as of any particular time all holders of record of
Interests in the Trust.
"Interest(s)" shall mean the interest of a Holder in the Trust, including
all rights, powers and privileges accorded to Holders by the Declaration, which
interest may be expressed as a percentage, determined by calculating, at such
times and on such bases as the Trustees shall from time to time determine, the
ratio of each Holder's Book Capital Account balance to the total of all Holders'
Book Capital Account balances.
"Investments" shall mean all securities, instruments or other assets of the
Trust of any nature whatsoever, including, but not limited to, all equity and
debt securities, futures contracts, and all property of the Trust obtained by
virtue of holding such assets.
"Matched Income or Loss" shall mean Taxable Income, Tax-Exempt Income or
Tax Loss of the Trust comprising interest, original issue discount and dividends
and all other types of income or loss to the extent the Taxable Income,
Tax-Exempt Income, Tax Loss or Loss items not included in Tax Loss arising from
such items are recognized for tax purposes at the same time that Profit or Loss
are accrued for book purposes by the Trust.
"Net Unrealized Gain" shall mean the excess, if any, of the aggregate Fair
Market Value of all Investments over the aggregate adjusted bases, for federal
income tax purposes, of all Investments.
"Net Unrealized Loss" shall mean the excess, if any, of the aggregate
adjusted bases, for federal income tax purposes, of all Investments over the
aggregate Fair Market Value of all Investments.
"Profit" and "Loss" shall mean, for each Fiscal Year or other period, an
amount equal to the Taxable Income or Tax Loss for such Fiscal Year or period
with the following adjustments:
(i) Any Tax-Exempt Income shall be added to such Taxable Income or
subtracted from such Tax Loss; and
(ii) Any expenditures of the Trust for such year or period described in
Section 705(a)(2)(B) of the Code or treated as expenditures under Section
705(a)(2)(B) of the Code pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profit
or Loss or specially allocated shall be subtracted from such Taxable Income or
added to such Tax Loss.
"Redemption" shall mean the complete withdrawal of an Interest of a Holder
the result of which is to reduce the Book Capital Account balance of that Holder
to zero.
"Registration Statement" shall mean the Registration Statement of the Trust
on Form N-1A as filed with the U.S. Securities and Exchange Commission under the
1940 Act, as the same may be amended from time to time.
"Reserves" shall mean, with respect to any Fiscal Year, funds set aside or
amounts allocated during such period to reserves which shall be maintained in
amounts deemed sufficient by the Trustees for working capital and to pay taxes,
insurance, debt service, renewals, or other costs or expenses, incident to the
ownership of the Investments or to its operations.
"Tax Capital Account" shall mean, for any Holder at any time in any Fiscal
Year, the Tax Capital Account balance of the Holder on the first day of the
Fiscal Year, as adjusted each day pursuant to the provisions of Section 3.3
hereof.
"Tax-Exempt Income" shall mean income of the Trust for such Fiscal Year or
period that is exempt from federal income tax and not otherwise taken into
account in computing Profit or Loss.
"Tax Lot" shall mean securities or other property which are both purchased
or acquired, and sold or otherwise disposed of, as a unit.
"Taxable Income" or "Tax Loss" shall mean the taxable income or tax loss of
the Trust, determined in accordance with Section 703(a) of the Code, for each
Fiscal Year as determined for federal income tax purposes, together with each of
the Trust's items of income, gain, loss or deduction which is separately stated
or otherwise not included in computing taxable income and tax loss.
"Treasury Regulations" shall mean the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" shall mean Information Age Portfolio, a trust fund formed under the
laws of the State of New York by the Declaration.
"Trustees" shall mean each signatory to the Declaration, so long as
such signatory shall continue in office in accordance with the terms thereof,
and all other individuals who at the time in question have been duly elected or
appointed and have qualified as Trustees in accordance with the provisions
thereof and are then in office.
The "1940 Act" shall mean the U.S. Investment Company Act of 1940, as
amended from time to time, and the rules and regulations thereunder.
ARTICLE III
Capital Accounts
3.1. Capital Accounts of Holders. A separate Book Capital Account and a
separate Tax Capital Account shall be maintained for each Holder pursuant to
Section 3.2 and Section 3.3. hereof, respectively. In the event the Trustees
shall determine that it is prudent to modify the manner in which the Book
Capital Accounts or Tax Capital Accounts, or any debits or credits thereto, are
computed in order to comply with the Treasury Regulations, the Trustees may make
such modification, provided that it is not likely to have a material effect on
the amounts distributable to any Holder pursuant to Article VII hereof upon the
dissolution of the Trust.
3.2. Book Capital Accounts. The Book Capital Account balance of each Holder
shall be adjusted each day by the following amounts:
(a) increased by any increase in Ne Unrealized Gains or decrease in Net
Unrealized Losses allocated to such Holder pursuant to Section 5.1(a) hereof;
(b) decreased by any decrease in Net Unrealized Gains or increase in Net
Unrealized Losses allocated to such Holder pursuant to Section 5.1(b) hereof;
(c) increased or decreased, as the case may be, by the amount of Profit or
Loss, respectively, allocated to such Holder pursuant to Section 5.1(c) hereof;
(d) increased by any Capital Contribution made by such Holder; and,
(e) decreased by any distribution, including any distribution to effect a
withdrawal or Redemption,
made to such Holder by the Trust.
Any adjustment pursuant to Section 3.2 (a), (b) or (c) above shall be
prorated for increases in each Holder's Book Capital Account balance resulting
from Capital Contributions, or distributions or withdrawals from the Trust or
Redemptions by the Trust occurring, during such Fiscal Year as of the day after
the Capital Contribution, distribution, withdrawal or Redemption is accepted,
made or effected by the Trust.
3.3. Tax Capital Accounts. The Tax Capital Account balance of each Holder
shall be adjusted at the following times by the following amounts:
(a) increased daily by the adjusted tax bases of any Capital Contribution
made by such Holder to the Trust;
(b) increased daily by the amount of Taxable Income and Tax-Exempt
Income allocated to such Holder pursuant to Section 5.2 hereof at such times as
the allocations are made under Section 5.2 hereof;
(c) decreased daily by the amount of cash distributed to the Holder
pursuant to any of these procedures including any distribution made to effect a
withdrawal or Redemption; and
(d) decreased by the amount of Tax Loss allocated to such Holder
pursuant to Section 5.2 hereof at such times as the allocations are made under
Section 5.2 hereof.
3.4. Compliance with Treasury Regulations. The foregoing provisions and
other provisions contained herein relating to the maintenance of Book Capital
Accounts and Tax Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Treasury Regulations.
The Trustees shall make any appropriate modifications in the event
unanticipated events might otherwise cause these procedures not to comply with
Treasury Regulations Section 1.704-1(b), including the requirements described in
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(1) and Treasury Regulations
Section 1.704-1(b)(2)(iv). Such modifications are hereby incorporated into these
procedures by this reference as though
fully set forth herein.
ARTICLE IV
Distributions of Cash and Assets
4.1. Distributions of Distributable Cash. Except as otherwise provided
in Article VII hereof, Distributable Cash for each Fiscal Year may be
distributed to the Holders at such times, if any, and in such amounts as shall
be determined in the sole discretion of the Trustees. In exercising such
discretion, the Trustees shall distribute such Distributable Cash so that
Holders that are regulated investment companies can comply with the distribution
requirements set forth in Code Section 852 and avoid the excise tax imposed by
Code Section 4982.
4.2. Division Among Holders. All distributions to the Holders with
respect to any Fiscal Year pursuant to Section 4.1 hereof shall be made to the
Holders in proportion to the Taxable Income, Tax-Exempt Income or Tax Loss
allocated to the Holders with respect to such Fiscal Year pursuant to the terms
of these procedures.
4.3. Distributions Upon Liquidation of a Holder's Interest in the
Trust. Upon liquidation of a Holder's interest in the Trust, the proceeds will
be distributed to the Holder as provided in Section 5.6, Article VI, and Article
VII hereof. If such Holder has a negative book capital account balance, the
provisions of Section 7.4 will apply.
4.4. Amounts Withheld. All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any payment or
distribution to the Trust or the Holders shall be treated as amounts distributed
to such Holders pursuant to this Article IV for all purposes under these
procedures. The Trustees may allocate any such amount among the Holders in any
manner that is in accordance with applicable law.
ARTICLE V
Allocations
5.1. Allocation of Items to Book Capital Accounts.
(a) Increase in Net Unrealized Gains or Decrease in Net Unrealized
Losses. Any decrease in Net Unrealized Loss due to realization of items shall be
allocated to the Holder receiving the allocation of Loss, in the same amount,
under Section 5.1(c) hereof. Subject to Section 5.1(d) hereof, any increase in
Net Unrealized Gains or decrease in Net Unrealized Loss on any day during the
Fiscal Year shall be allocated to the Holders' Book Capital Accounts at the end
of such day, in proportion to the Holders' respective Book Capital Account
balances at the commencement of such day.
(b) Decrease in Net Unrealized Gains or Increase in Net Unrealized
Losses. Any decrease in Net Unrealized Gains due to realization of items shall
be allocated to the Holder receiving the allocation of Profit, in the same
amount, under Section 5.1(c) hereof. Subject to Section 5.1(d) hereof, any
decrease in Net Unrealized Gains or increase in Net Unrealized Loss on any day
during the Fiscal Year shall be allocated to the Holders' Book Capital Accounts
at the end of such day, in proportion to the Holders' respective Book Capital
Account balances at the commencement of such day.
(c) Profit and Loss. Subject to Section 5.1(d) hereof, Profit and Loss
occurring on any day during the Fiscal Year shall be allocated to the Holders'
Book Capital Accounts at the end of such day in proportion to the Holders'
respective Book Capital Account balances at the commencement of such day.
(d) Other Book Capital Account Adjustments.
(i) Any allocation pursuant to Section 5.1(a), (b) or (c)
above shall be prorated for increases in each Holder's Book Capital
Account resulting from Capital Contributions, or distributions or
withdrawals from the Trust or Redemptions by the Trust occurring,
during such Fiscal Year as of the day after the Capital Contribution,
distribution, withdrawal or Redemption is accepted, made or effected by
the Trust.
(ii) For purposes of determining the Profit, Loss, and Net
Unrealized Gain or Net Unrealized Loss or any other item allocable to
any Fiscal Year, Profit, Loss, and Net Unrealized Gain or Net
Unrealized Loss and any such other item shall be determined by or on
behalf of the Trustees using any reasonable method under Code Section
706 and the Treasury Regulations thereunder.
5.2. Allocation of Taxable Income and Tax Loss to Tax Capital Accounts.
(a) Taxable Income and Tax Loss. Subject to Section 5.2(b) and Section
5.3 hereof, which shall take precedence over this Section 5.2(a), Taxable Income
or Tax Loss for any Fiscal Year shall be allocated at least annually to the
Holders' Tax Capital Accounts as follows:
(i) First, Taxable Income and Tax Loss, whether constituting
ordinary income (or loss) or capital gain (or loss), derived from the
sale or other disposition of a Tax Lot of securities or other property
shall be allocated as of the date such income, gain or loss is
recognized for federal income tax purposes solely in proportion to the
amount of unrealized appreciation (in the case of such income or
capital gain, but not in the case of any such loss) or depreciation (in
the case of any such loss, but not in the case of any such income or
capital gain) from that Tax Lot which was allocated to the Holders'
Book Capital Accounts each day that such securities or other property
was held by the Trust pursuant to Section 5.1(a) and (b) hereof; and
(ii) Second, any remaining amounts at the end of the Fiscal
Year, to the Holders in proportion to their respective daily average
Book Capital Account balances determined for the Fiscal Year of the
allocation.
(b) Matched Income or Loss. Notwithstanding the provisions of Section
5.2(a) hereof, Taxable Income, Tax-Exempt Income or Tax Loss accruing on any day
during the Fiscal Year constituting Matched Income or Loss, shall be allocated
daily to the Holders' Tax Capital Accounts solely in proportion to and to the
extent of corresponding allocations of Profit or Loss to the Holders' Book
Capital Accounts pursuant to the first sentence of Section 5.1(c) hereof.
5.3. Special Allocations to Book and Tax Capital Accounts.
(a) The Designated Expenses computed for each Holder shall be allocated
separately (not included in the allocations of Matched Income or Loss, Loss or
Tax Loss) to the Book Capital Account and Tax Capital Account of each Holder.
(b) If the Trust incurs any nonrecourse indebtedness, then allocations
of items attributable to nonrecourse indebtedness shall be made to the Tax
Capital Account of each Holder in accordance with the requirements of Treasury
Regulations Section 1.704-1(b)(4)(iv)(d).
(c) In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, Taxable Income and Tax Loss with respect to any property contributed
to the capital of the Trust shall be allocated to the Tax Capital Account of
each Holder so as to take into account any variation between the adjusted tax
basis of such property to the Trust for federal income tax purposes and such
property's Fair Market Value at the time of contribution to the Trust.
5.4. Other Adjustments to Book and Tax Capital Accounts.
(a) Any election or other decision relating to such allocations shall
be made by the Trustees in any manner that reasonably reflects the purpose and
intention of these procedures.
(b) Each Holder will report its share of Trust income and loss for
federal income tax purposes in accordance with the allocations effected pursuant
to Section 5.2 hereof.
5.5. Timing of Tax Allocations to Book and Tax Capital Accounts.
Allocation of Taxable Income, Tax-Exempt Income and Tax Loss pursuant to Section
5.2 hereof for any Fiscal Year, unless specified above to the contrary, shall be
made only after corresponding adjustments have been made to the Book Capital
Accounts of the Holders for the Fiscal Year as provided pursuant to Section 5.1
hereof.
5.6. Redemptions During the Fiscal Year. If a Redemption occurs prior
to the end of a Fiscal Year, the Trust will treat the Fiscal Year as ended for
the purposes of computing the redeeming Holder's distributive share of Trust
items and allocations of all items to such Holder will be made as though each
Holder were receiving its allocable share of Trust items at such time. All items
so allocated to the redeeming Holder will be subtracted from the items to be
allocated among the other non-redeeming Holders at the actual end of the Fiscal
Year. All items allocated among the redeeming and non-redeeming Holders will be
made subject to the rules of Code Sections 702, 704, 706 and 708 and the
Treasury Regulations promulgated thereunder.
ARTICLE VI
Withdrawals
6.1. Partial Xxxxxxxxxxx.Xx any time any Holder shall be entitled to
request a withdrawal of such portion of the Interest held by such Holder as such
Holder shall request.
6.2. Redemptions. At any time a Holder shall be entitled to request a
Redemption of all of its Interest. A Holder's Interest may be redeemed at any
time during the Fiscal Year as provided in Section 6.3 hereof by a cash
distribution or, at the option of a Holder, by a distribution of a proportionate
amount except for fractional shares of each Trust asset at the option of the
Trust. However, the Holder may be redeemed by a distribution of a proportionate
amount of the Trust's assets only at the end of a Fiscal Year. However, if the
Holder has contributed any property to the Trust other than cash, if such
property remains in the Trust at the time the Holder requests withdrawal, then
such property will be sold by the Trust prior to the time at which the Holder
withdraws from the Trust.
6.3. Distribution in Kind. If a withdrawing Holder receives a
distribution in kind of its proportionate part of Trust property, then
unrealized income, gain, loss or deduction attributable to such property shall
be allocated among the Holders as if there had been a disposition of the
property on the date of distribution in compliance with the requirements of
Treasury Regulations Section 1.704-1(b)(2)(iv)(e).
ARTICLE VII
Liquidation
7.1. Liquidation Procedure. Subject to Section 7.4 hereof, upon dissolution
of the Trust, the Trustees shall liquidate the assets of the Trust, apply and
distribute the proceeds thereof as follows:
(a) first to the payment of all debts and obligations of the Trust to
third parties, including without limitation the retirement of outstanding debt,
including any debt owed to Holders or their affiliates, and the expenses of
liquidation, and to the setting up of any Reserves for contingencies which may
be necessary; and
(b) then in accordance with the Holders' positive Book Capital Account
balances after adjusting Book Capital Accounts for allocations provided in
Article V hereof and in accordance with the requirements described in Treasury
Regulations Section 1.704-1(b)(2) (ii)(b)(2).
7.2. Alternative Liquidation Procedure. Notwithstanding the foregoing,
if the Trustees shall determine that an immediate sale of part or all of the
Trust assets would cause undue loss to the Holders, the Trustees, in order to
avoid such loss, may, after having given notification to all the Holders, to the
extent not then prohibited by the law of any jurisdiction in which the Trust is
then formed or qualified and applicable in the circumstances, either defer
liquidation of and withhold from distribution for a reasonable time any assets
of the Trust except those necessary to satisfy the Trust's debts and obligations
or distribute the Trust's assets to the Holders in liquidation.
7.3. Cash Distributions Upon Liquidation. Except as provided in Section 7.2
hereof, amounts distributed in liquidation of the Trust shall be paid solely in
cash.
7.4. Treatment of Negative Book Capital Account Balance. If a Holder has a
negative balance in its Book Capital Account following the liquidation of its
Interest, as determined after taking into account all capital account
adjustments for the Fiscal Year during which the liquidation occurs, then such
Holder shall restore the amount of such negative balance to the Trust by the
later of the end of the Fiscal Year or 90 days after the date of such
liquidation so as to comply with the requirements of Treasury Regulations
Section 1.704-1(b)(2)(ii)(b)(3). Such amount shall, upon liquidation, be paid to
creditors of the Trust or distributed to other Holders in accordance with their
positive Book Capital Account balances.
