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EXHIBIT 99.B8
(2/95)
Custody & Fund Accounting
CUSTODIAN AGREEMENT
Between
GREEN CENTURY FUNDS
And
GREEN CENTURY CAPITAL MANAGEMENT, INC.
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
Page
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1. Bank Appointed Custodian
2. Definitions ...........................................................I
2.1 Authorized Person .....................................................1
2.2 Security ..............................................................1
2.3 Portfolio Security ....................................................1
2.4 Officers' Certificate .................................................2
2.5 Book-Entry System .....................................................2
2.6 Depository ............................................................2
2.7 Proper Instructions ...................................................2
3. Separate Accounts .....................................................2
4. Certification as to Authorized Persons ................................3
5. Custody of Cash .......................................................3
5.1 Purchase of Securities ................................................3
5.2 Redemptions ...........................................................3
5.3 Distributions and Expenses of Trust ...................................4
5.4 Payment in Respect of Securities ......................................4
5.5 Repayment of Loans ....................................................4
5.6 Repayment of Cash .....................................................4
5.7 Foreign Exchange Transactions .........................................4
5.8 Other Authorized Payments .............................................4
5.9 Termination ...........................................................4
6. Securities ............................................................4
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6.1 Segregation and Registration ..........................................4
6.2 Voting and Proxies ....................................................5
6.3 Book-Entry System .....................................................5
6.4 Use of a Depository ...................................................6
6.5 Use of Book-Entry System for Commercial Paper .........................7
6.6 Use of Immobilization Programs ........................................8
6.7 Eurodollar CDs ........................................................8
6.8 Options and Futures Transactions ......................................9
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter ...................................................9
(b) Puts, Calls, and Futures Traded
on Commodities Exchanges .....................................................9
Page
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6.9 Segregated Account ....................................................9
6.10 Interest Bearing Call or Time Deposits ................................11
6.11 Transfer of Securities ................................................11
7. Redemptions ...........................................................13
8. Merger, Dissolution, etc. of Trust ....................................13
9. Actions of Bank Without Prior Authorization ...........................13
10. Collections and Defaults ..............................................14
11. Maintenance of Records ................................................14
12. Fund Valuation ........................................................14
13. Concerning the Bank ...................................................15
13.1 Performance of Duties;
Standard of Care .............................................................15
13.2 Agents and Subcustodians with Respect to Property
of the Trust Held in the United States ................................16
13.3 Duties of the Bank with Respect to Property
Held Outside of the United States .....................................16
13.4 Insurance .............................................................19
13.5 Fees and Expenses of Bank .............................................20
13.6 Advances by Bank ......................................................20
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14. Termination ...........................................................20
15. Confidentiality .......................................................21
16. Notices ...............................................................21
17. Amendments ............................................................22
18. Parties ...............................................................22
19. Governing Law .........................................................22
20. Counterparts ..........................................................22
21. Limitation of Liability of the Trustees and Shareholders...............22
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CUSTODIAN AGREEMENT
AGREEMENT made as of this 11th day of September, 1995, among Green Century
Funds, a Massachusetts business trust (the "Trust") which consists of separate
series of shares set forth on Exhibit A attached hereto, Green Century Capital
Management, Inc., a Massachusetts corporation ("GCCM"), and INVESTORS BANK &
TRUST COMPANY, a Massachusetts trust company (the "Bank").
The Trust, an open-end management investment company, desires to place and
maintain all of its portfolio securities and cash in the custody of the Bank.
The Bank has at least the minimum qualifications required by Section 17(f)(1) of
the Investment Company Act of 1940 (the "1940 Act") to act as custodian of the
portfolio securities and cash of the Trust, and has indicated its willingness to
so act, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Trust hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of the Trust
by appropriate resolution of its Board of Trustees ("the Board"), and set forth
in a certificate as required by Section 4 hereof
2.2 Security. The term security as used herein will have the same meaning
as when such term is used in the Securities Act of 1933, as amended, including,
without limitation, any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any profit sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof, or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing, and
futures, forward contracts and options thereon.
2.3 Portfolio Security. Portfolio Security will mean any Security owned by
the Trust.
2.4 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Trust.
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2.5 Book-Entry System. Book-Entry System shall mean the Federal
Reserve Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.6 Depository. Depository shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.
2.7 Proper Instructions. Proper Instructions shall mean (i) instructions
(which may be continuing instructions) regarding the purchase or sale of
Portfolio Securities, and payments and deliveries in connection therewith, given
by an Authorized Person as shall have been designated in an Officers'
Certificate, such instructions to be given in such form and manner as the Bank
and the Trust shall agree upon from time to time, and (ii) instructions (which
may be continuing instructions) regarding other matters signed or initialed by
such one or more persons from time to time designated in an Officers'
Certificate as having been authorized by the Board. Oral instructions will be
considered Proper Instructions if the Bank 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 promptly
confirmed in writing. The Bank shall act upon and comply with any subsequent
Proper Instruction which modifies a prior instruction and the sole obligation of
the Bank with respect to any follow-up or confirmatory instruction shall be to
make reasonable efforts to detect any discrepancy between the original
instruction and such confirmation and to report such discrepancy to the Trust.
The Trust shall be responsible, at the expense of GCCM, for taking any action,
including any reprocessing, necessary to correct any such discrepancy or error,
and to the extent such action requires the Bank to act the Trust shall give the
Bank specific Proper Instructions as to the action required. Upon receipt of an
Officers' Certificate as to the authorization by the Board accompanied by a
detailed description of procedures approved by the Trust, Proper Instructions
may include communication effected directly between electro-mechanical or
electronic devices provided that the Board and the Bank are satisfied that such
procedures afford adequate safeguards for the Trust's assets.
3. Separate Accounts. If the Trust has more than one series or portfolio,
the Bank will segregate the assets of each series or portfolio to which this
Agreement relates into a separate account for each such series or portfolio
containing the assets of such series or portfolio (and all investment earnings
thereon). Unless the context otherwise requires, any reference in this Agreement
to any actions to be taken by the Trust shall be deemed to refer to the Trust
acting on behalf of one or more of its series, any reference in this Agreement
to any assets of the Trust, including, without limitation, any Portfolio
Securities and cash and earnings thereon, shall be deemed to refer only to
assets of the applicable series, any duty or obligation of the Bank hereunder to
the Trust shall be deemed to refer to duties and obligations with respect to the
individual series, and any obligation or liability of the Trust hereunder shall
be binding only with respect to the individual series, and shall be discharged
only out of the assets of such series.
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4. Certification as to Authorized Persons. The Secretary or Assistant
Secretary of the Trust will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
(i) the names and signatures of the Authorized Persons and (ii) the names of the
Members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or Assistant
Secretary of the Trust, will sign a new or amended certification setting forth
the change and the new, additional or omitted names or signatures. The Bank will
be entitled to rely and act upon any Officers' Certificate given to it by the
Trust which has been signed by Authorized Persons named in the most recent
certification.
5. Custody of Cash. As custodian for the Trust, the Bank will open and
maintain a separate account or accounts in the name of the Trust or in the name
of the Bark as Custodian of the Trust, and will deposit to the account of the
Trust all of the cash of the Trust, except for cash held by a subcustodian
appointed pursuant to Section 13.2 or 13.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding shares of common stock of the
Trust, notification from the Trust's transfer agent as provided in Section 7,
requesting such payment, designating the payee or the account or accounts to
which the Bank will release funds for deposit, and stating that it is for a
purpose permitted under the terms of this Section 5, specifying the applicable
subsection, the Bank will make payments of cash held for the accounts of the
Trust, insofar as funds are available for that purpose, only as permitted in
subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for the Trust,
against contemporaneous receipt of such securities by the Bank or, against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, registered in the name of the Trust or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction report in the case of Book Entry Paper) of
purchase of the securities received by the Bank before such payment is made, as
confirmed in the Proper Instructions received by the Bank before such payment is
made.
5.2 Redemptions. In such amount as may be necessary for the repurchase or
redemption of common shares of the Trust offered for repurchase or redemption in
accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Trust. For the payment on the account of
the Trust of dividends or other distributions to shareholders as may from time
to time be authorized by the Board, interest, taxes, brokerage costs and other
capital expenses, expenses of the non-interested Trustees (including counsel
fees), other extraordinary expenses, investment advisory fees, administrative
fees and distribution fees.
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5.4 Payment in Respect of Securities. For payments in connection with the
conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Trust held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Trust, but, in
the case of final payment, only upon redelivery to the Bank of any Portfolio
Securities pledged or hypothecated therefor and upon surrender of documents
evidencing the loan.
5.6 Repayment of Cash. To repay the cash delivered to the Trust for the
purpose of collateralizing the obligation to return to the Trust certificates
borrowed from the Trust representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions. For payments in connection with foreign
exchange contracts or options to purchase and sell foreign currencies for spot
and future delivery which may be entered into by the Bank on behalf of the Trust
upon the receipt of Proper Instructions, such Proper Instructions to specify the
currency broker or banking institution (which may be the Bank, or any other
subcustodian or agent hereunder, acting as principal) with which the contract or
option is made, and the Bank shall have no duty with respect to the selection of
such currency brokers or banking institutions with which the Trust deals or for
their failure to comply with the terms of any contract or option.
5.8 Other Authorized Payments. For other authorized transactions of the
Trust, or other obligations of the Trust incurred for proper Trust purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Trust, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper corporate purpose.
5.9 Termination: upon the termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 14 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided herein, and
except for securities to be delivered to any subcustodian appointed pursuant to
Section 13.2 hereof, the Bank as custodian, will receive and hold pursuant to
the provisions hereof, in a separate account or accounts and physically
segregated at all times from those of other persons, any and all Portfolio
Securities which may now or hereafter be delivered to it by or for the account
of the Trust. All such Portfolio Securities will be held or disposed of by the
Bank for, and subject at all times to, the instructions of the Trust pursuant to
the terms of this Agreement. Subject to the specific provisions herein relating
to Portfolio Securities that are not physically held by the Bank, the Bank will
register all Portfolio Securities (unless otherwise directed by Proper
Instructions or an Officers' Certificate), in the name of a registered nominee
of the Bank as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued
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thereunder, and will execute and deliver all such certificates in connection
therewith as may be required by such laws or regulations or under the laws of
any state.
The Trust will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Trust.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank will
vote any of the Portfolio Securities held hereunder, except in accordance with
Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Trust all notices,
proxies and proxy soliciting materials with respect to such Securities, such
proxies to be executed by the registered holder of such Securities (if
registered otherwise than in the name of the Trust), but without indicating the
manner in which such proxies are to be voted.
6.3 Book-Entry System. Provided (i) the Bank has received a certified copy
of a resolution of the Board specifically approving deposits of Trust assets in
the Book-Entry System, and (ii) for any subsequent changes to such arrangements
following such approval, the Board has reviewed and approved the arrangement and
has not delivered an Officer's Certificate to the Bank indicating that the Board
has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to the
Trust's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry Portfolio Securities which are included with
other securities deposited in the Account and shall at all times during the
regular business hours of the Bank (or such agent) be open for inspection by
duly authorized officers, employees or agents of the Trust. Where securities are
transferred to the Trust's account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Trust a quantity of securities in
fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve
Bank;
(c) The Bank (or its agent) shall pay for Portfolio Securities
purchased for the account of the Trust or shall pay cash collateral against the
return of Portfolio Securities loaned by the Trust upon (i) receipt of advice
from the Book-Entry System that such Portfolio Securities have been transferred
to the Account, and (ii) the making of an entry on the records of the Bank (or
its agent) to reflect such payment and transfer for the account of the Trust.
The Bank (or its agent) shall transfer securities sold or loaned for the account
of the Trust upon
(i) receipt of advice from the Book-Entry System that payment for
securities sold or payment of the initial cash collateral against the delivery
of Portfolio Securities loaned by the Trust has been transferred to the Account;
and
(ii) the making of an entry on the records of the Bank (or its
agent) to reflect such transfer and payment for the account of the Trust. Copies
of all advices from the Book-Entry
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System of transfers of securities for the account of the Trust shall identify
the Trust, be maintained for the Trust by the Bank and shall be provided to the
Trust at its request. The Bank shall send the Trust a confirmation, as defined
by Rule l7f-4 under the 1940 Act, of any transfers to or from the account of the
Trust;
(d) The Bank will promptly provide the Trust with any report obtained
by the Bank or its agent on the Book-Entry Systems accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Book-Entry System; and
(e) The Bank shall be liable to the Trust for any loss or damage to the
Trust resulting from use of the Book-Entry System by reason of any negligence,
willful misfeasance or bad faith of the Bank or any of its agents or of any of
its or their employees or from any reckless disregard by the Bank or any such
agent of its duty to use its best efforts to enforce such rights as it may have
against the Book-Entry System; at the election of the Trust, it shall be
entitled to be substituted for the Bank in any claim against the Book-Entry
System or any other person which the Bank or its agent 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 loss or damage.
6.4 Use of a Depository. Provided (i) the Bank has received a certified
copy of a resolution of the Board specifically approving deposits in DTC or
other such Depository and (ii) for any subsequent changes to such arrangements
following such approval, the Board has reviewed and approved the arrangement and
has not delivered an Officer's Certificate to the Bank indicating that the Board
has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange, release,
lend, deliver and otherwise deal with Portfolio Securities including stock
dividends, rights and other items of like nature, and to receive and remit to
the Bank on behalf of the Trust all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof,
(b) Registration of Portfolio Securities may be made in the name of any
nominee or nominees used by such Depository;
(c) Payment for Portfolio Securities purchased and sold may be made
through the clearing medium employed by such Depository for transactions of
participants acting through it. Upon any purchase of Portfolio Securities,
payment will be made only upon delivery of the Portfolio Securities to or for
the account of the Trust and the Trust shall pay cash collateral against the
return of Portfolio Securities loaned by the Trust only upon delivery of the
Portfolio Securities to or for the account of the Trust; and upon any sale of
Portfolio Securities, delivery of the Portfolio Securities will be made only
against payment therefor or, in the event Portfolio Securities are loaned,
delivery of Portfolio Securities will be made only against receipt of the
initial cash collateral to or for the account of the Trust; and
(d) The Bank shall be liable to the Trust for any loss or damage to the
Trust resulting from use of a Depository by reason of any negligence, willful
misfeasance or bad faith of the Bank or its employees or from any reckless
disregard by the Bank of its duty to use its best efforts to enforce such rights
as it may have against a Depository. In this connection, the Bank shall use its
best efforts to ensure that:
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(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to the
Bank upon its request;
(ii) Any proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded immediately to
the Bank for prompt transmittal to the Trust;
(iii) Such Depository immediately forwards to the Bank confirmation
of any purchase or sale of Portfolio Securities and of the appropriate book
entry made by such Depository to the Trust's account;
(iv) Such Depository prepares and delivers to the Bank such records
with respect to the performance of the Bank's obligations and duties hereunder
as may be necessary for the Trust to comply with the recordkeeping requirements
of Section 3 1 (a) of the 1940 Act and Rule 3 1 (a) thereunder; and
(v) Such Depository delivers to the Bank and the Trust all internal
accounting control reports, whether or not audited by an independent public
accountant, as well as such other reports as the Trust may reasonably request in
order to verify the Portfolio Securities held by such Depository.
6.5 Use of Book-Entry System for Commercial Paper. Provided (i) the Bank
has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that the Trust has purchased such Issuer's Book-entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Trust,
commercial paper issued by issuers with whom the Bank has entered into a
book-entry agreement (the "Issuers"). In maintaining its Book-entry Paper
System, the Bank agrees that:
(a) the Bank will maintain all Book-Entry Paper held by the Trust in an
account of the Bank that includes only assets held by it for customers;
(b) the records of the Bank with respect to the Trust's purchase of
Book-Entry Paper through the Bank will identify, by book-entry, Commercial Paper
belonging to the Trust which is included in the Book-entry Paper System and
shall at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Trust;
(c) the Bank shall pay for Book-Entry Paper purchased for the account
of the Trust upon contemporaneous (i) receipt of advice from the Issuer that
such sale of Book-Entry Paper has been effected, and (ii) the making of an entry
on the records of the Bank to reflect such payment and transfer for the account
of the Trust;
(d) the Bank shall cancel such Book-Entry Paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been
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transferred to the Trust, and (ii) the making of an entry on the records of the
Bank to reflect such payment for the account of the Trust;
(e) the Bank shall transmit to the Trust a transaction journal
confirming each transaction in Book-Entry Paper for the account of the Trust on
the next business day following the transaction; and
(f) the Bank will send to the Trust such reports on its system of
internal accounting control with respect to the Book-Entry Paper System as the
Trust may reasonably request from time to time.
6.6 Use of Immobilization Programs. Provided (i) the Bank has
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated
by a bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and
(ii) for each year following such approval the Board has reviewed and approved
the arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such bank acting as a subcustodian hereunder.
6.7 Eurodollar CDs. Any Portfolio Securities which are Eurodollar
CDs may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a "European Branch"),
provided that such Securities are identified on the books of the Bank as
belonging to the Trust and that the books of the Bank identify the European
Branch holding such Securities. Notwithstanding any other provision of this
Agreement to the contrary, except as stated in the first sentence of this
subsection 6.7, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to the Trust, and shall have no liability to the Trust
or its shareholders with respect to the actions, inactions, whether negligent
or otherwise of such European Branch in connection with such Eurodollar CDs,
except for any loss or damage to the Trust resulting from the Bank's own
negligence, willful misfeasance or bad faith in the performance of its duties
hereunder.
6.8 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
1. The Bank shall take action as to put options ("puts") and call
options ("calls") purchased or sold (written) by the Trust regarding escrow or
other arrangements (i) in accordance with the provisions of any agreement
entered into upon receipt of Proper Instructions between the Bank, any
broker-dealer registered under the Exchange Act and a member of the National
Association of Securities Dealers, Inc. (the "NASD"), and, if necessary, the
Trust relating to the compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange, or of any
similar organization or organizations.
2. Unless another agreement requires it to do so, the Bank shall be
under no duty or obligation to see that the Trust has deposited or is
maintaining adequate margin, if required, with any broker in connection with any
option, nor shall the Bank be under duty or obligation to present such option to
the broker for exercise unless it receives Proper Instructions from the
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Trust. The Bank shall have no responsibility for the legality of any put or call
purchased or sold on behalf of the Trust, the propriety of any such purchase or
sale, or the adequacy of any collateral delivered to a broker in connection with
an option or deposited to or withdrawn from a Segregated Account (as defined in
subsection 6.9 below). The Bank specifically, but not by way of limitation,
shall not be under any duty or obligation to: (i) periodically check or notify
the Trust that the amount of such collateral held by a broker or held in a
Segregated Account is sufficient to protect such broker of the Trust against any
loss; (ii) effect the return of any collateral delivered to a broker; or (iii)
advise the Trust that any option it holds, has or is about to expire. Such
duties or obligations shall be the sole responsibility of the Trust.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
1. The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Trust in accordance with the
provisions of any agreement among the Trust, the Bank and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or any Contract
Market, or any similar organization or organizations, regarding account deposits
in connection with transactions by the Trust.
2. The responsibilities and liabilities of the Bank as to futures,
puts and calls traded on commodities exchanges, any Futures Commission Merchant
account and the Segregated Account shall be limited as set forth in subparagraph
(a)(2) of this Section 6.8 as if such subparagraph referred to Futures
Commission Merchants rather than brokers, and Futures and puts and calls thereon
instead of options.
6.9 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Trust.
1. Upon receipt of Proper Instructions cash and/or Portfolio Securities
may be transferred into the Segregated Account or Accounts.
(a) in accordance with the provisions of any agreement among the
Trust, the Bank and a broker-dealer registered under the Exchange Act and a
member of the NASD or any Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered Contract Market, or of
any similar organizations regarding escrow or other arrangements in connection
with transactions by the Trust;
(b) for the purpose of segregating cash or securities in connection
with options purchased or written by the Trust or commodity futures purchased or
written by the Trust;
(c) for the deposit of liquid assets, such as cash, U.S. Government
securities or other high grade debt obligations, having a market value (marked
to market on a daily basis) at all times equal to not less than the aggregate
purchase price due on the settlement dates of all the Trust's then outstanding
forward commitment or "when-issued" agreements relating to the purchase of
Portfolio Securities and all the Trust's then outstanding commitments under
reverse repurchase agreements entered into with broker-dealer firms;
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(d) for the deposit of any Portfolio Securities which the Trust has
agreed to sell on a forward commitment basis, all in accordance with Investment
Company Act Release No. 10666;
(e) 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; or
(f) for other proper corporate purposes, but 2*, in the case of
this clause (f), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the Executive Committee
signed by an officer of the Trust and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such Segregated Account and
declaring such purposes to be proper corporate purposes.
2. Upon receipt of Proper Instructions, cash and/or Portfolio
Securities may be withdrawn from the Segregated Account or Accounts.
(a) in accordance with the provisions of any agreements referenced
in (a) or (b) above;
(b) for sale or delivery to meet the Trust's obligations under
outstanding firm commitment or when-issued agreements for the purchase of
Portfolio Securities and under reverse repurchase agreements;
(c) for exchange for other liquid assets of equal or greater value
deposited in the Segregated Account;
(d) to the extent that the Trust's outstanding forward commitment
or when-issued agreements for the purchase of portfolio securities or reverse
repurchase agreements are sold to other parties or the Trust's obligations
thereunder are met from assets of the Trust other than those in the Segregated
Account; or
(e) for delivery upon settlement of a forward commitment agreement
for the sale of Portfolio Securities.
6.10 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Trust of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated in
such Proper Instructions. The Bank shall include in its records with respect to
the assets of the Trust appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the "Deposit
Bank"), and shall retain such forms of advice or receipt evidencing the
deposit, if any, as may be forwarded to the Bank by the Deposit Bank. Such
deposits shall be deemed Portfolio Securities of the Trust and the
responsibility of the Bank therefore shall be the same as and no greater than
the Bank's responsibility in respect of other Portfolio Securities of the
Trust.
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6.11 Transfer of Securities. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section the Bank will
receive Proper Instructions requesting such transfer, exchange or delivery
stating that it is for a purpose permitted under the terms of this Section
6.11, specifying the applicable subsection, or describing the purpose of the
transaction with sufficient particularity to permit the Bank to ascertain the
applicable subsection, only:
(a) upon sales of Portfolio Securities for the account of the
Trust, against contemporaneous receipt by the Bank of payment therefore in full,
or, against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale of the Portfolio Securities received by the Bank
before such transfer is made, as confirmed in the Proper Instructions received
by the Bank before such transfer is made,
(b) in exchange for or upon conversion into other securities alone
or other securities and cash pursuant to any plan of merger, consolidation,
reorganization, share split-up, change in par value, recapitalization or
readjustment or otherwise, upon exercise of subscription, purchase or sale or
other similar rights represented by such Portfolio Securities, or for the
purpose of tendering shares in the event of a tender offer therefor, provided
however that in the event of an offer of exchange, tender offer, or other
exercise of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender in a
timely manner unless such Proper Instructions are received by the Bank at least
two business days prior to the date required for tender, and unless the Bank
(or its agent or subcustodian hereunder) has actual possession of such Security
at least two business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to their
terms into other securities;
(d) for the purpose of redeeming in kind shares of the Trust upon
authorization from the Trust;
(e) in the case of option contracts owned by the Trust, for
presentation to the endorsing broker;
(f) when such Portfolio Securities are called, redeemed or retired
or otherwise become payable;
(g) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the Trust
by any bank, including the Bank; provided, however, that such Portfolio
Securities will be released only upon payment to the Bank for the account of
the Trust of the moneys borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, and such fact is
made to appear in the Proper Instructions, further Portfolio Securities may be
released for that purpose without any such payment. In the event that any such
pledged Portfolio Securities are held by the Bank, they will be so held for the
account of the lender, and after notice to the Trust from the lender in
15
accordance with the normal procedures of the lender, that an event of
deficiency or default on the loan has occurred, the Bank may deliver such
pledged Portfolio Securities to or for the account of the lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the fair
market value of such security, as set forth in the Proper Instructions received
by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by the Trust to
a bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Trust and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such securities
entered into by the Trust;
(j) for other authorized transactions of the Trust or for other
proper corporate purposes; provided that before making such transfer, the Bank
will also receive a certified copy of resolutions of the Board, signed by an
authorized officer of the Trust (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Trust or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 14 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (e), (f), (g), (h) and (i) securities or cash receivable in exchange
therefor shall be delivered to the Bank.
7. Redemptions. In the case of payment of assets of the Trust held by
the Bank in connection with redemptions and repurchases by the Trust of
outstanding common shares, the Bank will rely on notification by the Trust's
transfer agent of receipt of a request for redemption and certificates, if
issued, in proper form for redemption before such payment is made. Payment
shall be made in accordance with the Articles and By-laws of the Trust, from
assets available for said purpose.
8. Merger, Dissolution, etc. of Trust. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Trust into or the consolidation of the Trust with another investment company
where the Trust is not the surviving entity, the sale by the Trust of all, or
substantially all, of its assets to another investment company, or the
liquidation or dissolution of the Trust and distribution of its assets, the
Bank will deliver the Portfolio Securities held by it under this Agreement and
disburse cash only upon the order of the Trust set forth in an Officers'
Certificate, accompanied by a certified copy of a resolution of the Board
authorizing any of the foregoing transactions. Upon completion of such delivery
and disbursement and the payment of the fees, disbursements and expenses of the
Bank, this Agreement will terminate.
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9. Actions of Bank Without Prior Authorization. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, it will without prior authorization or
instruction of the Trust or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the
name of the Trust all checks, drafts, or other negotiable or transferable
instruments or other orders for the payment of money received by it for the
account of the Trust and hold for the account of the Trust all income,
dividends, interest and other payments or distribution of cash with respect to
the Portfolio Securities held thereunder;
9.2 Present for payment all coupons and other income items held by
it for the account of the Trust which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the Trust;
9.3 Receive and hold for the account of the Trust all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder;
9.4 Execute as agent on behalf of the Trust all necessary
ownership and other certificates and affidavits required by the Internal
Revenue Code or the regulations of the Treasury Department issued thereunder,
or by the laws of any state, now or hereafter in effect, inserting the Trust's
name on such certificates as the owner of the securities covered thereby, to
the extent it may lawfully do so and as may be required to obtain payment in
respect thereof The Bank will execute and deliver such certificates in
connection with Portfolio Securities delivered to it or by it under this
Agreement as may be required under the provisions of the Internal Revenue Code
and any Regulations of the Treasury Department issued thereunder, or under the
laws of any state;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it
upon payment for the account of the Trust; and
9.6 Exchange interim receipts or temporary securities for
definitive securities.
10. Collections and Defaults. The Bank will use all reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Trust notice actually received by it of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities. If Portfolio Securities upon which such
income is payable are in default or payment is refused after due demand or
presentation, the Bank will notify the Trust in writing of any default or
refusal to pay within two business days from the day on which it receives
knowledge of such default or refusal. In addition, the Bank will send the Trust
a written report once each month showing any income on any Portfolio Security
held by it which is more than ten days overdue on the date of such report and
which has not previously been reported.
17
11. Maintenance of Records. The Bank will maintain records with respect to
transactions for which the Bank is responsible pursuant to the terms and
conditions of this Agreement, and in compliance with the applicable rules and
regulations of the 1940 Act and will furnish the Trust daily with a statement
of condition of the Trust. The Bank will furnish to the Trust at the end of
every month, and at the close of each quarter of the Trust's fiscal years, a
list of the Portfolio Securities and the aggregate amount of cash held by it
for the Trust. The books and records of the Bank pertaining to its actions
under this Agreement and reports by the Bank or its independent accountants
concerning its accounting system, procedures for safeguarding securities and
internal accounting controls will be open to inspection and audit at reasonable
times by officers of or auditors employed by the Trust and will be preserved by
the Bank in the manner and in accordance with the applicable rules and
regulations under the 1940 Act.
The Bank shall keep the books of account and render statements or copies
from time to time as reasonably requested by the Treasurer or any executive
officer of the Trust.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Fund Valuation. The Bank shall compute and, unless otherwise directed
by the Board, determine as of the close of business on the New York Stock
Exchange on each day on which said Exchange is open for unrestricted trading
and as of such other hours, if any, as may be authorized by the Board the net
asset value and the public offering price of a share of capital stock of the
Trust, such determination to be made in accordance with the provisions of the
Articles and By-laws of the Trust and Prospectus and Statement of Additional
Information relating to the Trust, as they may from time to time be amended,
and any applicable resolutions of the Board at the time in force and
applicable; and promptly to notify the Trust, the proper exchange and the NASD
or such other persons as the Trust may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) the manner of accrual of the liabilities of the Trust
and in respect of liabilities of the Trust not appearing on its books of
account kept by the Bank, (ii) reserves, if any, authorized by the Board or
that no such reserves have been authorized, (iii) the source of the quotations
to be used in computing the net asset value, (iv) the value to be assigned to
any security for which no price quotations are available, and (v) the method of
computation of the public offering price on the basis of the net asset value of
the shares, and the Bank shall not be responsible for any loss occasioned by
such reliance or for any good faith reliance on any quotations received from a
source pursuant to (iii) above.
13. Concerning the Bank.
13.1 Performance of Duties and Standard of Care.
In performing its duties hereunder and any other duties listed on any
Schedule hereto, if any, the Bank will be entitled to receive and act upon the
advice of independent counsel of its own selection, which may be counsel for
the Trust, and will be without liability for any action taken or thing done or
omitted to be done in accordance with this Agreement in good faith in
conformity with such advice. In the performance of its duties hereunder, the
Bank will be protected and not be liable, and will be indemnified and held
harmless for any action taken or
18
omitted to be taken by it in good faith reliance upon the terms of this
Agreement, any Officers' Certificate, Proper Instructions, resolution of the
Board, telegram, notice, request, certificate or other instrument reasonably
believed by the Bank to be genuine and for any other loss to the Trust except in
the case of its negligence, willful misfeasance or bad faith in the performance
of its duties or reckless disregard of its obligations and duties hereunder.
The Bank will be under no duty or obligation to inquire into and will not be
liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for the Trust, the legality of the purchases thereof or the
propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or for
the Trust or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of the
Trust or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares of the
Trust or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Trust
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; or
(f) any property or moneys of the Trust unless and until received
by it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof
Moreover, the Bank will not be under any duty or obligation to ascertain
whether any Portfolio Securities at any time delivered to or held by it for the
account of the Trust are such as may properly be held by the Trust under the
provisions of its Articles, By-laws, any federal or state statutes or any rule
or regulation of any governmental agency.
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Bank be liable hereunder or to any third party:
(a) for any losses or damages of any kind resulting from acts of
God, earthquakes, fires, floods, storms or other disturbances of nature,
epidemics, strikes, riots, nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, nuclear
fusion, fission or radiation, the interruption, loss or malfunction of
utilities, or transportation, the unavailability of energy sources and other
similar happenings or events except as results from the Bank's own gross
negligence; or
(b) for special, punitive or consequential damages arising from
the provision of services hereunder, even if the Bank has been advised of the
possibility of such damages.
13.2 Agents and Subcustodians with Respect to Property of the Trust
Held in the United States. The Bank may employ agents in the performance of its
duties hereunder and shall be responsible for the acts and omissions of such
agents as if performed by the Bank hereunder.
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Upon receipt of Proper Instructions, the Bank may employ certain
subcustodians, provided that any such subcustodian meets at least the minimum
qualifications required by Section 17(0(1) of the 1940 Act to act as a
custodian of the Trust's assets with respect to property of the Trust held in
the United States. The Bank shall have no liability to the Trust or any other
person by reason of any act or omission of such subcustodian and the Trust
shall indemnify the Bank and hold it harmless from and against any and all
actions, suits and claims, arising directly or indirectly out of the
performance of such subcustodian. Upon request of the Bank, the Trust shall
assume the entire defense of any action, suit, or claim subject to the
foregoing indemnity. GCCM shall pay all fees and expenses of such subcustodian.
13.3 Duties of the Bank with Respect to Property of the Trust Held
Outside of the United States.
(a) Appointment of Foreign Sub-Custodians. The Trust hereby authorizes
and instructs the Bank to employ as sub-custodians for the Trust's Portfolio
Securities and other assets maintained outside the United States the foreign
banking institutions and foreign securities depositories designated on the
Schedule attached hereto (each, a "Selected Foreign Sub-Custodian"). Upon
receipt of Proper Instructions, together with a certified resolution of the
Trust's Board of Trustees, the Bank and the Trust may agree to designate
additional foreign banking institutions and foreign securities depositories to
act as Selected Foreign Sub-Custodians hereunder. Upon receipt of Proper
Instructions, the Trust may instruct the Bank to cease the employment of any one
or more such Selected Foreign Sub-Custodians for maintaining custody of the
Trust's assets, and the Bank shall so cease to employ such sub-custodian as soon
as alternate custodial arrangements have been implemented.
(b) Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Bank and the Trust, assets of the Trust shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as Selected Foreign
Sub-Custodians pursuant to the terms hereof Where possible, such arrangements
shall include entry into agreements containing the provisions set forth in
subparagraph (d) hereof Notwithstanding the foregoing, except as may otherwise
be agreed upon in writing by the Bank and the Trust, the Trust authorizes the
deposit in Euro-clear, the securities clearance and depository facilities
operated by Xxxxxx Guaranty Trust Company of New York in Brussels, Belgium, of
Foreign Portfolio Securities eligible for deposit therein and to utilize such
securities depository in connection with settlements of purchases and sales of
securities and deliveries and returns of securities, until notified to the
contrary pursuant to subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on its books as
belonging to the Trust the Foreign Portfolio Securities held by each Selected
Foreign Sub-Custodian. Each agreement pursuant to which the Bank employs a
foreign banking institution shall require that such institution establish a
custody account for the Bank and hold in that account, Foreign Portfolio
Securities and other assets of the Trust, and, in the event that such
institution deposits Foreign Portfolio Securities in a foreign securities
depository, that it shall identify on its books as belonging to the Bank the
securities so deposited.
(d) Agreements with Foreign Banking Institutions. Each of the
agreements pursuant to which a foreign banking institution holds assets of the
Trust (each, a "Foreign Sub-Custodian
20
Agreement") shall be substantially in the form previously made available to the
Trust and shall provide that: (a) the Trust's assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of the
foreign banking institution or its creditors or agent, except a claim of payment
for their safe custody or administration (including, without limitation, any
fees or taxes payable upon transfers or reregistration of securities); (b)
beneficial ownership of the Trust's assets will be freely transferable without
the payment of money or value other than for custody or administration
(including, without limitation, any fees or taxes payable upon transfers or
reregistration of securities); (c) adequate records will be maintained
identifying the assets as belonging to Bank; (d) officers of or auditors
employed by, or other representatives of the Bank, including to the extent
permitted under applicable law, the independent public accountants for the
Trust, will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Bank; and (e)
assets of the Trust held by the Selected Foreign Sub-Custodian will be subject
only to the instructions of the Bank or its agents.
(e) Access of Independent Accountants of the Trust. Upon request
of the Trust, the Bank will use its best efforts to arrange for the independent
accountants of the Trust to be afforded access to the books and records of any
foreign banking institution employed as a Selected Foreign Sub-Custodian
insofar as such books and records relate to the performance of such foreign
banking institution under its Foreign Sub-Custodian Agreement.
(f) Reports by Ban. The Bank will supply to the Trust from time
to time, as mutually agreed upon, statements in respect of the securities and
other assets of the Trust held by Selected Foreign Sub-Custodians, including
but not limited to an identification of entities having possession of the
Foreign Portfolio Securities and other assets of the Trust.
(g) Transactions in Foreign Custody Account. Transactions with
respect to the assets of the Trust held by a Selected Foreign Sub-Custodian
shall be effected pursuant to Proper Instructions from the Trust to the Bank
and shall be effected in accordance with the applicable Foreign Sub-Custodian
Agreement. If at any time any Foreign Portfolio Securities shall be registered
in the name of the nominee of the Selected Foreign Sub-Custodian, the Trust
agrees to hold any such nominee harmless from any liability by reason of the
registration of such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for Foreign Portfolio Securities received for the
account of the Trust and delivery of Foreign Portfolio Securities maintained
for the account of the Trust may be effected in accordance with the customary
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser thereof
or to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities
from such purchaser or dealer.
In connection with any action to be taken with respect to the
Foreign Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights, exchange
rights, conversion rights or tender rights, or any other action in connection
with any other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Trust
such information in connection therewith as is made available to the Bank by
the Foreign
21
Sub-Custodian, and shall promptly forward to the applicable Foreign
Sub-Custodian any instructions, forms or certifications with respect to such
Rights, and any instructions relating to the actions to be taken in connection
therewith, as the Bank shall receive from the Trust pursuant to Proper
Instructions, Notwithstanding the foregoing, the Bank shall have no further duty
or obligation with respect to such Rights, including, without limitation, the
determination of whether the Trust is entitled to participate in such Rights
under applicable U.S. and foreign laws, or the determination of whether any
action proposed to be taken with respect to such Rights by the Trust or by the
applicable Foreign Sub-Custodian will comply with all applicable terms and
conditions of any such Rights or any applicable laws or regulations, or market
practices within the market in which such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-Custodians. Each Foreign
Sub-Custodian Agreement with a foreign banking institution shall require the
institution to exercise reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Bank and each Trust from and against certain
losses, damages, costs, expenses, liabilities or claims arising out of or in
connection with the institution's performance of such obligations, all as set
forth in the applicable Foreign Sub-Custodian Agreement. The Trust acknowledges
that the Bank, as a participant in Euro-clear, is subject to the Terms and
Conditions Governing the Euro-Clear System, a copy of which has been made
available to the Trust. The Trust acknowledges that pursuant to such Terms and
Conditions, Xxxxxx Guaranty Brussels shall have the sole right to exercise or
assert any and all rights or claims in respect of actions or omissions of, or
the bankruptcy or insolvency of, any other depository, clearance system or
custodian utilized by Euro-clear in connection with the Trust's securities and
other assets.
(i) Liability of Bank. The Bank shall have no more or less
responsibility or liability on account of the acts or omissions of any Selected
Foreign Sub-Custodian employed hereunder than any such Selected Foreign
Sub-Custodian has to the Bank and, without limiting the foregoing, the Bank
shall not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or acts of
war or terrorism, political risk (including, but not limited to, exchange
control restrictions, confiscation, insurrection, civil strife or armed
hostilities) other losses due to Acts of God, nuclear incident or any loss where
the Selected Foreign Sub-Custodian has otherwise exercised reasonable care.
(j) Monitoring Responsibilities. The Bank shall furnish annually to the
Trust, information concerning the Selected Foreign Sub-Custodians employed
hereunder for use by the Trust in evaluating such Selected Foreign
Sub-Custodians to ensure compliance with the requirements of Rule 17f-5 of the
Act. In addition, the Bank will promptly inform the Trust in the event that the
Bank is notified by a Selected Foreign Sub-Custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline below $200
million (U.S. dollars or the equivalent thereof or that its shareholders' equity
has declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles) or any other capital adequacy
test applicable to it by exemptive order, or if the Bank has actual knowledge of
any material loss of the assets of the Trust held by a Foreign Sub-Custodian.
(k) Tax Law. The Bank shall have no responsibility or liability for any
obligations now or hereafter imposed on the Trust or the Bank as custodian of
the Trust by the tax laws of any jurisdiction, and it shall be the
responsibility of the Trust to notify the Bank of the obligations imposed on the
Trust or the Bank as the custodian of the Trust by the tax law of any
22
non-U.S. jurisdiction, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting. The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Trust with respect to any claim
for exemption or refund under the tax law of jurisdictions for which the Trust
has provided such information.
13.4 Insurance. The Bank shall use the same care with respect to the
safekeeping of Portfolio Securities and cash of the Trust held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Trust.
13.5. Fees and Expenses of Bank. The Trust and/or GCCM will pay or
reimburse the Bank from time to time for any transfer taxes payable upon
transfer of Portfolio Securities made hereunder, and for all necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement (including any duties listed on any Schedule
hereto, if any) including any indemnities for any loss, liabilities or expense
to the Bank as provided above. Charges to be paid by the Trust are interest,
taxes, brokerage costs and other capital expenses, expenses of the
non-interested trustees (including counsel fees) and any extraordinary expenses.
For the services rendered by the Bank hereunder, GCCMM11 pay to the Bank such
compensation or fees at such rate and at such times as shall be agreed upon in
writing by the parties from time to time. The Bank will also be entitled to
reimbursement by GCCM for all reasonable out-of-pocket expenses incurred in
conjunction with termination of this Agreement by the Trust.
13.6 Advances by Bank. The Bank may, in its sole discretion, advance
funds on behalf of the Trust to make any payment permitted by this Agreement
upon receipt of any proper authorization required by this Agreement for such
payments by the Trust. Should such a payment or payments, with advanced funds,
result in an overdraft (due to insufficiencies of the Trust's account with the
Bank, or for any other reason) this Agreement deems any such overdraft or
related indebtedness, a loan made by the Bank to the Trust payable on demand and
bearing interest at the current rate charged by the Bank for such loans unless
the Trust shall provide the Bank with agreed upon compensating balances. The
Trust agrees that the Bank shall have a continuing lien and security interest to
the extent of any overdraft or indebtedness, in and to any property at any time
held by it for the Trust's benefit or in which the Trust has an interest and
which is then in the Bank's possession or control (or in the possession or
control of any third party acting on the Bank's behalf). The Trust authorizes
the Bank, in its sole discretion, at any time to charge any overdraft or
indebtedness, together with interest due thereon against any balance of account
standing to the credit of the Trust on the Bank's books,
14. Termination.
14.1 This Agreement may be terminated at any time without penalty upon
ninety days written notice delivered by either party to the other by means of
registered mail, and upon the expiration of such ninety days this Agreement will
terminate; provided, however, that the effective date of such termination may be
postponed to a date not more than ninety days from the date of delivery of such
notice (i) by the Bank in order to prepare for the transfer by the Bank of all
of the assets of the Trust held hereunder, and (ii) by the Trust in order to
give the Trust an opportunity to make suitable arrangements for a successor
custodian. At any time after the
23
termination of this Agreement, the Trust will, at its request, have access to
the records of the Bank relating to the performance of its duties as custodian.
14.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duty endorsed and all records
maintained under Section I I to the successor custodian when appointed by the
Trust. The obligation of the Bank to deliver and transfer over the assets of the
Trust held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. If
the Trust does not select a successor custodian within ninety (90) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subsection (14.3), deliver the Portfolio Securities and cash of
the Trust held by the Bank to a bank or trust company of its own selection which
meets the requirements of Section 17(f)(1) of the 1940 Act and has a reported
capital, surplus and undivided profits aggregating not less than $2,000,000, to
be held as the property of the Trust under terms similar to those on which they
were held by the Bank, whereupon such bank or trust company so selected by the
Bank will become the successor custodian of such assets of the Trust with the
same effect as though selected by the Board.
14.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Trust may furnish the Bank with an order of the
Trust advising that a successor custodian cannot be found willing and able to
act upon reasonable and customary terms and that there has been submitted to the
shareholders of the Trust the question of whether the Trust will be liquidated
or will function without a custodian for the assets of the Trust held by the
Bank. In that event the Bank will deliver the Portfolio Securities and cash of
the Trust held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Trust's Secretary and an opinion of
counsel to the Trust in form and content satisfactory to the Bank.
15. Confidential. Both parties hereto agree than any non-public information
obtained hereunder concerning the other party is confidential and may not be
disclosed to any other person without the consent of the other party, except as
may be required by applicable law or at the request of a governmental agency.
The parties further agree that a breach of this provision would irreparably
damage the other party and accordingly agree that each of them is entitled,
without bond or other security, to an injunction or injunctions to prevent
breaches of this provision.
16. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to any party hereto will be sufficiently
given if addressed to such party and mailed or delivered to it at its office at
the address set forth below; namely:
(a) In the case of notices sent to the Trust or G-CCM to:
Green Century Funds/Green Century Capital Management, Inc.
00 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XXX 00000
Attention: Xxxxxxxx Xxxxxx, Treasurer
24
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
or at such other place as such party may from time to time designate in
writing.
17. Amendments. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both par-ties, and in the case of the Trust,
such alteration or amendment will be authorized and approved by its Board.
18. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Trust
without the written consent of the Bank or by the Bank without the written
consent of the Trust, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 14 hereof will not be deemed to
be an assignment within the meaning of this provision.
19. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts.
20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
21. Limitation of Liability of the Trustees and Shareholders. The term
Trust means and refers to the Trustees from time to time serving under the
Declaration of Trust, as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any of the Trustees, Shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Declaration of Trust.
The execution and delivery of this Agreement has been authorized by the Trustees
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by such Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Trust as provided on its Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
Green Century Funds
By_________________
Xxxxxxxx Xxxxxx
Treasurer
25
ATTEST:
Green Century Capital Management, Inc.
By:________________________
Xxxxxxxx Xxxxxx, Treasurer
ATTEST:
Investors Bank & Trust Company
By:________________________
Name:______________________
Title:_____________________
ATTEST:
___________________________
DATE:______________________
26
EXHIBIT A
to
CUSTODIAN AGREEMENT
dated September 11, 1995
among
GREEN CENTURY FUNDS,
GREEN CENTURY CAPITAL MANAGEMENT, INC.
and
INVESTORS BANK & TRUST CONVANY
THE GREEN CENTURY BALANCED FUND
THE GREEN CENTURY EQUITY FUND
Green Century Funds
Fee Schedule
For One Portfolio and One Spoke
DOMESTIC CUSTODY, FUND ACCOUNTING, CALCULATION OF
N.A.V. & TRANSFER AGENCY
A. Domestic Custody. Fund Accounting & Calculation of N.A.V.
-The following basis point fee is based on all domestic assets for which we are
custodian and fund accountant. This amount does not include transactions. See
Standard Transaction Costs (B). These amounts will be calculated monthly as of
the 20th of the month.
Annual Fee
First $150mm in assets 7.0 Basis Points
Assets in excess of $150mm 4.0 Basis Points
There will be a per fund, monthly minimum of $2,500 for the Green Century
Funds.
There will be a yearly fee of $9,000 for spoke accounting.
B. Transaction Costs
- DTC/Fed Book Entry* $12
- Physical Securities 35
- Options and Futures 18
- GNMA Securities 40
- Principal Paydown 5
- Outgoing Wires 10
- Incoming Wires 8
07;27.'95 THU 12:20 FAX INITSTORS B.JLXK
2003
27
TRANSFER AGENCY
A. Transfer Agency Services,
There will be a yearly, minimum per fund fee of S17,750 for the Green Century
Funds:
LU
Account Processing Fee $1500 per account/year
XXX custodian fee $10.00 per account/year
Check redemptions $ 1.50 per draft
Returned checks $25.00 per check
Conversion Cost
Upon determination of files from Fund Plan Services, there will be a one time
conversion fee. This conversion fee cannot be determined until further
information can be received from Fund Plan. The conversion fee will be capped
at S12,000,
YTD STATEMENTS AND TAX REPORTING
1995 statements from Investors Bank will only include information from the date
of conversion. Year-end reporting will only contain information from the date
of conversion to 12/3 1/95.
OUT-OF-POCKET, BACANCE CREDITS
A. Out-of-Packet
These charges consist of
-Pricing & Verification Services -Micro Rental
-Printing, Delivery & Postage -Forms & Supplies
-Telephone -Support Equipment Rental
-Legal Costs -3rd Party Review
-Proxy Tabulation -Ad Hoc reporting
-Checkbooks -800 Number Fees
B. DOMESTIC BALANCE CREDIT
We allow balance credit against fees (excluding out-of-pocket charges) for fund
balances arising out of the custody relationship. The credit is based on
collected balances reduced by balances required to support the activity charges
of the accounts. The monthly earnings allowance is equal to 75% of the 90-day
T-xxxx rate.
* This fee schedule assumes the execution of our standard contractual
agreements.
