CUSTODY AGREEMENT
AGREEMENT dated as of January 1, 1996, between LIBERTY ALL-STAR EQUITY FUND,
a business trust organized under the laws of the Commonwealth of Massachusetts
(the "Fund"), having its principal office and place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, and BOSTON SAFE DEPOSIT AND TRUST
COMPANY (the "Custodian"), a Massachusetts trust company with its principal
place of business at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set forth,
the Fund and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
(a) "Affiliated Person" shall have the meaning of the term within Section
2(a)3 of the 1940 Act.
(b) "Authorized Person" shall be deemed to include the Chairman of the
Board of Trustees, the President, and any Vice President, the Secretary,
the Treasurer or any other person, whether or not any such person is an
officer or employee of the Fund, duly authorized by the Board of Trustees
of the Fund to give Oral Instructions and Written Instructions on behalf of
the Fund and listed in the certification annexed hereto as Appendix A or
such other certification as may be received by the Custodian from time to
time.
(c) "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its successor or
successors and its nominee or nominees.
(d) "Business Day" shall mean any day on which the Fund, the Custodian, the
Book-Entry System and appropriate clearing corporation(s) are open for business.
(e) "Certificate" shall mean any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given to the
Custodian, which is actually received by the Custodian and signed on behalf
of the Fund by any two Authorized Persons or any two officers thereof.
(f) "Trust Agreement" shall mean the Declaration of Trust of the Fund dated
August 20, 1986 as the same has been or may be amended from time to time.
g) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission
under Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the Custodian
is hereby specifically authorized to make deposits. The term "Depository"
shall further mean and include any other person to be named in a
Certificate authorized to act as a depository under the 1940 Act, its
successor or successors and its nominee or nominees.
(h) "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to interest and principal by the
government of the United States or agencies or instrumentalities thereof
("U.S. government securities"), commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations, where
the purchase or sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale, and repurchase and
reverse repurchase agreements with respect to any of the foregoing types of
securities.
(i) "Oral Instructions" shall mean verbal instructions actually received by
the Custodian from a person reasonably believed by the Custodian to be an
Authorized Person.
(j) "Prospectus" shall mean the Fund's current registration statement on
Form N-2 relating to the registration of the Fund under the 1940 Act, as
amended.
(k)"Shares" refers to shares of beneficial interest, no
par value per share, of the Fund.
(l) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodities interests and investments from time to time owned
by the Fund.
(m) "Transfer Agent" shall mean the person which performs the transfer
agent, dividend disbursing agent and shareholder servicing agent functions
for the Fund.
(n) "Written Instructions" shall mean a written communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person by any system, including, without
limitation, electronic transmissions, facsimile and telex.
(o) The "1940 Act" refers to the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian as custodian of
all the Securities and monies at the time owned by or in the possession of
the Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
3. Compensation.
(a) The Fund will compensate the Custodian for its services rendered under
this Agreement in accordance with the fees set forth in the Fee Schedule
annexed hereto as Schedule A and incorporated herein. Such Fee Schedule
does not include out-of-pocket disbursements of the Custodian for which the
Custodian shall be entitled to xxxx separately. Out-of-pocket disbursements
shall include, but shall not be limited to, the items specified in the
Schedule of Out-of-Pocket charges annexed hereto as Schedule B and
incorporated herein, which schedule may be modified by the Custodian upon
not less than thirty days prior written notice to the Fund.
(b) Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule A of this Agreement a revised Fee Schedule, dated
and signed by an Authorized Person or authorized representative of each
party hereto.
(c) The Custodian will xxxx the Fund as soon as practicable after the end
of each calendar month, and said xxxxxxxx will be detailed in accordance
with Schedule A, as amended from time to time. The Fund will promptly pay
to the Custodian the amount of such billing.
4. Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Fund will deliver or cause to be
delivered to the Custodian all Securities and monies owned by it at any
time during the period of this Agreement. The Custodian will not be
responsible for such Securities and monies until actually received by it.
The Fund shall instruct the Custodian from time to time in its sole
discretion, by means of Written Instructions, or, in connection with the
purchase or sale of Money Market Securities, by means of Oral Instructions
confirmed in writing in accordance with Section 11(i) hereof or Written
Instructions, as to the manner in which and in what amounts Securities and
monies are to be deposited on behalf of the Fund in the Book-Entry System
or the Depository; provided, however, that prior to the deposit of
Securities of the Fund in the Book-Entry System or the Depository,
including a deposit in connection with the settlement of a purchase or
sale, the Custodian shall have received a Certificate specifically
approving such deposits by the Custodian in the Book-Entry System or the
Depository. Securities and monies of the Fund deposited in the Book-Entry
System or the Depository will be represented in accounts which include only
assets held by the Custodian for customers, including but not limited to
accounts for which the Custodian acts in a fiduciary or representative
capacity.
(b) Accounts and Disbursements. (i) The Custodian shall establish and
maintain a separate account for the Fund and shall credit to the separate
account all monies received by it for the account of such Fund and shall
disburse the same only:
1. In payment for Securities purchased for the Fund,
as provided in Section 5 hereof;
2. In payment of dividends or distributions with
respect to the Shares, as provided in Section 7
hereof;
3. In payment of original issue or other taxes with
respect to the Shares, as provided in Section 8
hereof;
4. In payment for Shares which have been redeemed by
the Fund, as provided in Section 8 hereof;
5. Pursuant to Written Instructions setting forth the name and address
of the person to whom the payment is to be made, the amount to be paid
and the purpose for which payment is to be made, provided that in the
event of disbursements pursuant to this sub-section 4(b)(5), the Fund
shall indemnify and hold the Custodian harmless from any claims or
losses arising out of such disbursements in reliance on such Written
Instructions which it, in good faith, believes to bereceived from duly
Authorized Persons; or
6. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as provided in
Sections 11(h) and 11(j).
(ii)In addition to the separate account for the Fund as a whole to
be established and maintained pursuant to subsection 4(b)(i) above, the
Custodian shall establish and maintain a separate account ("Portfolio
Manager Account") for each portfolio management firm ("Portfolio
Manager") appointed by the Fund to manage the assets of the Fund, each
Portfolio Manager Account to contain the Securities and monies allocated
to that Portfolio Manager by Liberty Asset Management Company (the "Fund
Manager") from time to time by Written Instructions from the Fund
Manager to the Custodian. All Securities received and delivered and all
payments made and received for the account of the Fundpursuant to or as
a result of Written Instructions received from a Portfolio Manager with
respect to the purchase or sale of such Securities shall be credited to
or debited from that Portfolio Manager's Portfolio Manager Account,
together with all investment earnings on the Securities in such Account
and all other amounts paid on or with respect to, and all Securities
received in exchange for, such Securities. All other receipts and
expenditures by the Fund shall be allocated among the Portfolio Manager
Accounts in accordance with Written Instructions from the Fund Manager.
(c) Confirmation and Statements. Promptly after the close of business on
each day, the Custodian shall furnish the Fund with confirmations and a
summary of all transfers to or from the account of the Fund and to or from
each Portfolio Manager Account during said day. Where securities purchased
by the Fund are in a fungible bulk of securities registered in the name of
the Custodian (or its nominee) or shown on the Custodian's account on the
books of the Depository or the Book-Entry System, the Custodian shall by
book entry or otherwise identify the quantity of those securities belonging
to the Fund. At least monthly, the Custodian shall furnish the Fund with a
detailed statement of the Securities and monies held for the Fund and in
each Portfolio Manager Account under this Agreement.
(d) Registration of Securities and Physical Separation. All Securities held
for the Fund which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the
Custodian in that form; all other Securities held for the Fund may be
registered in the name of the Fund, in the name of the Custodian, in the
name of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the Book-Entry
System or the Depository or their successor or successors, or their nominee
or nominees. The Fund reserves the right to instruct the Custodian as to
the method of registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the Book-Entry System
or the Depository, any Securities which it may hold for the account of the
Fund and which may from time to time be registered in the name of the Fund.
The Custodian shall hold all such Securities specifically allocated to the
Fund which are not held in the Book-Entry System or the Depository in a
separate account for the Fund in the name of the Fund physically segregated
at all times from those of any other person or persons.
(e) Segregated Accounts. Upon receipt of a Written Instruction the
Custodian will establish segregated accounts on behalf of the Fund to hold
liquid or other assets as it shall be directed by a Written Instruction and
shall increase or decrease the assets in such segregated accounts only as
it shall be directed by subsequent Written Instruction.
(f) Collection of Income and Other Matters Affecting Securities. Unless
otherwise instructed to the contrary by a Written Instruction, the
Custodian by itself, or through the use of the Book-Entry System or the
Depository with respect to Securities therein deposited, shall with respect
to all Securities held for the Fund in accordance with this Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon all Securities
which may mature or be called, redeemed, retired or otherwise become
payable. Notwithstanding the foregoing, the Custodian shall have no
responsibility to the Fund for monitoring or ascertaining any call,
redemption or retirement dates with respect to put bonds which are owned by
the Fund and held by the Custodian or its nominees. Nor shall the Custodian
have any responsibility or liability to the Fund for any loss by the Fund
for any missed payments or other defaults resulting therefrom; unless the
Custodian received timely notification from the Fund specifying the time,
place and manner for the presentment of any such put bond owned by the Fund
and held by the Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability to the Fund for the accuracy or
completeness of any notification from a third party the Custodian may
furnish to the Fund with respect to put bonds;
3. Surrender Securities in temporary form for
definitive Securities;
4. Execute any necessary declarations or
certificates of ownership under the Federal income
tax laws or the laws or regulations of any other
taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of the Fund all
rights and similar Securities issued with respect to any Securities held by
the Custodian hereunder for the Fund.
6. Promptly transmit to the Fund to the attention of the Controller at
the address listed in Xxxxxxx 00, Xxxxxxxxx (x) hereof, and to the
Portfolio Manager in whose Portfolio Manager Account such Security is
held, any communication relating to a security held by the Custodian
for the Fund. The Fund shall notify the Custodian in writing to whom at
the Fund any communications relating to a security should be directed.
7. The Custodian shall promptly notify the Fund and the Portfolio Manager
in whose Portfolio Manager Account such Security is held, in writing by
facsimile transmission or in such other manner as such Fund and Custodian
may agree in writing if any amount payable with respect to Securities or
other assets of such Fund is not received by the Custodian when due. In the
event the Custodian has not exercised reasonable care and diligence, it
shall advance to the appropriate Fund any amounts with respect to which
reasonable care and diligence was not exercised.
(g) Delivery of Securities and Evidence of Authority. Upon receipt of a
Written Instruction and not otherwise, except for subparagraphs 5, 6, 7,
and 8 of this section 4(g) which may be effected by Oral or Written
Instructions, the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
1. Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Written Instructions, proxies,
consents, authorizations, and any other instruments whereby the authority
of the Fund as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for the Fund in
exchange for other Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
3. Deliver or cause to be delivered any Securities held for the Fund to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and receive and hold
under the terms of this Agreement in the separate account for the Fund such
certificates of deposit, interim receipts or other instruments or documents
as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the assets
specifically allocated to the separate account of the Fund and take such
other steps as shall be stated in Written Instructions to be for the
purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund;
5. Deliver Securities upon sale of such Securities
for the account of the Fund pursuant to Section 5;
6. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to
such Securities entered into by the Fund;
7. Deliver Securities owned by the Fund to the issuer thereof or its agent
when such Securities are called, redeemed, retired or otherwise become
payable; provided, however, that in any such case the cash or other
consideration is to be delivered to the Custodian. Notwithstanding the
foregoing, the Custodian shall have no responsibility to the Fund for
monitoring or ascertaining any call, redemption or retirement dates with
respect to the put bonds which are owned by the Fund and held by the
Custodian or its nominee. Nor shall the Custodian have any responsibility
or liability to the Fund for any loss by the Fund for any missed payment or
other default resulting therefrom; unless the Custodian received timely
notification from the Fund specifying the time, place and manner for the
presentment of any such put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not be responsible and
assumes no liability to the Fund for the accuracy or completeness of any
notification the Custodian may furnish to the Fund with respect to put
bonds;
8. Deliver Securities for delivery in connection with any loans of
Securities made by the Fund but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the Fund which may be
in the form of cash or U.S. government securities or a letter of credit;
9. Deliver Securities for delivery as security in
connection with any borrowings by the Fund requiring
a pledge of Fund assets, but only against receipt of
amounts borrowed;
10. Deliver Securities upon receipt of Written Instructions from the Fund
for delivery to the Transfer Agent or to the holders of Shares in
connection with distributions in kind, as may be described from time to
time in the Fund's Prospectus, in satisfaction of requests by holders of
Shares for repurchase or redemption;
11. Deliver Securities as collateral in connection with short sales by the
Fund of common stock for which the Fund owns the stock or owns preferred
stocks or debt securities convertible or exchangeable, without payment or
further consideration, into shares of the common stock sold short;
12. Deliver Securities for any purpose expressly
permitted by and in accordance with procedures
described in the Fund's Prospectus; and
13. Deliver Securities for any other proper business purpose, but only upon
receipt of, in addition to Written Instructions, a certified copy of a
resolution of the Board of Directors signed by an Authorized Person and
certified by the Secretary of the Fund, specifying the Securities to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper business purpose, and naming the
person or persons to whom delivery of such Securities shall be made.
(h) Endorsement and Collection of Checks, Etc. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the account of the Fund.
5. Purchase and Sale of Investments of the Fund.
(a) Promptly after each purchase of Securities for the Fund, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities
which are not Money Market Securities, a Written Instruction, and (ii) with
respect to each purchase of Money Market Securities, either a Written
Instruction or Oral Instruction, in either case specifying with respect to
each purchase: (1) the name of the issuer and the title of the Securities;
(2) the number of shares or the principal amount purchased and accrued
interest, if any; (3) the date of purchase and settlement; (4) the purchase
price per unit; (5) the total amount payable upon such purchase; (6) the
name of the person from whom or the broker through whom the purchase was
made, if any; (7) whether or not such purchase is to be settled through the
Book-Entry System or the Depository; and (8) whether the Securities
purchased are to be deposited in the Book-Entry System or the Depository.
The Custodian shall receive the Securities purchased by or for the Fund and
upon receipt of Securities shall pay out of the monies held for the account
of the Fund the total amount payable upon such purchase, provided that the
same conforms to the total amount payable as set forth in such Written or
Oral Instruction.
(b) Promptly after each sale of Securities of the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, a Written Instruction, and (ii) with
respect to each sale of Money Market Securities, either Written Instruction
or Oral Instructions, in either case specifying with respect to such sale:
(1) the name of the issuer and the title of the Securities; (2) the number
of shares or principal amount sold, and accrued interest, if any; (3) the
date of sale; (4) the sale price per unit; (5) the total amount payable to
the Fund upon such sale; (6) the name of the broker through whom or the
person to whom the sale was made; and (7) whether or not such sale is to be
settled through the Book-Entry System or the Depository. The Custodian
shall deliver or cause to be delivered the Securities to the broker or
other person designated by the Fund upon receipt of the total amount
payable to the Fund upon such sale, provided that the same conforms to the
total amount payable to the Fund as set forth in such Written or Oral
Instruction. Subject to the foregoing, the Custodian may accept payment in
such form as shall be satisfactory to it, and may deliver Securities and
arrange for payment in accordance with the customs prevailing among dealers
in Securities.
6. Lending of Securities.
If the Fund is permitted by the terms of the Trust Agreement and as
disclosed in its Prospectus to lend securities, within 24 hours after each
loan of Securities, the Fund shall deliver to the Custodian a Written
Instruction specifying with respect to each such loan: (a) the name of the
issuer and the title of the Securities; (b) the number of shares or the
principal amount loaned; (c) the date of loan and delivery; (d) the total
amount to be delivered to the Custodian, and specifically allocated against
the loan of the Securities, including the amount of cash collateral and the
premium, if any, separately identified; (e) the name of the broker, dealer
or financial institution to which the loan was made; and (f) whether the
Securities loaned are to be delivered through the Book-Entry System or the
Depository.
Promptly after each termination of a loan of Securities, the Fund shall
deliver to the Custodian a Written Instruction specifying with respect to
each such loan termination and return of Securities: (a) the name of the
issuer and the title of the Securities to be returned; (b) the number of
shares or the principal amount to be returned; (c) the date of termination;
(d) the total amount to be delivered by the Custodian (including the cash
collateral for such Securities minus any offsetting credits as described in
said Written Instruction); (e) the name of the broker, dealer or financial
institution from which the Securities will be returned; and (f) whether
such return is to be effected through the Book-Entry System or the
Depository. The Custodian shall receive all Securities returned from the
broker, dealer or financial institution to which such Securities were
loaned and upon receipt thereof shall pay the total amount payable upon
such return of Securities as set forth in the Written Instruction.
Securities returned to the Custodian shall be held as they were prior to
such loan.
7. Payment of Dividends or Distributions.
(a) The Fund shall furnish to the Custodian the vote of the Board of
Trustees of the Fund certified by the Secretary (i) authorizing the
declaration of distributions on a specified periodic basis and authorizing
the Custodian to rely on Oral or Written Instructions specifying the date
of the declaration of such distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be
determined, the amount payable per share to the shareholders of record as
of the record date and the total amount payable to the Transfer Agent on
the payment date, or (ii) setting forth the date of declaration of any
distribution by the Fund, the date of payment thereof, the record date as
of which shareholders entitled to payment shall be determined, the amount
payable per share to the shareholders of record as of the record date and
the total amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral Instructions or
Written Instructions, as the case may be, the Custodian shall pay out the
total amount payable to the Transfer Agent of the Fund.
8. Sale and Redemption of Shares of the Fund.
(a) Whenever the Fund shall sell any Shares, the Fund shall deliver or
cause to be delivered to the Custodian a Written Instruction duly
specifying:
1. The number of Shares sold, trade date, and price;
and
2. The amount of money to be received by the
Custodian for the sale of such Shares.
The Custodian understands and agrees that Written Instructions may be
furnished subsequent to the purchase of Shares and that the information
contained therein will be derived from the sales of Shares as reported to
the Fund by the Transfer Agent.
(b) Upon receipt of money from the Transfer Agent, the Custodian shall
credit such money to the separate account of the Fund.
(c) Upon issuance of any Shares in accordance with the foregoing provisions
of this Section 8, the Custodian shall pay all original issue or other
taxes required to be paid in connection with such issuance upon the receipt
of a Written Instruction specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares are redeemed, the
Fund shall cause the Transfer Agent to promptly furnish to the Custodian
Written Instructions, specifying:
1. The number of Shares redeemed; and
2. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information contained in such
Written Instructions will be derived from the redemption of Shares as
reported to the Fund by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the number
of Shares received by the Transfer Agent for redemption and that such
Shares are valid and in good form for redemption, the Custodian shall make
payment to the Transfer Agent of the total amount specified in a Written
Instruction issued pursuant to paragraph (d) of this Section 8.
(f) Notwithstanding the above provisions regarding the redemption of
Shares, whenever such Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the
Custodian, unless otherwise instructed by a Written Instruction shall, upon
receipt of advice from the Fund or its agent stating that the redemption is
in good form for redemption in accordance with the check redemption
procedure, honor the check presented as part of such check redemption
privilege out of the monies specifically allocated to the Fund in such
advice for such purpose.
9. Indebtedness.
(a) The Fund will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Fund borrows money for temporary
administrative or emergency purposes using Securities as collateral for
such borrowings, a notice or undertaking in the form currently employed by
any such bank setting forth the amount which such bank will loan to the
Fund against delivery of a stated amount of collateral. The Fund shall
promptly deliver to the Custodian Written Instructions stating with respect
to each such borrowing: (1) the name of the bank; (2) the amount and terms
of the borrowing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other loan
agreement; (3) the time and date, if known, on which the loan is to be
entered into (the "borrowing date"); (4) the date on which the loan becomes
due and payable; (5) the total amount payable to the Fund on the borrowing
date; (6) the market value of Securities to be delivered as collateral for
such loan, including the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities; (7) whether
the Custodian is to deliver such collateral through the Book-Entry System
or the Depository; and (8) a statement that such loan is in conformance
with the 1940 Act and the Fund's Prospectus.
(b) Upon receipt of the Written Instruction referred to in subparagraph (a)
above, the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery by
the lending bank of the total amount of the loan payable, provided that the
same conforms to the total amount payable as set forth in the Written
Instruction. The Custodian may, at the option of the lending bank, keep
such collateral in its possession, but such collateral shall be subject to
all rights therein given the lending bank by virtue of any promissory note
or loan agreement. The Custodian shall deliver as additional collateral in
the manner directed by the Fund from time to time such Securities as may be
specified in Written Instruction to collateralize further any transaction
described in this Section 9. The Fund shall cause all Securities released
from collateral status to be returned directly to the Custodian, and the
Custodian shall receive from time to time such return of collateral as may
be tendered to it. In the event that the Fund fails to specify in Written
Instruction all of the information required by this Section 9, the
Custodian shall not be under any obligation to deliver any Securities.
Collateral returned to the Custodian shall be held hereunder as it was
prior to being used as collateral.
10. Persons Having Access to Assets of the Fund.
(a) No trustee or agent of the Fund, and no officer, director, employee or
agent of the Fund's investment adviser, of any sub-investment adviser of
the Fund, or of the Fund's administrator, shall have physical access to the
assets of the Fund held by the Custodian or be authorized or permitted to
withdraw any investments of the Fund, nor shall the Custodian deliver any
assets of the Fund to any such person. No officer, director, employee or
agent of the Custodian who holds any similar position with the Fund's
investment adviser, with any sub-investment adviser of the Fund or with the
Fund's administrator shall have access to the assets of the Fund.
(b) Nothing in this Section 10 shall prohibit any duly authorized officer,
employee or agent of the Fund, or any duly authorized officer, director,
employee or agent of the investment adviser, of any sub-investment adviser
of the Fund or of the Fund's administrator, from giving Oral Instructions
or Written Instructions to the Custodian or executing a Certificate so long
as it does not result in delivery of or access to assets of the Fund
prohibited by paragraph (a) of this Section 10.
11. Concerning the Custodian.
(a) Standard of Conduct. Notwithstanding any other provision of this
Agreement, neither the Custodian nor its nominee shall be liable for any
loss or damage, including counsel fees, resulting from its action or
omission to act or otherwise, except for any such loss or damage arising
out of the negligence or willful misconduct of the Custodian or any of its
employees, sub-custodians or agents. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion of counsel to
the Fund or of its own counsel, at the expense of the Fund, and shall be
fully protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. The Custodian shall not be
liable to the Fund for any loss or damage resulting from the use of the
Book-Entry System or the Depository, except for any loss or damage arising
by reason of any negligence or willful misconduct on the part of the
Custodian or any of its employees, subcustodians or agents.
(b) Limit of Duties. Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire into, and shall
not be liable for:
1. The validity of the issue of any Securities
purchased by the Fund, the legality of the purchase
thereof, or the propriety of the amount paid therefor;
2. The legality of the sale of any Securities by the
Fund or the propriety of the amount for which the
same are sold;
3. The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received
therefor;
4. The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Fund;
6. The legality of any borrowing for temporary or
emergency administrative purposes.
(c) No Liability Until Receipt. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not represented by
any check, draft, or other instrument for the payment of money, received by
it on behalf of the Fund until the Custodian actually receives and collects
such money directly or by the final crediting of the account representing
the Fund's interest in the Book-Entry System or the Depository.
(d) Amounts Due from Transfer Agent. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount due to
the Fund from the Transfer Agent nor to take any action to effect payment
or distribution by the Transfer Agent of any amount paid by the Custodian
to the Transfer Agent in accordance with this Agreement.
(e) Collection Where Payment Refused. The Custodian shall not be under any
duty or obligation to take action to effect collection of any amount, if
the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (i)
it shall be directed to take such action by a Certificate and (ii) it shall
be assured to its satisfaction of reimbursement of its costs and expenses
in connection with any such action.
(f) Appointment of Agents and Sub-Custodians. The Custodian may appoint one
or more banking institutions, including but not limited to banking
institutions located in foreign countries, to act as Depository or
Depositories or as sub-custodian or as sub-custodians of Securities and
monies at any time owned by the Fund. The Custodian shall use reasonable
care in selecting a Depository and/or sub-custodian located in a country
other than the United States ("Foreign Sub-Custodian"), and shall oversee
the maintenance of any Securities or monies of the Fund by any Foreign
Sub-Custodian. In addition, the Custodian shall hold the Fund harmless
from, and indemnify the Fund against, any loss that occurs as a result of
the failure of any Foreign Sub-Custodian to exercise reasonable care with
respect to the safekeeping of Securities and monies of the Fund.
Notwithstanding the generality of the foregoing, however, the Custodian
shall not be liable for any losses resulting from or caused by events or
circumstances beyond its reasonable control, including, but not limited to,
losses resulting from nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar
action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority
of currency restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or acts of war, terrorism, insurrection or
revolution; or any other similar act or event beyond the Custodian's
control.
(g) No Duty to Ascertain Authority. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be held by
the Fund under the provisions of the Trust Agreement and the Prospectus.
(h) Compensation of the Custodian. The Custodian shall be entitled to
receive, and the Fund agrees to pay to the Custodian, such compensation as
may be agreed upon from time to time between the Custodian and the Fund.
The Custodian may charge against any monies held on behalf of the Fund
pursuant to this Agreement such compensation and any expenses incurred by
the Custodian in the performance of its duties pursuant to this Agreement.
The Custodian shall also be entitled to charge against any money held on
behalf of the Fund pursuant to this Agreement the amount of any loss,
damage, liability or expense incurred with respect to the Fund, including
counsel fees, for which it shall be entitled to reimbursement under the
provisions of this Agreement. The expenses which the Custodian may charge
against such account include, but are not limited to, the expenses of
sub-custodians and foreign branches of the Custodian incurred in settling
transactions outside of Boston, Massachusetts or New York City, New York
involving the purchase and sale of Securities.
(i) Reliance on Certificates and Instructions. The Custodian shall be
entitled to rely upon any Certificate, notice or other instrument in
writing received by the Custodian and reasonably believed by the Custodian
to be genuine and to be signed by an officer or Authorized Person of the
Fund. The Custodian shall be entitled to rely upon any Written Instructions
or Oral Instructions actually received by the Custodian pursuant to the
applicable Sections of this Agreement and reasonably believed by the
Custodian to be genuine and to be given by an Authorized Person. The Fund
agrees to forward to the Custodian Written Instructions from an Authorized
Person confirming such Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand
delivery, telex or otherwise, by the close of business on the same day that
such Oral Instructions are given to the Custodian. The Fund agrees that the
fact that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or enforceability
of the transactions hereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions
provided such instructions reasonably appear to have been received from a
duly Authorized Person.
(j) Overdraft Facility and Security for Payment. In the event that the
Custodian is directed by Written Instruction (or Oral Instructions
confirmed in writing in accordance with Section 11(i) hereof) to make any
payment or transfer of monies on behalf of the Fund for which there would
be, at the close of business on the date of such payment or transfer,
insufficient monies held by the Custodian on behalf of the Fund, the
Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Fund in an amount sufficient to allow the completion of
such payment or transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by the Fund and
the Custodian; and (b) shall accrue interest from the date of the Overdraft
to the date of payment in full by the Fund at a rate agreed upon in
writing, from time to time, by the Custodian and the Fund. The Custodian
and the Fund
acknowledge that the purpose of such Overdraft is to temporarily finance
the purchase of Securities for prompt delivery in accordance with the terms
hereof, to meet unanticipated or unusual redemptions, to allow the
settlement of foreign exchange contracts or to meet other emergency
expenses not reasonably foreseeable by the Fund. The Custodian shall
promptly notify the Fund in writing (an "Overdraft Notice") of any
Overdraft by facsimile transmission or in such other manner as the Fund and
the Custodian may agree in writing. To secure payment of any Overdraft, the
Fund hereby grants to the Custodian a continuing security interest in and
right of setoff against the Securities and cash in the Fund's account from
time to time in the full amount of such Overdraft. Should the Fund fail to
pay promptly any amounts owed hereunder, the Custodian shall be entitled to
use available cash in the Fund's account and to liquidate Securities in the
account as is necessary
to meet the Fund's obligations under the Overdraft. In any such case, and
without limiting the foregoing, the Custodian shall be entitled to take
such other actions(s) or exercise such other options, powers and rights as
the Custodian now or hereafter has as a secured creditor under the
Massachusetts Uniform Commercial Code or any other applicable law.
(k) Inspection of Books and Records. The books and records of the Custodian
shall be open to inspection and audit at reasonable times by officers and
auditors employed by the Fund and by the appropriate employees of the
Securities and Exchange Commission.
The Custodian shall provide the Fund with any report obtained by the
Custodian on the system of internal accounting control of the Book-Entry
System or the Depository and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time.
12. Term and Termination.
(a) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect thereafter until such
time as this Agreement may be terminated in accordance with the provisions
hereof.
(b) Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt
of such notice. In the event such notice is given by the Fund, it shall be
accompanied by a certified vote of the Board of Trustees of the Fund,
electing to terminate this Agreement and designating a successor custodian
or custodians, which shall be a person qualified to so act under the 1940
Act.
In the event such notice is given by the Custodian, the Fund shall, on or
before the termination date, deliver to the Custodian a certified vote of
the Board of Trustees of the Fund, designating a successor custodian or
custodians. In the absence of such designation by the Fund, the Custodian
may designate a successor custodian, which shall be a person qualified to
so act under the 0000 Xxx. If the Fund fails to designate a successor
custodian, the Fund shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by the Custodian of all
Securities (other than Securities held in the Book-Entry System which
cannot be delivered to the Fund) and monies then owned by the Fund, be
deemed to be its own custodian and the Custodian shall thereby be relieved
of all duties and responsibilities pursuant to this Agreement, other than
the duty with respect to Securities held in the Book-Entry System which
cannot be delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 12, this Agreement shall terminate to the extent specified in such
notice, and the Custodian shall upon receipt of a notice of acceptance by
the successor custodian on that date deliver directly to the successor
custodian all Securities and monies then held by the Custodian on behalf of
the Fund, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
13. Limitation of Liability.
The Fund and the Custodian agree that the obligations of the Fund under
this Agreement shall not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future,
of the Fund, individually, but are binding only upon the assets and
property of the Fund, as provided in the Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees of the
Fund, and signed by an authorized officer of the Fund, 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 or any
shareholder of the Fund individually or to impose any liability on any of
them or any shareholder of the Fund personally, but shall bind only the
assets and property of the Fund as provided in the Trust Agreement.
14. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by the Secretary
of the Fund setting forth the names and the signatures of the present
Authorized Persons. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
certification shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the present Authorized Persons as set forth in the last
delivered certification.
(b) Annexed hereto as Appendix B is a certification signed by the Secretary
of the Fund setting forth the names and the signatures of the present
officers of the Fund. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event any such present officer ceases
to be an officer of the Fund or in the event that other or additional
officers are elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signature of an officer as set forth
in the last delivered certification.
(c) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at
Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or at such other place as the
Custodian may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund, shall be sufficiently given if
addressed to the Fund and mailed or delivered to its Controller, c/o
Colonial Management Association, Inc., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 with a copy to its President, c/o Liberty Asset
Management Company, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at
such other place as the Fund may from time to time designate in writing.
(e) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties with the same formality as this
Agreement, (i) authorized, or ratified and approved by a vote of the Board
of Trustees of the Fund, or (ii) authorized, or ratified and approved by
such other procedures as may be permitted or required by the 1940 Act.
(f) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent
of the Fund authorized or approved by a vote of the Board of Trustees of
the Fund provided, however, that any attempted assignment without such
written consent shall be null and void. Nothing in this Agreement shall
give or be construed to give or confer upon any third party any rights
hereunder.
(g) The Fund represents that a copy of the Trust Agreement is on file with
the Secretary of the Commonwealth of Massachusetts and with the Boston City
Clerk.
(h) This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts.
(i) The captions of the Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(j) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives duly authorized as of the day and
year first above written.
LIBERTY ALL-STAR EQUITY FUND
By:
Name:
Title:
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By:
Name:
Title:
APPENDIX A
XXXXXXXXXXXX, the Secretary, of XXXXXXXXXXXXXXXXX, a business trust
organized under the laws of the Commonwealth of Massachusetts (the "Fund"), do
hereby certify that:
The following individuals have been duly authorized as Authorized Persons to
give Oral Instructions and Written Instructions on behalf of the Fund and the
specimen signatures set forth opposite there respective names are their true and
correct signatures:
Name Signature
Secretary
Dated:
APPENDIX B
XXXXXXXXXXXXXXXX, the Secretary of XXXXXXXXXXXXXXXXXXXXXX, a business trust
organized under the laws of the Commonwealth of Massachusetts (the "Fund"), do
hereby certify that:
The following individuals serve in the following positions with the Fund and
each individual has been duly elected or appointed to each such position and
qualified therefor in conformity with the Fund's Trust Agreement and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
Name Position Signature
SCHEDULE A
[omitted]
SCHEDULE B
[omitted]
