1
EX-99.B 8(j)
CUSTODY AGREEMENT
This Agreement is made as of the 9th day of November, 1992 (the
"Agreement"), by and between STAGECOACH FUNDS, INC. on behalf of the
Diversified Income Fund (hereinafter called the "Fund"), and XXXXX FARGO BANK,
N.A., (hereinafter called the "Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meaning:
1. "Authorized Person" shall be deemed to include the treasurer, the
controller or any other person, whether or not any such person is an Officer or
employee of the Fund, duly authorized by the Board of Directors ("Directors")
of the Fund to give Oral Instructions and Written Instructions on behalf of the
Fund and listed in the Certificate attached hereto as Appendix A or such other
Certificate as may be received from time to time by the Custodian.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and Federal agency securities, its
successor(s) and its nominee(s).
3. "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 Officers of the Fund.
4. "Clearing Member" shall mean a registered broker/dealer which is a
member of a national securities exchange qualified to act as a custodian for an
investment company, or any broker/dealer reasonably believed by the Custodian
to be such a clearing member.
5. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees, provided the Custodian has
received a certified copy of a resolution of the Fund's Directors specifically
approving deposits in DTC. The term "Depository" shall further mean and
include any person authorized to act as a depository under the Investment
Company Act of 1940, its successor(s) and its nominee(s), specifically
identified in a certified copy of a resolution of the Fund's Directors
specifically approving deposits therein by the Custodian.
6. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, or Clearing Member, or in the name of the Fund for the benefit
of a broker, dealer, or Clearing Member, or otherwise, in accordance with an
agreement between the Fund, the Custodian and a
2
broker, dealer, or Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or the Depository shall be deemed to have deposited
in, or withdrawn from, a Margin Account upon the Custodian's effecting an
appropriate entry on its books and records.
7. "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and interest
by the government of the United States or agencies or instrumentalities
thereof, commercial paper, certificates of deposit and bankers' acceptances,
repurchase and reverse repurchase agreements with respect to the same and bank
time deposits, where the purchase and sale of securities normally requires
settlement in Federal funds on the same date as such purchase or sale.
8. "Officers" shall be deemed to include the President, and Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary and Assistant Treasurer or any other person or persons duly
authorized by the Directors of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in the
Certificate attached hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
9. "Oral Instructions" shall mean verbal instructions actually received
by the Custodian from an Authorized Person or from a person reasonably believed
by the Custodian to be an Authorized Person.
10. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells and agrees to repurchase such Securities at a described or
specified date and price.
11. "Security" or "Securities" shall be deemed to include, without
limitation, Money Market Securities, Reverse Repurchase Agreements, common
stock and other instruments or rights having characteristics similar to common
stocks, preferred stocks, debt obligations issued by state or municipal
governments and by public authorities (including, without limitation, general
obligations bonds), bonds, debentures, notes, mortgages or other obligations,
and other certificates, receipts, warrants or other instruments representing
rights to receive, purchase, sell or subscribe for the same, or evidencing or
representing any other rights or interest therein, or any property or assets.
12. "Segregated Security Account" shall mean an account maintained under
the terms of this Agreement as a segregated account, by recordation or
otherwise, within the custody account in which certain Securities and/or assets
of the Fund shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian in connection with such
transactions as the Fund may from time to time determine.
13. "Shares" shall mean the shares of beneficial interest of the Fund,
each of which, in the case of a Fund having Series, is allocated to-a
particular Series.
2
3
14. "Written Instructions" shall mean written communications actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or any other such
system whereby the receiver of such communications is able to verify by codes
or otherwise with a reasonable degree of certainty the authenticity of the
sender of such communication.
ARTICLE II
APPOINTMENT OF A CUSTODIAN
l. The Fund hereby constitutes and appoints the Custodian as custodian
of all the Securities and moneys at any time owned by the Fund during the term
of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees
to perform all the duties thereof as set forth in this Agreement.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
l. Except as otherwise provided in Article V, the Fund will deliver or
cause to be delivered to the Custodian all Securities and all moneys owned by
it, including cash received for the issuance of its Shares, at any time during
the term of this Agreement. The Custodian will not be responsible for such
Securities and such moneys until actually received by it. The Custodian will
be entitled to reverse any credits made on the Fund's behalf where such credits
have been previously made and moneys are not finally collected. the Fund shall
deliver to the Custodian a certified resolution of the Directors of the Fund
authorizing and instructing the Custodian on a continuous and ongoing basis to
deposit in the Book-Entry System all Securities eligible for deposit therein
and utilize the Book-Entry System to the extent possible in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales-of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Prior to a deposit of
Securities of the Fund in the Depository, the Fund shall deliver to the
Custodian a certified resolution of the Directors of the Fund approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities eligible for deposit
therein and to utilize the Depository to the extent possible in connection with
its performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys of the
Fund deposited in either 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 in which the Custodian acts
in a fiduciary or representative capacity.
2. The Custodian shall credit a separate account in the name of the Fund
all moneys received by it for the account of the Fund, and shall disburse the
same only:
(a) In payment for Securities purchased, as provided in Article IV hereof;
3
4
(b) In payment of dividends or distributions, as provided in Article VIII
hereof;
(c) In payment of original issue or other taxes, as provided in Article
IX hereof;
(d) In payment for Shares redeemed by it, as provided in Article IX
hereof;
(e) Pursuant to Certificates setting forth the name and addresses of the
person to whom the payment is to be made, and the purpose-e for which payment
is to be made; or
(f) In payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian, as provided in Article XII hereof.
3. 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 during said day. Where securities are transferred to
the account of the Fund, the Custodian shall also by book-entry or otherwise
identify as belonging to the Fund a quantity of Securities 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 hooks of the Book-Entry System or the
Depository. The Custodian shall furnish the Fund at least monthly with a
detailed statement of the Securities and moneys held for the Fund under this
Agreement.
4. Except as otherwise provided in Article V, 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 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(s) or their
nominee(s). 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 which are
not held in the Book-Entry System or in the Depository in a separate account in
the name of the Fund physically segregated at all times from those of any other
person or persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Custodian by itself, or
through the use of the Book-Entry System or the Depository with respect to the
Securities therein deposited, shall with respect to all Securities held for the
Fund in accordance with this Agreement:
(a) Collect all income due or payable;
(b) Present for payment and collect the account payable upon such
Securities which are called, but only if either (i) the Custodian receives a
written notice of such call, or (ii) notice of
4
5
such call appears in one or more of the publications listed in Appendix C
annexed hereto, which may be amended at any time by the Custodian upon five
business days' prior notifications to the Fund:
(c) Present for payment and collect the amount payable upon all Securities
which mature;
(d) Surrender Securities in temporary form for definitive Securities;
(e) Execute, as Custodian, 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
(f) 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.
6. Upon receipt of a Certificate and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository, shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities may be exercised;
(b) Deliver 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;
(c) Deliver any Securities held for the Fund to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
(d) Make such transfer or exchanges of the assets of the Fund and take
such other steps as shall be stated in said order to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation, or recapitalization of the Fund; and
(e) Present for payment and collect the amount payable upon Securities
not described in preceding paragraph 5(b) of this Article which may be called
as specified in the Certificate.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase or sale (as applicable) of Securities by
the Fund, other than a purchase or sale of any Reverse Repurchase Agreement,
the Fund shall deliver to the
5
6
Custodian (i) with respect to each purchase or sale of Securities which are not
Money Market Securities, a Certificate; and (ii) with respect to each purchase
or sale of Money Market Securities, a Certificate, Oral Instructions or Written
Instructions, specifying with respect to each purchase or sale: (a) the name of
the issuer and the title of the Securities; (b) the number of shares or the
principal amount purchased or sold and accrued interest, if any; (c) the date
of purchase or sale and settlement date; (d) the purchase or sale price per
unit; (e) the total amount payable upon such purchase or sale; (f) the name of
the person from whom or the broker through whom the purchase or sale was made,
and the name of the clearing broker, if any; (g) in the case of a purchase, the
name of the broker to which payment is to be made; and (h) in the case of a
sale, the name of the broker to whom the Securities are to be delivered. In
the case of a purchase, the Custodian shall, upon receipt of Securities
purchased by or for the Fund, pay out of the moneys held for the account of the
Fund the total amount payable to the person from whom, or the broker through
whom, the purchase was made, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral Instructions or Written
Instructions. In the case of a sale, the Custodian shall deliver the
Securities upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in
such Certificate, Oral Instructions or Written Instructions. 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.
ARTICLE V
SHORT SALES
1. Promptly after any short sale, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the name of the issuer and the title of
the Security; (b) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (c) the dates of the sale and settlement; and
(d) the sale price per unit; (e) the total amount credited to the Fund upon
such sales if any; (f) the amount of cash and/or the amount and kind of
Securities, if any, which are to be deposited in a Margin Account and the name
in which such Margin Account has been or is to be established; (g) the amount
of cash and/or the amount and kind of Securities, if any, to be deposited in a
Segregated Security Account; and (h) the name of the broker through which such
short sale was made. The Custodian shall upon its receipt of a statement from
such broker confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by such broker
for the account of the Custodian (or any nominee of the Custodian) as custodian
of the Fund, issue a receipt or make the deposits into the Margin Account and
the Segregated Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such closing-out: (a) the name of the issuer and the title of the Security; (b)
the number of shares or the principal amount, and accrued interest or
dividends, if any, required to effect such closing-out to be delivered to the
broker; (c) the dates of the closing-out and settlement; (d) the purchase price
per unit; (e) the net total amount payable to the Fund upon such closing-out;
(f) the net total amount payable to the broker upon such closing-out; (g) the
amount of cash and the amount and kind of Securities, if any, to be
6
7
withdrawn, from the Margin Account; (h) the amount of cash and/or the amount
and kind of Securities, if any, to be withdrawn from the Segregated Security
Account; and (i) the name of the broker through which the Fund is effecting
such closing-out. The Custodian shall, upon receipt of the net total amount
payable to the Fund upon such closing-out and the return and/or cancellation of
the receipts, if any, issued by the Custodian with respect to the short sale
being closed-out, pay out the moneys held for the account of the Fund to the
broker the net total amount payable to the broker, and make the withdrawals
from the Margin Account and the Segregated Security Account as the same are
specified in the Certificate.
ARTICLE VI
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse Repurchase Agreement
with respect to Securities and money he]d by the Custodian hereunder, the Fund
shall deliver to the Custodian a Certificate, or in the event such Reverse
Repurchase Agreement is a Money Market Security, a Certificate, Oral
Instructions or Written Instructions specifying: (a) the total amount payable
to the Fund in connection with such Reverse Repurchase Agreement; (b) the
broker or dealer through or with which the Reverse Repurchase Agreement is
entered; (c) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (d) the date of such Reverse Repurchase Agreement; and
(e) the amount of cash and/or the amount and kind of Securities, if any, to be
deposited in a Segregated Security Account in connection with such Reverse
Repurchase Agreement. The Custodian shall, upon receipt of the total amount
payable to the Fund specified in the Certificate, Oral Instructions or Written
Instructions make the delivery to the broker or dealer, and the deposits, if
any, to the Segregated Security Account, specified in such Certificate, Oral
Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
paragraph l of this Article VI, the Fund shall promptly deliver a Certificate
or, in the event such Reverse Repurchase Agreement is a Money Market Security,
a Certificate, Oral Instructions or Written Instructions to the Custodian
specifying: (a) the Reverse Repurchase Agreement being terminated; (b) the
total amount payable by the Fund in connection with such termination; (c) the
amount and kind of Securities to be received by the Fund in connection with
such termination; (d) the date of termination; (e) the name of the broker or
dealer with or through which the Reverse Repurchase agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind of Securities
to be withdrawn from the Segregated Security Account. The Custodian shall,
upon receipt of the amount and kind of Securities to be received by the Fund
specified in the Certificate, Oral Instructions or Written Instructions, make
the payment to the broker or dealer, and the withdrawals, if any, from the
Segregated Security Account, specified in such Certificate, Oral Instructions
or Written Instructions.
7
8
ARTICLE VII
MARGIN ACCOUNTS, SEGREGATED SECURITY ACCOUNTS
AND COLLATERAL ACCOUNTS
l. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Segregated Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the amount of cash
and/or the amount and kind of Securities to be deposited in, or withdrawn from,
the Segregated Security Account. In the event that the Fund fails to specify
in a Certificate the name of the issuer, the title and the number of shares or
the principal amount of any particular Securities to be deposited by the
Custodian into, or withdrawn from, a Segregated Securities Account, the
Custodian shall be under no obligation to make any such deposit or withdrawal
and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin Account
to the broker, dealer or Clearing Member in whose name, or for whose benefit,
the account was established as specified in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt with in
accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security interest in
and to any property at any time held by the Custodian in any Collateral Account
described herein.
5. On each business day, the Custodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker or dealer specified in the name of a
Margin Account a copy of the statement furnished the Fund with respect to such
Margin Account.
6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account, the Custodian
shall furnish the Fund with a statement with respect to such Collateral Account
specifying the amount of cash and/or the amount and kind of Securities held
therein. No later than the close of business next succeeding the delivery of
the Fund of such statement, the Fund shall furnish to the Custodian a
Certificate or Written Instructions specifying the then market value of the
Securities described in such statement.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the resolution of
the Directors, certified by the Secretary or any Assistant Secretary, either
(i) setting forth the date of the declaration of a dividend or distribution,
the date of payment thereof, the record date as of which
8
9
shareholders entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily basis or
some other periodic basis and authorizing the Custodian to rely on Oral
Instructions, Written Instructions, or a Certificate setting forth the date of
the declaration of such dividend or 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
that date and the total amount payable to the Dividend Agent on the payment
date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions or Certificate, the Custodian shall pay out
the moneys held for the account of the Find the total amount payable to the
Dividend Agent of the Fund.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any of its Shares, it shall deliver to
the Custodian a Certificate duly specifying the number of Shares sold, trade
date, price and the amount of money to be received by the Custodian for the
sale of such Shares.
2. Upon receipt of such money from the Transfer Agent or Co-Transfer
Agent, the Custodian shall credit such money to the account of the Fund.
3. Upon issuance of any of the Fund's Shares in accordance with the
foregoing provisions of this Article IX, the Custodian shall pay, out of the
money held for the account of the Fund, all original issue or other taxes
required to be paid by the Fund in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund shall redeem any of
its Shares, it shall furnish to the Custodian a Certificate specifying the
number of Shares redeemed and the amount to be paid for the Shares redeemed.
5. Upon receipt from the Transfer Agent or Co-Transfer Agent of an
advice setting forth the number of Shares received by the Transfer Agent or
Co-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 as
the case may be, out of the moneys held for the account of the Fund of the
total amount specified in the Certificate issued pursuant to paragraph 4 of
this Article IX.
6. Notwithstanding the above provisions regarding the redemption of any
of the Fund's Shares. Whenever its 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 Certificate, shall, upon receipt of
an advice from the Fund or its agent setting forth 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
money held in the account of the Fund for such purposes.
9
10
ARTICLE X
OVERDRAFTS OF INDEBTEDNESS
1. The Custodian may, in its sole discretion, advance funds on behalf of
the Fund which results in an overdraft because the moneys held by the Custodian
for the account of the Fund shall be insufficient to pay the total amount
payable upon a purchase of Securities as set forth in a Certificate or Oral
Instructions issued pursuant to Article IV or which results in an overdraft for
some other reason, or if the Fund is for any other reason indebted to the
Custodian (except a borrowing for investment or for temporary or emergency
purposes using Securities as collateral pursuant to a separate agreement and
subject to the provisions of paragraph 2 of this Article X.)
2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary 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 or collateral. The Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a) the name of the
bank; (b) 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; (c) the time and date, if known, on which the
loan is to be entered into; (d) the date on which the loan becomes due and
payable; (e) the total amount payable to the Fund on the borrowing date; (f)
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 of any particular Securities and (g) a statement specifying whether
such loan is for investment purposes or for temporary or emergency purposes and
that such loan is in conformance with the Investment Company Act of 1940 and
the Fund's prospectus. The Custodian shall deliver on the borrowing date
specified in a Certificate 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 amounts payable as
set forth in the Certificate. 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 such Securities
as additional collateral as may be specified in a Certificate to collateralize
further any transaction described in this paragraph. 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 a Certificate the name of the issuer, the title and number of shares
or the principal amount of any particular Securities to be delivered as
collateral by the Custodian, the Custodian shall not be under any obligation to
deliver any Securities.
10
11
ARTICLE XI
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of its Articles of
Incorporation and as disclosed in its most recent and currently effective
prospectus to lend its portfolio securities, within twenty-four (24) hours
after each loan of portfolio Securities the Fund shall deliver or cause to be
delivered to the Custodian a Certificate 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 against the loan
of the Securities, including the amount of cash collateral and the premium, if
any, separately identified; and (e) the name of the broker, dealer or financial
institution to which the loan was made. The Custodian shall deliver the
securities thus designated to the broker, dealer, or financial institution to
which the loan was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may accept payment in
connection with a delivery otherwise than through the Book-Entry System or
Depository only in the form of a certified or a bank cashier's check payable to
the order of the fund or the custodian drawn on New York Clearing House Funds
and may deliver Securities in accordance with the customs prevailing among
dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Custodian a
Certificate 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 Certificate); and (e) the name of the broker, dealer or
financial institution from which the Securities will be returned. 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 repay, out of the moneys held for the account of the Fund, the
total amount payable upon such return of Securities as set forth in the
Certificate.
ARTICLE XII
THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its nominee
shall be liable for any loss or damage, including attorney's fees, resulting
from its action or omission to act or otherwise, either hereunder or under any
Margin Account Agreement, except for any such loss or damage arising out of its
own negligence or willful misconduct. The Custodian may, with respect to
questions of law arising hereunder or under any Margin Account Agreement, 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 be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any Depository arising by
reason of any negligence, misfeasance or willful misconduct on the part of the
Custodian or any of its employees or agents.
11
12
2. Without limiting the generality of the foregoing, the Custodian shall
be under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount Paid or received thereof;
(b) The legality of the issue or sale of any of the Fund's Shares, or the
sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any of the Fund's Shares, or the
propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any dividend by the
Fund;
(e) The legality of any borrowing by the Fund using Securities as
collateral;
(f) The legality of any loan of portfolio Securities pursuant to Article
XI of this Agreement nor shall the Custodian be under any duty or obligation to
see to it that any cash collateral delivered to it by a broker, dealer or
financial institutions or held by it at anytime as a result of such loan of
portfolio Securities of the Fund is adequate collateral for the Fund against
any loss it might sustain as a result of such loan. The Custodian
specifically, but not by way of limitation, shall not be under any duty or
obligation periodically to check or notify the Fund that the amount of such
cash collateral held by it for the Fund is sufficient collateral for the Fund,
but such duty or obligation shall be the sole responsibility of the Fund. In
addition, the Custodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio Securities of the
Fund are lent pursuant to Article XI of this Agreement makes payment to it of
any dividends or interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such loan, provided,
however, that the Custodian shall promptly notify the Fund in the event that
such dividends or interest are not paid and received when due; or
(g) The sufficiency or value of any amounts of money and/or Securities
held in any Margin Account, Segregated Security Account or Collateral Account
in connection with transactions by the Fund. In addition, the Custodian shall
be under no duty or obligation to see that any broker, dealer or Clearing
Member makes payment to the fund of any variation margin payment or similar
payment which the Fund may be entitled to receive from such broker, dealer, or
Clearing Member, to see that any payment received by the Custodian from any
broker, dealer, or Clearing Member is the amount the Fund is entitled to
receive, or to notify the Fund of the Custodian's receipt or non-receipt of any
such payment; provided however that the Custodian, upon the Fund's written
request, shall as Custodian, demand from any broker, dealer, or Clearing Member
identified by the Fund the payment of any variation margin payment or similar
payment that the Fund asserts it is entitled to receive pursuant to the terms
of a Margin Account Agreement or otherwise from such broker, dealer, or
Clearing Member.
12
13
3. 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 at the
Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable
for ascertaining or acting upon any calls, conversions, exchange, offers,
tenders, interest rate changes or similar matters relating to Securities held
in the Depository unless the Custodian shall have actually received timely
notice from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to collect, or
for the late collection or late crediting by the Depository of any amount
payable upon Securities deposited in the Depository which may mature or be
redeemed, retired, called or otherwise become payable. However, upon receipt
of a Certificate from the Fund of an overdue amount on Securities held in the
Depository, the Custodian shall make a claim against the Depository on behalf
of the Fund, except that the Custodian shall not be under any obligation to
appear in, prosecute or defend any action suit or proceeding in respect to any
Securities held by the Depository which in its opinion may involve it expense
or liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
5. 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 of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.
6. 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 .
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as Sub-Custodian or Sub-Custodians, including,
but not limited to, banking institutions located in foreign countries, of
Securities and moneys at any time owned by the Fund, upon terms and conditions
approved in the Certificate, which shall, if requested by the Custodian be
accompanied by an approving resolution of the Fund's Board of Directors adopted
in accordance with Rule 17f-5 under the Investment Company Act of 1940, as
amended.
8. 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 account
of the Fund are such as properly may be held by the Fund under the provisions
of its Articles of Incorporation.
9. The Custodian shall be entitled to receive and the Fund agrees to pay
to the Custodian all out-of-pocket expenses and fees as set forth in Appendix D
attached hereto. The Custodian may charge such fees and any expenses incurred
by the Custodian in the performance of its duties
13
14
against any money held by it for the account of the Fund. The Custodian shall
also be entitled to charge against any money held by it for the account of the
Fund the amount of any loss, damage, liability or expense, including attorney's
fees, for which it shall be entitled to reimbursement under the provisions of
this Agreement. The expense which the Custodian may charge against the account
of the Fund include, but are not limited to, the expenses of Sub-Custodians of
the Custodian incurred in settling outside of New York City transactions
involving the purchase and sale of securities of the Fund.
10. 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 a Certificate. The Custodian shall be entitled
to rely upon any Oral Instructions and any Written Instructions actually
received by the Custodian pursuant to Articles IV or VII hereof. The Fund
agrees to forward to the Custodian a Certificate or facsimile thereof,
confirming such Oral Instructions or Written Instructions in such manner so
that such Certificate or facsimile thereof is received by the Custodian,
whether by hand delivery, telex or otherwise, by the close of business of the
same day that such Oral Instructions or Written 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 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 an Authorized Person.
ll. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained if any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, or Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of the custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment Company
Act of 1940, as amended, and other applicable securities laws, rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Custodians normal business hours.
Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by the Custodian to the Fund or the Fund's authorized
representative at the Fund's expense.
13. 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.
14. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including attorney's fees, howsoever
14
15
arising or incurred because of or in connection with the Custodian's payment or
non-payment of checks pursuant to paragraph 6 of Article IX as part of any
check redemption privilege program of the Fund, except for any such liability,
claim, loss and demand arising out of the Custodian's own negligence or willful
misconduct.
15. Subject to the foregoing provisions of this Agreement, the Custodian
may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the Custodian
in accordance with the customs prevailing from time to time among brokers and
dealers in such Securities.
16. The Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement or Appendix E attached hereto, and no covenant or obligation shall be
implied in this Agreement against the Custodian.
ARTICLE XIII
TERMINATION
1. This Agreement shall continue until December 31, 1994, and thereafter
shall continue automatically for successive annual periods ending on December
31 of each year, provided such continuance is specifically approved at least
annually by (i) the Fund's Directors or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved by a
majority of the Fund's Directors who are not "interested persons" (as defined
in said Act) of any part to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is
terminable without penalty, on sixty (60) days' notice, by the Fund's Directors
or by vote of holders of a majority of the Fund's shares or, upon not less than
ninety (90) days' notice, by the Custodian. In the event such notice is given
by the Fund, it shall be accompanied by a copy of a resolution of the Directors
of the Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or custodians,
each of which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of its Directors, certified by
the Secretary or any Assistant Secretary, 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 bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits.
Upon the date set forth in such notice, this Agreement shall terminate and 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 moneys then owned by the Fund and held by its as Custodian,
after deducting all fees, expenses, and other amounts for the payment of
reimbursement of which shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, 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
15
16
held in the Book-Entry System which cannot be delivered to the Fund) and moneys
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, in any Depository or by a Clearing Member which cannot be
delivered to the Fund, to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE XIV
MISCELLANEOUS
l. Annexed hereto as Appendix A is a Certificate signed by an Officer of
the Fund under its seal, setting forth the names and the signatures of the
present Authorized Persons. The Fund agrees to furnish to the Custodian a new
certificate in similar form in the event that any such present Authorized
Person ceases to be an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
Certificate shall he 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 Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of the
present Officers of the Fund under its seal, setting forth the names and the
signatures of the present Officers of the Fund. The Fund agrees to furnish to
the Custodian a new Certificate 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 Certificate shall
be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon the signatures of the Officers as set forth
in the last delivered Certificate.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be deemed sufficiently given
if addressed to the Custodian and mailed or delivered to it at its offices at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, or at such other place
as the Custodian may from time to time designate in writing .
4. Any notice or other instrument in writing, authorized or required by
this Agreement to be given the Fund, shall be deemed sufficiently given if
addressed to the Fund and mailed or delivered to at its office at 000 Xxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx, 00000, or at such other place as the Fund may
from time to time designate in writing.
5. This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties to this Agreement and approved by
a resolution of the Directors of the Fund.
6. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successor(s) and assign(s); 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 resolution of its Directors.
16
17
7. This Agreement shall be construed in accordance with the laws of the
State of California.
8. This Agreement may be executed in any number of counterparts, each
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
9. This Agreement has been executed on behalf of the Fund by the
undersigned Officer of the Fund in his capacity as an Officer of the Fund. The
obligations of this Agreement shall only be binding upon the assets and
property of the Fund and shall not be binding upon any Director, Officer or
shareholder of the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the their respective Officers, thereunto duly authorized, as of the
day and year first above written.
STAGECOACH FUNDS, INC.
By: /s/Xxxxxxx X. Xxxxx, Xx.
------------------------------
Title: Secretary and Treasurer
---------------------------
XXXXX FARGO BANK, N.A.
By: /s/Xxxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President
---------------------------
By: /s/Xxxxx X. Xxxxxxx
------------------------------
Title: Vice President
---------------------------
17
