AMENDMENT NO. 4
to the
CUSTODIAN AGREEMENT
This is an amendment the Custodian Agreement dated as of February 15, 1999,
between E*TRADE Funds ("Fund") and Investors Bank & Trust Company ("IBT"), as
amended by the Amendment Agreement dated as December 26, 2000, among the Fund,
E*TRADE Asset Management, Inc. ("ETAM"or the "Adviser") and IBT and such other
previous amendments as have been adopted from to time.
WHEREAS, the Fund has entered into a Third Amended and Restated
Administrative Services Agreement with ETAM pursuant to which each series of the
Fund, rather than ETAM, is responsible for its own expenses including
compensation paid to all third-party service providers such as IBT;
WHEREAS, the Board of Trustees of the Trust ("Board") has approved the
liquidation of the E*TRADE Extended Market Index Fund ("Extended Market Fund")
and the E*TRADE Global Titans Index Fund ("Global Titans Fund") effective upon
the liquidation date as indicated in the Plan of Liquidation adopted by the
Board ("Liquidation Date");
WHEREAS, the Board has approved the merger of the E*TRADE E-Commerce Index
Fund ("E-Commerce Fund") with and into the E*TRADE Technology Index Fund
("Technology Fund"), subject to the approval of shareholders, and such
reorganization is expected to take place prior to December 31, 2001;
WHEREAS, the Board has approved the conversion of the E*TRADE Bond Index
Fund ("Bond Fund") to an actively managed fund, subject to the approval of
shareholders, and such conversion is expected to take place prior to December
31, 2001;
WHEREAS, the Fund, ETAM and IBT desire to amend the Custodian Agreement as
set forth below; and
WHEREAS, the Fund, ETAM and IBT agree that ETAM shall be removed as a party
to the Custodian Agreement and the Fund, on behalf of each series of the Fund,
shall be responsible for the duties set forth in the Custodian Agreement as
amended hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Amendments effective upon the Liquidation Date:
(a) The Custodian Agreement is hereby amended by deleting the lead-in
paragraph thereof in its entirety and inserting in lieu thereof
the following:
"Agreement made as of this 15th day of February, 1999, by and between
E*TRADE FUNDS, a business trust organized under the laws of the State
of Delaware ("Fund"), on behalf of each series of the Fund shown in
Appendix A, and Investors Bank & Trust Company, a Massachusetts trust
company ("Investors Bank")."
(b) Paragraph 1 of the Custodian Agreement is hereby amended by
deleting such Paragraph 1 in its entirety and inserting in lieu
thereof the following:
"Bank Appointed as Custodian. The Fund hereby appoints the Bank
as custodian of the Fund's 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. For the services rendered pursuant to this Agreement,
the Fund agrees to pay to the Bank the fees set forth in Appendix
B-1 and Appendix B-2 hereto."
(c) Paragraph 16.4 of the Custodian Agreement is hereby amended by
deleting the word "Adviser" therein and inserting in lieu thereof
the word "Fund."
2. Effective upon the Liquidation Date, the Extended Market Fund is
hereby removed from Appendix A and Appendix B-1.
3. Effective upon the Liquidation Date, the Global Titans Fund is hereby
removed from Appendix A and Appendix B-2.
4. The E-Commerce Fund is hereby removed from Appendix A and Appendix B-2
effective upon the earlier of either (a) the reorganization of
E-Commerce Fund with and into the Technology Fund, if such
reorganization is approved by shareholders of the E-Commerce Fund; or
(b) if the reorganization is not approved by shareholders, upon the
liquidation of the E-Commerce Fund, which is expected to occur prior
to December 31, 2001.
5. Upon the effective date of the reorganization or the liquidation of
the E-Commerce Fund, which is expected to occur before December 31,
2001, Appendix A is hereby amended and substituted with the attached
Appendix A.
6. Upon the effective date of the conversion of the Bond Fund to an
actively managed fund, if such conversion is approved by shareholders,
the Bond Fund is hereby removed from under the heading "Feeders" in
Appendix A and is hereby inserted under the heading "Stand-Alone" in
Appendix A and the name of the fund in Appendix A is changed to the
"E*TRADE Bond Fund." If the conversion of the Bond Fund to an actively
managed fund is not approved by shareholders, upon the effective date
of the liquidation of the Bond Fund, Appendix A is hereby modified and
amended to remove that fund from Appendix A.
7. The compensation paid to IBT for services provided to the E-Commerce
Fund shall be paid by ETAM until the earlier of either the
reorganization or the liquidation of the E-Commerce Fund as indicated
in paragraph 4 above.
8. The compensation paid to IBT for services provided to the Bond Fund
shall be paid by ETAM until the earlier of either the conversion or
the liquidation of the Bond Fund as indicated in paragraph 6 above.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to
the Custodian Agreement to be executed by their respective officers thereunto
duly authorized as of ___________, 2001.
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By: By:
------------------------ ------------------------------
Name: Name:
Title: Title:
INVESTORS BANK & TRUST COMPANY
By:
-----------------------------
Name:
Title:
APPENDIX A
to the
CUSTODIAN AGREEMENT
Feeders
-------
E*TRADE Bond Index Fund*
E*TRADE International Index Fund
E*TRADE Premier Money Market Fund
E*TRADE Xxxxxxx 2000 Index Fund
E*TRADE S&P 500 Index Fund
Stand-Alone
-----------
E*TRADE Asset Allocation Fund
E*TRADE Financial Sector Index Fund
E*TRADE Technology Index Fund
* The name of this fund will be changed to the "E*TRADE Bond Fund," and the
fund will be removed from the "Feeder" list and be added to the
"Stand-Alone" list, if the conversion of the fund to an actively managed
fund is approved by shareholders.
