CUSTODY AND FUND ACCOUNTING AGREEMENT
BETWEEN
STAGECOACH TRUST
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
1. Bank Appointed Custodian............................................................................................. 1
2. Definitions.......................................................................................................... 1
2.1 Authorized Person............................................................................................. 1
2.2 Board 1
2.3 Security 1
2.4 Portfolio Security............................................................................................ 2
2.5 Officer's Certificate......................................................................................... 2
2.6 Book-Entry System............................................................................................. 2
2.7 Depository.................................................................................................... 2
2.8 Proper Instructions........................................................................................... 2
2.9 Foreign Securities............................................................................................ 2
2.10 Performance Calculations...................................................................................... 2
3. Separate Accounts.................................................................................................... 3
4. Certification as to Authorized Persons............................................................................... 3
5. Custody of Cash...................................................................................................... 3
5.1 Purchase of Securities........................................................................................ 3
5.2 Redemptions................................................................................................... 4
5.3 Distributions and Expenses of the Funds....................................................................... 4
5.4 Payment in Respect of Securities.............................................................................. 4
5.5 Repayment of Loans............................................................................................ 4
5.6 Repayment of Cash............................................................................................. 4
5.7 Foreign Exchange Transactions................................................................................. 4
5.8 Other Authorized Payments..................................................................................... 4
5.9 Termination................................................................................................... 5
6. Securities........................................................................................................... 5
6.1 Segregation and Registration.................................................................................. 5
6.2 Voting and Proxies............................................................................................ 5
6.3 Corporate Action.............................................................................................. 5
6.4 Book-Entry System............................................................................................. 6
6.5 Use of a Depository........................................................................................... 8
6.6 Use of Book-Entry System for Commercial Paper................................................................. 9
6.7 Use of Immobilization Programs................................................................................ 10
6.8 Eurodollar CDs................................................................................................ 10
6.9 Options and Futures Transactions.............................................................................. 10
6.10 Segregated Account............................................................................................ 11
6.11 Interest Bearing Call or Time Deposits........................................................................ 12
6.12 Transfer of Securities........................................................................................ 13
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7. Redemptions.......................................................................................................... 14
8. Merger, Dissolution, etc. of the Company or a Fund................................................................... 14
9. Actions of the Bank Without Prior Authorization...................................................................... 15
10. Collections and Defaults............................................................................................ 15
11. Maintenance of Records and Accounting Services...................................................................... 16
12. Fund Evaluation and Performance Calculation......................................................................... 16
12.1 Fund Evaluation............................................................................................... 16
12.2 Performance Calculations...................................................................................... 17
13. Concerning the Bank................................................................................................. 18
13.1 Bank Warranty................................................................................................. 18
13.2 Standard of Care and Performance of Duties.................................................................... 18
13.3 Agents and Sub-custodians with Respect to Property
of the Funds Held in the United States........................................................................ 20
13.4 Duties of the Bank with Respect to Property
Held Outside of the United States............................................................................. 20
13.5 Insurance..................................................................................................... 23
13.6 Fees and Expenses of Bank..................................................................................... 23
13.7 Advances by Bank.............................................................................................. 24
14. Termination......................................................................................................... 24
15. Confidentiality..................................................................................................... 25
16. Notices............................................................................................................. 25
17. Amendments.......................................................................................................... 26
18. Parties............................................................................................................. 26
19. Governing Law....................................................................................................... 26
20. Counterparts........................................................................................................ 26
21. Limitations of Liability............................................................................................ 26
22. Single Agreement.................................................................................................... 27
23. Counterparts........................................................................................................ 27
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CUSTODY AND FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this 21st day of October, 1996, between
STAGECOACH TRUST, a Massachusetts business trust (the "Company"), and INVESTORS
BANK & TRUST COMPANY (the "Bank" or, at times, "IBT").
The Company, an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), on behalf of the
individual Funds listed on Schedule A hereto, as such Schedule may be amended
from time to time, desires to place and maintain all of the Funds' portfolio
securities and other assets including cash in the custody of the Bank, and the
Bank has indicated its willingness to so act, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Company hereby appoints the Bank as
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custodian of the Funds' portfolio securities and cash delivered to the Bank as
hereinafter described, and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth.
2. Definitions. Whenever used herein, the terms listed below will
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have the following meanings:
2.1 Authorized Person. Authorized Person will mean any of the persons
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duly authorized to give Proper Instructions or otherwise act on behalf of the
Company and its Funds by appropriate resolution of the Board of Trustees of the
Company, and set forth in a certificate as required by Section 4 hereof.
2.2 Board. Board will mean the Company's Board of Trustees .
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2.3 Security. The term security as used herein will have the same
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meaning as when such term is used in the Securities Act of 1933, as amended (the
"1933 Act"), including, without limitation, any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security, certificate of deposit, or
group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege entered into on
a national securities exchange relating to a foreign currency, or, in general,
any interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to, or option contract to
purchase or sell any of the foregoing, and futures, forward contracts and
options thereon.
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2.4 Portfolio Security. Portfolio Security will mean any security
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owned by a Fund of the Company.
2.5 Officer's Certificate. Officer's Certificate will mean, unless
---------------------
otherwise indicated, any request, direction, instruction, or certification in
writing signed by an Authorized Person of the Company.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
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Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor(s) and its nominee(s).
2.7 Depository. Depository shall mean The Depository Trust Company
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("DTC") and any other clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and its successor(s) and its nominee(s). The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor(s) and its nominee(s),
specifically identified in a certified copy of a resolution of the Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
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instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the
Company shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Company shall cause all oral instructions to be promptly confirmed in
writing or by facsimile. The Bank shall act upon and comply with any subsequent
Proper Instruction which modifies a prior instruction, and the sole obligation
of the Bank with respect to any follow-up or confirmatory instruction shall be
to make reasonable efforts to detect any discrepancy between the original
instruction and such confirmation and to report such discrepancy to the Company.
The Company shall be responsible, at the expense of the applicable Fund, for
taking any action, including any reprocessing, necessary to correct any such
discrepancy or error, and, to the extent such action requires the Bank to act,
the Company shall give the Bank specific Proper Instructions as to the action
required. Upon receipt by the Bank of an Officer's Certificate as to the
authorization by the Board accompanied by a detailed description of procedures
approved by the Company, Proper Instructions may include communication effected
directly between electromechanical or electronic devices provided that the
Company and the Bank are satisfied that such procedures afford adequate
safeguards for a Fund's assets.
2.9 Foreign Securities. The term Foreign Securities as used herein
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will have the same meaning as when such term is used in Rule 17f-5 under the
1940 Act.
2.10 Performance Calculations. Performance Calculations as used
------------------------
herein shall include standard performance calculations required pursuant to the
1933 Act, the 1940 Act, and any applicable rules and interpretations of the
staff of the Securities and Exchange Commission,
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and shall also include other non-standard performance calculations as shall be
agreed upon by both parties to this Agreement from time to time.
3. Separate Accounts. The Bank will segregate the assets of each Fund to
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which this Agreement relates into a separate account for each such Fund
containing the assets of such Fund (and all investment earnings thereon).
Unless the context otherwise requires, any reference in this Agreement to any
actions to be taken by the Company shall be deemed to refer to the Company
acting on behalf of one or more of its Funds, any reference in this Agreement to
any assets of the Company, including, without limitation, any Portfolio
Securities and other assets including cash and any earnings thereon, shall be
deemed to refer only to assets of the applicable Fund, any duty or obligation of
the Bank hereunder to the Company shall be deemed to refer to duties and
obligations with respect to the individual Funds, and any obligation or
liability of the Company hereunder shall be binding only with respect to the
individual Fund and shall be discharged only out of the assets of such Fund.
4. Certification as to Authorized Persons. The Secretary or an Assistant
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Secretary of the Company will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
(i) the names and signatures of the Authorized Persons and (ii) the names of the
Board, it being understood that upon the occurrence of any change in the
information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or an
Assistant Secretary of the Company, will sign a new or amended certification
setting forth the change of the new, additional or omitted names or signatures.
The Bank will be entitled to rely and act upon any Officer's Certificate given
to it by the Company that has been signed by Authorized Persons named in the
most recent certification received by the Bank.
5. Custody of Cash. As custodian, the Bank will open and maintain a
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separate account or accounts in the name of each Fund or in the name of the
Bank, as custodian of the Funds, and will deposit to the account of a Fund all
of the cash of the Fund, except for cash held by a sub-custodian appointed
pursuant to subsections 13.3 or 13.4 hereof, including borrowed funds, delivered
to the Bank, subject only to draft or order by the Bank acting pursuant to the
terms of this Agreement. Upon receipt by the Bank of Proper Instructions (which
may be continuing instructions) or in the case of payments for redemptions and
repurchases of outstanding interests of a Fund, notification from the Fund's
transfer agent as provided in Section 7, requesting such payment, designating
the payee or the account or accounts to which the Bank will release funds for
deposit, and stating that it is for a purpose permitted under the terms of this
Section 5, specifying the applicable subsection, the Bank will make payments of
cash held for the accounts of the Fund, insofar as funds are available for that
purpose, only as permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for a
----------------------
Fund, against contemporaneous receipt of such securities by the Bank, or against
delivery of such securities to the Bank, in accordance with generally accepted
settlement practices or customs in the jurisdiction or market in which the
transaction occurs, such securities to be registered in the name
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of the Fund or in the name of, or properly endorsed and in form for transfer to,
the Bank, or a nominee of the Bank, or receipt for the account of the Bank
pursuant to the provisions of Section 6 below, each such payment to be made at
the purchase price shown on a broker's confirmation (or transaction report in
the case of Book Entry Paper) of purchase of the securities that is received by
the Bank before such payment is made and that has been confirmed in the Proper
Instructions also received by the Bank before such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
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repurchase or redemption of interests of a Fund offered for repurchase or
redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of the Funds. For the payment on the
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account of a Fund of dividends or other distributions to interestholders as may
from time to time be declared by the Board, interest, taxes, investment advisory
or administration fees, and, as and to the extent provided on Schedule B hereto,
any fees of the Bank for its services hereunder and any reimbursement of the
expenses and liabilities of the Bank related to such services with respect to a
Fund of the Company as provided pursuant to subsection 13.6 hereunder and on
Schedule B hereto.
5.4 Payment in Respect of Securities. For payments in connection with
--------------------------------
the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by a Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to a Fund, but,
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in the case of final payment, only upon redelivery to the Bank of any Portfolio
Securities pledged or hypothecated therefor and upon surrender of documents
evidencing the loan.
5.6 Repayment of Cash. To repay the cash delivered to a Fund for the
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purpose of collateralizing the obligation to return to a Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions. For payments in connection with
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foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery ("Foreign Exchange Agreements") that may be entered
into by the Bank on behalf of a Fund upon the receipt of Proper Instructions,
such Proper Instructions to specify the currency broker or banking institution
(which may be the Bank, or any other sub-custodian or agent hereunder, acting as
principal) with which the contract or option is made, and the Bank shall have no
duty with respect to the selection of such currency brokers or banking
institutions with which a Fund deals or for their failure to comply with the
terms of any contract or option.
5.8 Other Authorized Payments. For other authorized transactions of a
-------------------------
Fund, or other obligations of a Fund incurred for proper purposes with respect
to a Fund; provided that before making any such payment, the Bank also will
receive Proper Instructions or a certified copy of a resolution of the Board
signed by an Authorized Person (other than the Person certifying such
resolution) and certified by its Secretary or Assistant Secretary, naming the
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person or persons to whom such payment is to be made, and either describing the
transaction for which payment is to be made and declaring it to be an authorized
transaction of a Fund, or specifying the amount of the obligation for which
payment is to be made, setting forth the purpose for which such obligation was
incurred and declaring such purpose to be a proper corporate purpose.
5.9 Termination. Upon the termination of this Agreement as
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hereinafter set forth pursuant to Section 8 and Section 14 of this Agreement.
6. Securities.
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6.1 Segregation and Registration. Except as otherwise provided
----------------------------
herein, and except for Portfolio Securities to be delivered to any sub-custodian
appointed pursuant to subsections 13.2 or 13.3 hereof, the Bank as custodian,
will receive and hold pursuant to the provisions hereof, in a separate account
or accounts and physically segregated at all times from those of other persons,
any and all Portfolio Securities which may now or hereafter be delivered to it
by or for the account of a Fund. All such Portfolio Securities will be held or
disposed of by the Bank for, and subject at all times to, the instructions of
the Company pursuant to the terms of this Agreement. Subject to the specific
provisions herein relating to Portfolio Securities that are not physically held
by the Bank, the Bank will register all Portfolio Securities (unless otherwise
directed by Proper Instructions or an Officer's Certificate), in the name of a
registered nominee of the Bank as defined in the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, and will execute and
deliver all such certificates in connection therewith as may be required by such
laws or regulations or under the laws of any state. The Bank will use its best
efforts to the end that the specific Portfolio Securities held by it hereunder
will be at all times identifiable.
The Company, on behalf of a Fund, will from time to time furnish to the
Bank appropriate instruments to enable it to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee, any Portfolio
Securities which may from time to time be registered in the name of a Fund
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
------------------
will vote any of the Portfolio Securities held hereunder, except in accordance
with Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or will cause to be executed and delivered, to the Company or its
designated agent all notices, proxies and proxy soliciting materials with
respect to such Portfolio Securities, but without indicating the manner in which
such proxies are to be voted, such proxy to be executed by the registered holder
of such Portfolio Securities (if registered otherwise than in the name of a
Fund), in accordance with the Proper Instructions or an Officer's Certificate.
6.3 Corporate Action. If at any time the Bank is notified that an
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issuer of a Portfolio Security has taken or intends to take a corporate action
(a "Corporate Action") that affects the rights, privileges, powers, preferences,
qualifications or ownership of the Portfolio Security, including, without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which
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Corporate Action requires an affirmative response or action on the part of the
holder of such Portfolio Security (a "Response"), the Bank shall notify the
Company's designee, Barclays Global Fund Advisors ("BGFA"), promptly of the
Corporate Action, the Response required in connection with the Corporate Action,
and the Bank's deadline for receipt from the Company's designee, BGFA, of Proper
Instructions regarding the Response (the "Response Deadline"). Except as
provided in subsection 6.3(c) below, the date specified as the Response Deadline
shall not be more than 24 hours prior to the Response expiration day set by the
depository processing such Corporate Action. The Bank shall forward to the
Company's designee, BGFA, via facsimile and/or overnight courier all notices,
information statements or other materials relating to the Corporate Action
within twenty-four (24) hours of receipt of such materials by the Bank.
(a) The Bank shall act upon a required Response only after receipt by
the Bank of Proper Instructions from the Company's designee, BGFA, no later than
4:00 p.m. (Pacific time) on the date specified as the Response Deadline and only
if the Bank (or its agent or sub-custodian hereunder) has actual possession of
all Portfolio Securities (but only if such Portfolio Securities are necessary
for the consummation of the Corporate Action ("Necessary Portfolio
Securities")), consents and other materials no later than 4:00 p.m. (Pacific
time) on the date specified as the Response Deadline. Portfolio Securities in
the possession of a broker or other borrower pursuant to the Bank's securities
lending program shall be deemed to be in the possession of the Bank for the
purposes of this subsection 6.3.
(b) The Bank shall have no duty to act upon a required Response if
Proper Instructions relating to such Response and all Necessary Portfolio
Securities, consents and other materials are not received by and in the
possession of the Bank no later than 4:00 p.m. (Pacific time) on the date
specified as the Response Deadline. Notwithstanding, the Bank may, in its sole
discretion, use its best efforts to act upon a Response for which Proper
Instructions and/or Necessary Portfolio Securities, consents or other materials
are received by the Bank after 4:00 p.m. (Pacific time) on the date specified as
the Response Deadline, it being acknowledged and agreed by the parties that any
undertaking by the Bank to use its best efforts in such circumstances shall in
no way create any duty upon the Bank to complete such Response prior to its
expiration.
(c) In the event that the Company's designee, BGFA, notifies the Bank
of a Corporate Action requiring a Response and the Bank has received no other
notice of such Corporate Action, the Response Deadline shall be 48 hours prior
to the Response expiration time set by the depository processing such Corporate
Action.
(d) Subsection 13.4(g) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by a Selected Foreign Sub-
custodian.
6.4 Book-Entry System. Provided (i) the Bank has received a certified
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copy of a resolution of the Board specifically approving deposits of a Fund
assets in the Book-Entry System, and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officers Certificate to the Bank indicating
that the Board has withdrawn its approval:
6
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System that shall not include any
assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers:
(b) The records of the Bank (and any such agent) with respect to a
Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry Portfolio Securities that are included with
other securities deposited in the Account and shall at all times during the
regular business hours of the Bank (or such agent) be open for inspection by
duly authorized officers, employees or agents of the Company. Where securities
are transferred to a Fund's account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of Portfolio Securities
in a fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve
Bank;
(c) The Bank (or its agent) shall pay for securities purchased for
the account of a Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by a Fund upon (i) receipt of advice from the Book-
Entry System that such Securities have been transferred to the Account, and (ii)
the making of an entry on the records of the Bank (or its agent) to reflect such
payment and transfer for the account of the Fund. The Bank (or its agent) shall
transfer Portfolio Securities sold or loaned for the account of a Fund upon:
(i) receipt of advice from the Book-Entry System that payment
for securities sold or payment of the initial cash collateral against the
delivery of Portfolio Securities loaned by the Fund has been transferred to the
Account; and
(ii) the making of an entry on the records of the Bank (or its
agent) to reflect such transfer and payment for the account of a Fund. Copies of
all advices from the Book-Entry System of transfers of Portfolio Securities for
the account of a Fund shall identify the Fund, be maintained for the Fund by the
Bank and shall be provided to the Fund at its request. The Bank shall send a
Fund a confirmation, as defined by Rule 17f-4 under the 1940 Act, of any
transfers to or from the account of the Fund;
(d) The Bank will promptly provide the Company with any report
obtained by the Bank or its agent on the Book-Entry System's accounting system,
internal accounting control and procedures for safeguarding securities deposited
in the Book-Entry System;
(e) The Bank shall be liable to the Company and a Fund for any loss
or damage to the Fund resulting from use of the Book-Entry System by reason of
any negligent actions or inactions of the Bank or any of its agents or of any of
its or their employees, or from any failure by the Bank or any such agent to use
its best efforts to enforce such rights as it may have against the Book-Entry
System; at the election of the Fund, it shall be entitled to be subrogated for
the Bank in any claim against the Book-Entry System or any other person that the
Bank or its agent may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any loss or damage;
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6.5 Use of a Depository. Provided (i) the Bank has received a
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certified copy of a resolution of the Board specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and remit
to the Bank on behalf of a Fund all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the name
of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made through
the clearing medium employed by such Depository for transactions of participants
acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the securities to or for the account of a Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the Securities to or for the account of
the Fund; and upon any sale of Portfolio Securities, delivery of the Securities
will be made only against payment thereof or, in the event Portfolio Securities
are loaned, delivery of Securities will be made only against receipt of the
initial cash collateral to or for the account of the Fund; and
(d) The Bank shall be liable to a Fund for any loss or damage to
a Fund resulting from use of a Depository by reason of any negligent actions or
inactions of the Bank or its employees or from any failure by the Bank to use
its best efforts to enforce such rights as it may have against a Depository. In
this connection, the Bank shall use its best efforts to ensure that:
(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to the
Bank upon its request;
(ii) Any proxy materials received by a Depository with
respect to Portfolio Securities deposited with such Depository are forwarded
immediately to the Bank for voting in accordance with subsection 6.2 above;
(iii) Such Depository immediately forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to a Fund's account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and duties
hereunder as may be
8
necessary for the a Fund to comply with the recordkeeping requirements of
Section 31(a) of the 1940 Act and Rules 31a-1 and 31a-2 thereunder; and
(v) Such Depository delivers to the Bank and the Company all
internal accounting control reports, whether or not audited by an independent
public accountant, as well as such other reports as the Company may reasonably
request in order to verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
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Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that a Fund has purchased such Issuer's Book-Entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a book-
entry agreement (the "Issuers"). In maintaining its procedures for Book-Entry
Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by a Fund in
an account of the Bank that includes only assets held by it for customers;
(b) The records of the Bank with respect to a Fund's purchase of
Book-Entry Paper through the Bank will identify, by book-entry, commercial paper
belonging to the Fund that is included in the Book-Entry Paper System and shall
at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Company;
(c) The Bank shall pay for Book-Entry Paper purchased for the
account of a Fund upon contemporaneous (i) receipt of advice from the Issuer
that such sale of Book-Entry Paper has been effected, and (ii) the making of an
entry on the records of the Bank to reflect such payment and transfer for the
account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper obligation upon
the maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been transferred to the Fund, and (ii) the making of
an entry on the records of the Bank to reflect such payment for the account of
the Fund;
(e) The Bank shall transmit to the Company a transaction journal
confirming each transaction in Book-Entry Paper for the account of a Fund on the
next business day following the transaction; and
(f) The Bank will send to the Company such reports on its system
of internal accounting control with respect to Book-Entry Paper as the Company
may reasonably request from time to time.
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6.7 Use of Immobilization Programs. Provided (i) the Bank has
------------------------------
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated by
a bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and
(ii) for each year following such approval the Board has reviewed and approved
the arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such bank acting as a sub-custodian hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities that are Eurodollar CDs
--------------
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to a Fund and that the books of the Bank identify the European Branch holding
such Portfolio Securities. Notwithstanding any other provision of this
Agreement to the contrary, except as stated in the first sentence of this
subsection 6.8, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to a Fund, and the Bank shall have no liability to the
Fund or its interestholders with respect to the actions, inactions, whether
negligent or otherwise of such European Branch in connection with such
Eurodollar CDs, except for any loss or damage to the Fund resulting from the
Bank's own negligent actions or inactions or lack of reasonable care in the
performance of its duties hereunder.
6.9 Options and Futures Transactions.
--------------------------------
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or Over-
the Counter.
(i) The Bank shall take action as to put options ("puts") and
call options ("calls") purchased or sold (written) by a Fund regarding escrow or
other arrangements in accordance with the provisions of any agreement entered
into upon receipt of Proper Instructions between the Bank, any broker-dealer
registered under the Exchange Act and a member of the National Association of
Securities Dealers, Inc. (the "NASD"), and, if necessary, the Company, on behalf
of the Fund, relating to the compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange, or of any
similar organization or organizations.
(ii) Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that a Fund has deposited or is
maintaining adequate margin, if required, with any broker in connection with any
option, nor shall the Bank be under duty or obligation to present such option to
the broker for exercise unless it receives Proper Instructions from the Company.
The Bank shall have no responsibility for the legality of any put or call
purchased or sold on behalf of a Fund, the propriety of any such purchase or
sale, or the adequacy of any collateral delivered to a broker in connection with
an option or deposited to or withdrawn from a Segregated Account (as described
in subsection 6.10 below). The Bank specifically, but not by way of limitation,
shall not be under any duty or obligation to: (1) periodically check or notify a
Fund that the amount of such collateral held by a broker or held in
10
a Segregated Account is sufficient to protect such broker or the Fund against
any loss; (2) effect the return of any collateral delivered to a broker; or (3)
advise the Fund that any option it holds, has or is about to expire. Such duties
or obligations shall be the sole responsibility of a Company.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action, upon receipt of Proper
Instructions, as to puts, calls and futures contracts ("futures") purchased or
sold by a Fund in accordance with the provisions of any agreement among the
Company, on behalf of a Fund, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market, or
any similar organization(s), regarding account deposits in connection with
transactions by the Fund .
(ii) The responsibilities and liabilities of the Bank as to
futures, puts and calls traded on commodities exchanges, any Futures Commission
Merchant account and the Segregated Account shall be limited as set forth in
subparagraph (a)(ii) of this subsection 6.9 as if such subparagraph referred to
Futures Commission Merchants rather than brokers, and futures and puts and calls
thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
------------------
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of a Fund, into which Account or Accounts may be transferred upon receipt
of Proper Instructions, cash and/or Portfolio Securities.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account in the following circumstances, upon receipt of Proper
Instructions:
(i) in accordance with the provisions of any agreement among
the Company, on behalf of a Fund, the Bank and a broker-dealer registered under
the Exchange Act and a member of the NASD or any Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Options Clearing Corporation and of any registered national
securities exchange or the Commodity Futures Trading Commission or any
registered Contract Market, or of any similar organizations regarding escrow or
other arrangements in connection with transactions by a Fund;
(ii) for the purpose of segregating cash or Securities in
connection with options purchased or written by a Fund or commodity futures
purchased or written by a Fund;
(iii) for the deposit of liquid assets, such as cash, U.S.
Government obligations or other high-grade debt obligations, having a market
value (marked-to-market on a daily basis) at all times not less than the
aggregate purchase price due on the settlement dates of all of a Fund's then
outstanding forward commitment or "when-issued agreements relating to the
purchase of Portfolio Securities and all of a Fund's then outstanding
commitments under any reverse repurchase agreements entered into with broker-
dealer firms;
11
(iv) for the purposes of compliance by a Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper corporate purposes, but only, in the case
of this clause (v), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the Executive Committee,
signed by an officer of the Company and certified by the Secretary or an
Assistant Secretary, setting forth the purpose(s) of such Segregated Account and
declaring such purpose(s) to be a proper corporate purpose(s).
(b) assets may be withdrawn from the Segregated Account pursuant
to Proper Instructions only:
(i) with respect to assets deposited in accordance with the
provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet a Fund's obligations under
outstanding forward-commitment, delayed-settlement or when-issued agreements for
the purchase of Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that a Fund's outstanding forward-
commitment or when-issued agreements for the purchase of portfolio securities or
any reverse repurchase agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in the
Segregated Account;
(v) for delivery upon settlement of a forward-commitment,
delayed-settlement or when-issued agreement for the sale of Portfolio
Securities: or
(vi) with respect to assets deposited pursuant to (a)(v)
above, in accordance with the purposes of such account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
--------------------------------------
receipt of Proper Instructions relating to the purchase by a Fund of interest-
bearing fixed-term and call deposits, transfer cash, by wire or otherwise, in
such amounts and to such bank(s) as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of a Fund appropriate notation as to the amount of each such deposit, the
banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. Such deposits shall be deemed
Portfolio Securities of a Fund and the responsibility of the
12
Bank therefore shall be the same as and no greater than the Bank's
responsibility in respect of other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange,
----------------------
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section, the Bank will
receive Proper Instructions requesting such transfer, exchange or delivery
stating that it is for a purpose permitted under the terms of this subsection
6.12, specifying the applicable subsection, or describing the purpose of the
transaction with sufficient particularity to permit the Bank to ascertain the
applicable subsection, only:
(a) upon sales of Portfolio Securities for the account of a
Fund, against contemporaneous receipt by the Bank of payment therefor in full,
or against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale of the Portfolio Securities received by the Bank
before such payment is made, as confirmed in the Proper Instructions received by
the Bank before such payment is made;
(b) in exchange for, or upon conversion into, other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided however that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for failure
to so tender in a timely manner unless such Proper Instructions are received by
the Bank at least two business days prior to the date required for tender, and
unless the Bank (or its agent or sub-custodian hereunder) has actual possession
of such Portfolio Security at least two business days prior to the date of
tender
(c) upon conversion of Portfolio Securities pursuant to their
terms into other securities;
(d) for the purpose of redeeming in kind interests of a Fund
upon authorization from the Fund;
(e) in the case of option contracts owned by a Fund, for
presentation to the endorsing broker;
(f) when such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to a Fund by
any bank, including the Bank; provided, however, that such Securities will be
released only upon payment to the Bank for the
13
account of the Fund of the moneys borrowed, except that in cases where
additional collateral is required to secure a borrowing already made, and such
fact is made to appear in the Proper Instructions, further Portfolio Securities
may be released for that purpose without any such payment. In the event that any
such pledged Portfolio Securities are held by the Bank, they will be so held for
the account of the lender, and after notice to the Fund from the lender in
accordance with the normal procedures of the lender, that an event of deficiency
or default on the loan has occurred, the Bank may deliver such pledged Portfolio
Securities to or for the account of the lender,
(h) for the purpose of releasing certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market value
of such security, as set forth in the Proper Instructions received by the Bank
before such payment is made;
(i) for the purpose of delivering Portfolio Securities lent by a Fund
to a bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such Securities
entered into by the Fund;
(j) for other authorized transactions of a Fund or for other proper
corporate purposes; provided that before making such transfer, the Bank will
also receive a certified copy of resolutions of the Board, signed by an
authorized officer of the Company (other than the officer certifying such
resolution) and certified by its Secretary or an Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such Securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 14 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (e), (f), (g), (h) and (i) securities or cash receivable in exchange
therefor shall be delivered to the Bank.
7. Redemptions. In the case of payment of assets of a Fund held by the
-----------
Bank in connection with redemptions and repurchases by the Fund of outstanding
interests, the Bank will rely on notification by the Company's transfer agent of
receipt of a request for redemption before such payment is made. Payment shall
be made in accordance with the Declaration of Trust (the "Declaration") of the
Company, from assets available for said purpose.
8. Merger, Dissolution. etc. of the Company or a Fund. In the case of the
--------------------------------------------------
following transactions, not in the ordinary course of business, namely, the
merger of a Fund into or the consolidation of the Company with another
investment company, the sale by the Company of all, or substantially all, of the
assets of one or more Funds to another investment company, or the liquidation or
dissolution of a Fund and distribution of its assets, the Bank will deliver the
Portfolio Securities held by it under this Agreement and disburse cash only upon
the order of the
14
Company, on behalf of such Fund(s) set forth in an Officer's Certificate,
accompanied by a certified copy of a resolution of the Board authorizing any of
the foregoing transactions. Upon completion of such delivery and disbursement
and the payment of the fees, disbursements and expenses of the Bank, this
Agreement will terminate with respect to such Fund or Company, as applicable.
9. Actions of the Bank Without Prior Authorization. Notwithstanding
-----------------------------------------------
anything herein to the contrary, unless and until the Bank receives an Officer's
Certificate to the contrary, it will without prior authorization or instruction
of the Company or the transfer agent:
(a) Endorse for collection and collect on behalf of and in the name
of a Fund all checks, drafts, or other negotiable or transferable instruments or
other orders for the payment of money received by it for the account of the Fund
and hold for the account of the Fund all income, dividends, interest and other
payments or distributions of cash with respect to the Portfolio Securities held
thereunder;
(b) Present for payment all coupons and other income items held by it
for the account of a Fund that call for payment upon presentation and hold the
cash received by it upon such payment for the account of the Fund;
(c) Receive and hold for the account of a Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
(d) execute as agent on behalf of a Fund all necessary ownership and
other certificates and affidavits required by the Internal Revenue Code or the
regulations of the Treasury Department issued thereunder, or by the laws of any
state, now or hereafter in effect, inserting a Fund's name on such certificates
as the owner of the securities covered thereby, to the extent it may lawfully do
so and as may be required to obtain payment in respect thereof. The Bank will
execute and deliver such certificates in connection with Portfolio Securities
delivered to it or by it under this Agreement as may be required under the
provisions of the Internal Revenue Code and any Regulations of the Treasury
Department issued thereunder, or under the laws of any State;
(e) present for payment all Portfolio Securities that are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of a Fund; and
(f) exchange interim receipts or temporary securities for
definitive securities.
10. Collections and Defaults. The Bank will use all reasonable efforts to
------------------------
collect any funds that may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Company, on behalf of a Fund, notice actually received by the
Bank of any call for redemption, offer of exchange, right of subscription,
reorganization or other proceedings affecting such Portfolio Securities. If
Portfolio Securities
15
upon which such income is payable are in default or payment is refused after due
demand or presentation, the Bank will notify the Company, on behalf of a Fund,
in writing of any default or refusal to pay within two business days from the
day on which it receives knowledge of such default or refusal. In addition, the
Bank will send the Company a written report once each month showing any income
on any Portfolio Security held by Bank on behalf of a Fund that is more than ten
days overdue on the date of such report.
11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terms and conditions of this Agreement, and in compliance with
the applicable rules and regulations of the 1940 Act and will furnish the
Company daily with a statement of condition of each Fund. The Bank will furnish
to the Company at the end of every month, and at the close of each quarter of
the Company's fiscal year, a list of the Portfolio Securities and the aggregate
amount of cash held the by Bank on behalf of each Fund. The books and records
of the Bank pertaining to its actions under this Agreement and reports by the
Bank or its independent accountants concerning its accounting system, procedures
for safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors employed by
the Company and will be preserved by the Bank in the manner and in accordance
with the applicable rules and regulations under the 1940 Act.
The Bank shall perform the fund accounting services listed on Schedule
C hereto and shall keep the books of account and render statements or copies
from time to time as reasonably requested by the Treasurer or any executive
officer of the Company.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Fund Evaluation and Performance Calculations.
--------------------------------------------
12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
---------------
directed by the Board, determine as of the close of regular trading on the New
York Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by the
Board, the net asset value and the offering price of an interest of each Fund,
such determination to be made in accordance with the provisions of the
Declaration and Registration Statement of the Company relating to the Funds, as
it may from time to time be amended, and any applicable resolutions of the Board
at the time in force and applicable; and promptly to notify the Company, any
applicable exchange, the NASD or such other persons as the Company may request
of the results of such computation and determination. In computing the net
asset value hereunder, the Bank may rely in good faith upon information that the
Bank reasonably believes to be accurate and reliable furnished to it by any
Authorized Person in respect of (i) the manner of accrual of the liabilities of
each Fund and in respect of liabilities of a Fund not appearing on its books of
account kept by the Bank, (ii) reserves, if any, authorized by the Board or that
no such reserves have been authorized, (iii) the source of the quotations to be
used in computing the net asset value, (iv) the value to be assigned to any
security for which no price quotations are available, and (v) the method of
computation of the
16
offering price on the basis of the net asset value of the interests, and the
Bank shall not be responsible for any loss occasioned by its reasonable and good
faith reliance on any quotations received from a source pursuant to (iii) above.
12.2. Performance Calculations. The Bank will compute the performance
------------------------
results of each Fund (the "Performance Calculations") in accordance with
applicable provisions of the 1933 Act and 1940 Act and the rules under such Acts
related to the computations to be undertaken by the Bank pursuant to this
Agreement, as promulgated by the Securities and Exchange Commission, as such
provisions and or rules may be amended from time to time, and any published
interpretations of or general conventions accepted by the staff of the
Securities and Exchange Commission with respect to such rules or the subject
matter thereof ("Subsequent Staff Positions"), subject to the Registration
Statement, as amended from time to time, and the terms set forth below:
(a) The Bank shall compute the Performance Calculations for
each Fund for the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the Company.
(b) In performing the Performance Calculations, the Bank will
derive from the records it generates and maintains for each Fund pursuant
Section 11 hereof, the data necessary for the computation. The Bank shall have
no responsibility to review, confirm, or otherwise assume any duty or liability
with respect to the accuracy or correctness of any such data supplied to it by
the Company, any of the its designated agents or any of its designated third-
party providers.
(c) At the request of the Bank, the Company shall provide, and
the Bank shall be entitled to rely on, written standards and guidelines to be
followed by the Bank in interpreting and applying the computation methods
pursuant to the rules or any Subsequent Staff Positions as they specifically
apply to a Fund, provided that the Bank shall be responsible for general
knowledge of such rules and any Subsequent Staff Positions. In the event that
the computation methods in a rule or the Subsequent Staff Positions or the
application to a Fund of a standard or guideline is not free from doubt or in
the event there is any question of interpretation as to the characterization of
a particular security or any aspect of a security or a payment with respect
thereto (e.g., original issue discount, participating debt security, income or
return of capital, etc.) or otherwise or as to any other element of the
computation that is pertinent to the Fund, the Company or its designated agent,
BGFA, shall have the full responsibility for making the determination of how the
security, or payment, is to be treated for purposes of the computation and how
the computation is to be made and shall inform the Bank thereof on a timely
basis. The Bank shall have no responsibility to make independent determinations
with respect to any item that is covered by this Section, and the Bank shall not
be responsible for its computations made in accordance with such determinations
so long as such computations are mathematically correct.
(d) The Company shall keep the Bank informed of all publicly
available information, and of any non-public advice or information, obtained by
the Company from its independent auditors
17
or by its personnel or the personnel of its investment adviser, related to the
computations to be undertaken by the Bank pursuant to this Agreement, and the
Bank shall not be deemed to have knowledge of such information (except as
contained in the Registration Statement) unless it has been furnished to the
Bank in writing; provided that the Bank shall be charged with knowledge of any
material changes to the 1933 Act, the 1940 Act, and any related rules under such
acts related to the computations to be undertaken by the Bank pursuant to this
Agreement without specific notice from the Company.
13. Concerning the Bank.
-------------------
13.1 Bank Warranty. The Bank warrants that it has and will maintain
-------------
at least the minimum qualifications required by Section 17(f)(1) of the 1940 Act
to act as custodian of the Portfolio Securities and other assets including cash
of the Company's Funds.
13.2 Standard of Care and Performance of Duties.
------------------------------------------
(a) The Bank agrees to use reasonable care with regard to its
obligations under this Agreement and the safekeeping of property of the Funds.
In performing its duties hereunder and any other duties listed on the Schedules
hereto, the Bank will be entitled to receive and act upon the advice of
independent counsel of its own selection, which may be counsel for the Company,
and the Bank will be without liability for any action taken or thing done, or
omitted to be done, so long as the Bank's actions or inactions are without
negligence and in accordance with this Agreement in good faith in conformity
with such advice. The Bank shall be liable to, and shall indemnify and hold
harmless the Company from and against any loss which shall occur as the result
of the failure of the Bank or a sub-custodian (other than a foreign securities
depository or clearing agency and except as provided in subsections 6.8, 13.2
and 13.3(i) hereof) to exercise reasonable care with respect to their respective
obligations under this Agreement and the safekeeping of such property. Subject
to the foregoing, the Bank will not be responsible for any act, omission,
default or for the solvency of any foreign securities depository or clearing
agency utilized in connection with the provision of services under this
Agreement.
(b) In the performance of its duties hereunder, the Bank will
be protected and not be liable, and will be indemnified and held harmless for
any action taken or omitted to be taken by it with reasonable care and in good
faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, facsimile, telegram, notice,
request, certificate or other instrument reasonably believed by the Bank to be
genuine and for any other loss to the Fund except in the case of its negligent
actions or inactions or lack of good faith or reasonable care in the performance
of its obligations or duties hereunder.
(c) The Bank will be under no duty or obligation to inquire
into and will not be liable for:
(i) the validity of the issue of any Portfolio Securities
purchased by or for a Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;
18
(ii) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are sold;
(iii) the legality of an issue or sale of any interests of a
Fund or the sufficiency of the amount to be received therefor;
(iv) the legality of the repurchase of any interests of a Fund
or the propriety of the amount to be paid therefor;
(v) the legality of the declaration of any dividend by a Fund
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; and
(vi) any property or moneys of a Fund unless and until received
by it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.
(d) Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of a Fund are such as may properly be held by the Fund under
the provisions of the Company's Declaration, any federal or state statutes or
any rule or regulation of any governmental agency.
(e) Notwithstanding anything in this Agreement to the contrary, in no
event shall the Bank be liable hereunder or to any third party:
(i) for any losses or damages of any kind resulting from acts of
God, earthquakes, fires, floods, storms or other disturbances of nature,
epidemics, strikes, riots, nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, nuclear fusion,
fission or radiation, the interruption, loss or malfunction of utilities,
transportation, or computers (hardware or software) and computer facilities, the
unavailability of energy sources and other similar happenings or events, except
as results from the Bank's own negligence, provided that the Bank shall make all
reasonable efforts, whenever necessary, to use data processing back-up
facilities provided by Electronic Data Systems, Inc.; or
(ii) for special, punitive or consequential damages arising from
the provision of services hereunder, even if the Bank has been advised of the
possibility of such damages; provided, however, that the parties specifically
acknowledge and agree that damages, if any, incurred by the Company, its Funds
or its agents (including, but not limited to, BGFA or the Company's transfer or
shareholder servicing agents) on account of late or incorrect net asset values
and related information provided to the Company, its Funds, its agents or other
third parties as may be agreed in writing by Xxxxxxxx Inc. ("Xxxxxxxx") and IBT
from time to time, are not to be considered special, punitive or consequential
damages for purposes of this subsection 13.2(e)(ii).
(f) The Bank shall supply Xxxxxxxx with such daily information
regarding the cash and securities positions and activity of each Fund as the
Bank and Xxxxxxxx shall from time to time agree.
19
(g) The Bank need not maintain any insurance for the exclusive
benefit of the Company, but hereby warrants that as of the date of this
Agreement it is maintaining a bankers Blanket Bond and hereby agrees to notify
the Company in the event that such bond is canceled or otherwise lapses.
13.3 Agents and Sub-custodians with Respect to Property of the Funds
---------------------------------------------------------------
Held in the United States. The Bank may employ agents in the performance of its
-------------------------
duties hereunder and shall be responsible for the acts and omissions of such
agents as if performed by the Bank hereunder. Without limiting the foregoing,
certain duties of the Bank hereunder may be performed by one or more affiliates
of the Bank.
Upon receipt of Proper Instructions, the Bank may employ sub-custodians,
provided that any such sub-custodian meets at least the minimum qualifications
required by Section 17(f)(1) of the 1940 Act to act as a custodian of a Fund's
assets with respect to property of the Fund held in the United States. The Bank
shall have no liability to the Company or any other person by reason of any act
or omission of any sub-custodian and the Company shall indemnify the Bank and
hold it harmless from and against any and all actions, suits and claims, arising
directly or indirectly out of the performance of any sub-custodian. Upon
request of the Bank, the Company shall assume the entire defense of any action,
suit, or claim subject to the foregoing indemnity. All fees and expenses of any
sub-custodian shall be paid in accordance with Schedule B hereto.
13.4 Duties of the Bank with Respect to Property of the Fund Held
------------------------------------------------------------
Outside of the United States.
----------------------------
(a) Appointment of Foreign Sub-custodians. The Company hereby
-------------------------------------
authorizes and instructs the Bank to employ as sub-custodians for the Company's
Portfolio Securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated by
the Board (each, a "Selected Foreign Sub-custodian"). Upon receipt of Proper
Instructions, together with a certified resolution of the Company's Board, the
Bank and the Company may agree to designate additional foreign banking
institutions and foreign securities depositories to act as Selected Foreign Sub-
custodians hereunder. Upon receipt of Proper Instructions, the Company may
instruct the Bank to cease the employment of any one or more such Selected
Foreign Sub-custodians for maintaining custody of a Fund's assets, and the Bank
shall so cease to employ such sub-custodian as soon as alternate custodial
arrangements have been implemented.
(b) Foreign Securities Depositories. Except as may otherwise be
-------------------------------
agreed upon in writing by the Bank and the Company, assets of a Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as Selected Foreign Sub-
custodians pursuant to the terms hereof. Where possible, such arrangements
shall include entry into agreements containing the provisions set forth in
subparagraph (d) hereof. Notwithstanding the foregoing, except as may otherwise
be agreed upon in writing by the Bank and the Company, the Company authorizes
the deposit in Euro-Clear, the securities clearance and depository facilities
operated by Xxxxxx Guaranty Trust Company of New York in Brussels, Belgium, of
Foreign Securities eligible for deposit therein
20
and to utilize such securities depository in connection with settlements of
purchases and sales of securities and deliveries and returns of securities,
until notified to the contrary pursuant to subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on its books
-------------------------
as belonging to a Fund the Foreign Securities held by each Selected Foreign Sub-
custodian. Each agreement pursuant to which the Bank employs a foreign banking
institution shall require that such institution establish a custody account for
the Bank and hold in that account, Foreign Securities and other assets of the
Funds, and, in the event that such institution deposits Foreign Securities in a
foreign securities depository, that it shall identify on its books as belonging
to the Bank the securities so deposited.
(d) Agreements with Foreign Banking Institutions. Each of the
--------------------------------------------
agreements pursuant to which a foreign banking institution holds assets of the
Company's Funds (each, a "Foreign Sub-custodian Agreement") shall be
substantially in the form previously made available to the Company and shall
provide that: (a) such assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking institution
or its creditors or agent, except a claim of payment for their safe custody or
administration (including, without limitation, any fees or taxes payable upon
transfers or reregistration of securities); (b) beneficial ownership of such
assets will be freely transferable without the payment of money or value other
than for custody or administration (including, without limitation, any fees or
taxes payable upon transfers or reregistration of securities); (c) adequate
records will be maintained identifying the assets as belonging to the Bank; (d)
officers of or auditors employed by, or other representatives of the Bank,
including to the extent permitted under applicable law, the independent auditors
for the Company, will be given access to the books and records of the foreign
banking institution relating to its actions under its agreement with the Bank;
and (e) assets of a Fund held by the Selected Foreign Sub-custodian will be
subject only to the instructions of the Bank or its agents.
(e) Access of Independent Auditors of the Company. Upon request of
---------------------------------------------
the Company, the Bank will use its best efforts to arrange for the Company's
independent auditors to be afforded access to the books and records of any
foreign banking institution employed as a Selected Foreign Sub-custodian insofar
as such books and records relate to the performance of such foreign banking
institution under its Foreign Sub-custodian Agreement.
(f) Reports by the Bank. The Bank will supply to the Company from
-------------------
time to time, as mutually agreed upon, statements in respect of the securities
and other assets of a Fund held by Selected Foreign Sub-custodians, including
but not limited to an identification of entities having possession of the
Foreign Portfolio Securities and other assets of the Fund.
(g) Transactions in Foreign Custody Accounts. Transactions with
----------------------------------------
respect to the assets of a Fund held by a Selected Foreign Sub-custodian shall
be effected pursuant to Proper Instructions from the Company to the Bank and
shall be effected in accordance with the applicable Foreign Sub-custodian
Agreement. If at any time any Foreign Portfolio Securities shall be registered
in the name of the nominee of the Selected Foreign Sub-custodian, the
21
Company agrees to hold any such nominee harmless from any liability by reason of
the registration of such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary, settlement
and payment for Foreign Securities received for the account of a Fund and
delivery of Foreign Securities maintained for the account of a Fund may be
effected in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
In connection with any action to be taken with respect to the Foreign
Securities held hereunder, including, without limitation, the exercise of any
voting rights, subscription rights, redemption rights, exchange rights,
conversion rights or tender rights, or any other action in connection with any
other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Company or
its investment adviser such information in connection therewith as is made
available to the Bank by the Foreign Sub-custodian, and the Bank shall promptly
forward to the applicable Foreign Sub-custodian any instructions, forms or
certifications with respect to such Rights, and any instructions relating to the
actions to be taken in connection therewith, as the Bank shall receive pursuant
to Proper Instructions. The Bank agrees to use its best efforts to obtain and
forward to the Company or its designated agent, BGFA, information regarding
Rights with respect to Foreign Securities held hereunder. Notwithstanding the
foregoing, the Bank shall have no further duty or obligation with respect to
such Rights, including, without limitation, the determination of whether a Fund
is entitled to participate in such Rights under applicable U.S. and foreign
laws, or the determination of whether any action proposed to be taken with
respect to such Rights by the Fund or by the applicable Foreign Sub-custodian
will comply with all applicable terms and conditions of any such Rights or any
applicable laws or regulations, or market practices within the market in which
such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-custodians. Each Foreign Sub-
--------------------------------------------
custodian Agreement with a foreign banking institution shall require the
institution to exercise reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Bank and Company from and against certain
losses, damages, costs, expenses, liabilities or claims arising out of or in
connection with the institution's performance of such obligations, all as set
forth in the applicable Foreign Sub-custodian Agreement. The Company
acknowledges that the Bank, as a participant in Euroclear, is subject to the
Terms and Conditions Governing the Euroclear System, a copy of which has been
made available to the Company. The Company acknowledges that pursuant to such
Terms and Conditions, Xxxxxx Guaranty Brussels shall have the sole right to
exercise or assert any and all rights or claims in respect of actions or
omissions of, or the bankruptcy or insolvency of, any other depository,
clearance system or custodian utilized by Euroclear in connection with a Fund's
Portfolio Securities and other assets.
22
(i) Liability of Bank. The Bank shall have no more or less
-----------------
responsibility or liability on account of the acts or omissions of any Selected
Foreign Sub-custodian employed hereunder than any such Selected Foreign Sub-
custodian has to the Bank and, without limiting the foregoing, the Bank shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or acts of war or
terrorism, political risk (including, but not limited to, exchange control
restrictions, confiscation, insurrection, civil strife or armed hostilities)
other losses due to Acts of God, nuclear incident or any loss where the Selected
Foreign Sub-custodian has otherwise exercised reasonable care.
(j) Monitoring Responsibilities. The Bank shall furnish
---------------------------
annually to the Company, information concerning the Selected Foreign Sub-
custodians employed hereunder for use by the Company's Board or its designated
agent in evaluating such Selected Foreign Sub-custodians to ensure compliance
with the requirements of Rule 17f-5 of the 1940 Act. In addition, the Bank will
promptly inform the Company in the event that the Bank is notified by a Selected
Foreign Sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below $200
million (in each case computed in accordance with generally accepted U.S.
accounting principles) or any other capital adequacy test applicable to it by
exemptive order, or if the Bank has actual knowledge of any material loss of the
assets of a Fund held by a Foreign Sub-custodian.
(k) Tax Law. The Bank shall have no liability for any
-------
obligations now or hereafter imposed on the Trust, or its Funds, or the Bank as
custodian of the Trust by the tax laws of any jurisdiction. The sole
responsibility of the Bank with regard to such taxes shall be to use reasonable
efforts to assist the Company with respect to the withholding and payment by the
Company of such taxes and with respect to any claim for exemption or refund
under the tax law of jurisdictions for which the Company is entitled to such
exemptions or refunds.
13.5 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Company's Funds held by it
as it uses in respect of its own similar property but need not maintain any
special insurance for the benefit of the Company.
13.6. Fees and Expenses of Bank. The Company, on behalf of a Fund,
-------------------------
will pay or reimburse the Bank from time to time for any transfer taxes payable
upon transfer of Portfolio Securities made hereunder. All necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement (including any duties listed on Schedule C hereto)
including any indemnities for any loss, liabilities or expense to the Bank as
provided above shall be paid in accordance with Schedule B hereto, provided that
the Bank shall not be entitled to compensation and/or reimbursement for services
and/or expenses and liabilities by the Company, with respect to the Funds,
hereunder so long as the Bank is entitled to receive compensation and
reimbursements from Xxxxxxxx for providing sub-administration services to the
Company on behalf of the Funds. If the Bank no longer is entitled to receive
such compensation and reimbursements from Xxxxxxxx, the Bank shall be entitled
hereunder to such compensation or fees and reimbursements at such rate and at
such times as it may from time to time negotiate with the Company, and such
Schedule B shall be amended accordingly.
23
13.7 Advances by Bank. The Bank may, in its sole discretion, advance
----------------
funds on behalf of a Fund to make any payment permitted by this Agreement upon
receipt of any proper authorization required by this Agreement for such
payments. Should such a payment or payments, with advanced funds, result in an
overdraft (due to insufficiencies of a Fund's account with the Bank, or for any
other reason) this Agreement deems any such overdraft or related indebtedness, a
loan made by the Bank to the Fund payable on demand and bearing interest at the
current rate charged by the Bank for such loans unless the Fund shall provide
the Bank with agreed upon compensating balances. The Company agrees that the
Bank shall have a continuing lien and security interest to the extent of any
overdraft or indebtedness, in and to any property at any time held by it for a
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Company authorizes the Bank, in its sole
discretion, at any time to charge any overdraft or indebtedness, together with
interest due thereon against any balance of account standing to the credit of a
Fund on the Bank's books.
14. Termination.
-----------
(a) This Agreement shall be effective for an initial term of
two (2) years commencing upon the date hereof (the "Initial Term") unless
earlier terminated as provided in subsection (b) below. Thereafter, the
Agreement may be terminated at any time, without penalty upon sixty (60) days'
written notice delivered by either party to the other by means of registered
mail, and upon the expiration of such sixty (60) days, this Agreement will
terminate; provided, however, that the effective date of such termination may be
postponed to a date not more than ninety (90) days from the date of delivery of
such notice (i) by the Bank in order to prepare for the transfer by the Bank of
all of the assets of the Funds held hereunder, or (ii) by the Company in order
to give it an opportunity to make suitable arrangements for a successor
custodian. At any time after the termination of this Agreement, the Bank agrees
to make available to the Company, at its request, the records maintained by the
Bank relating to the performance of its duties as custodian and to preserve such
records for the periods prescribed in Rule 31a-2 under the 1940 Act.
(b) Notwithstanding subsection (a) above, either party hereto
may terminate this Agreement at any time prior to the expiration of the Initial
Term in the event that the other party violates any material provision of this
Agreement, provided that the violating party does not cure such violation within
ninety (90) days of receipt of written notice from the non -violating party of
such violation.
(c) Notwithstanding subsection (a) above, the Company may
terminate this Agreement at any time prior to the expiration of the Initial Term
in the event that (i) the Board of Directors determines that the performance of
the Bank does not meet the reasonable satisfaction (considered in light of
industry standards) of the Board, provided that the Bank does not cure such
unsatisfactory performance within ninety (90) days of receipt of written notice
specifying such unsatisfactory performance; or (ii) if the Bank becomes the
subject of any state or federal bankruptcy proceeding that is not dismissed
within sixty (60) days of the initiation of such proceeding.
24
(d) In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Company. The obligation of the Bank to deliver and transfer over the assets of
the Company's Funds held by the Bank directly to such successor custodian will
commence as soon as such successor is appointed and will continue until
completed as aforesaid. If the Company does not select a successor custodian
within ninety (90) days from the date of delivery of notice of termination the
Bank may, subject to the provisions of subsection 14(c), deliver the Portfolio
Securities and cash of the Company's Fund held by the Bank to a bank or trust
company of its own selection that meets the requirements of Section 17(f)(1) of
the 1940 Act and has a reported capital, surplus and undivided profits
aggregating not less than $2,000,000, to be held as the property of the
Company's Funds under terms similar to those on which they were held by the
Bank, whereupon such bank or trust company so selected by the Bank will become
the successor custodian of such assets of the Company's Funds with the same
effect as though selected by the Board.
(e) Prior to the expiration of ninety (90) days after notice of
termination has been given, the Company may furnish the Bank with an order of
the Company advising that a successor custodian cannot be found willing and able
to act upon reasonable and customary terms and that there has been submitted to
the Fund's interestholders the question of whether a Fund will be liquidated or
will function without a custodian for the assets of the Fund. In that event the
Bank will deliver the Portfolio Securities and cash of the Company's Funds,
subject as aforesaid, in accordance with one of such alternatives that may be
approved by the requisite vote of shareholders, upon receipt by the Bank of a
copy of the minutes of the meeting of shareholders at which action was taken,
certified by the Company's Secretary and an opinion of counsel to the Company in
form and content satisfactory to the Bank.
15. Confidentiality. Both parties hereto agree than any non-public
---------------
information obtained hereunder concerning the other party is confidential and
may not be disclosed to any other person without the consent of the other party,
except as may be required by applicable law or at the request of a governmental
agency. The parties further agree that a breach of this provision would
irreparably damage the other party and accordingly agree that each of them is
entitled, in addition to all other remedies at law or in equity and without bond
or other security, to an injunction or injunctions to prevent breaches of this
provision.
16. Notices. Any notice or other instrument in writing authorized or
-------
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered, via registered U.S.
Mail or facsimile with written confirmation via registered U.S. Mail, to it at
its office at the address set forth below; namely:
(a) In the case of notices sent to the Company or a Fund to:
Stagecoach Trust
000 Xxxxxx Xxxxxx
00
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
With a copy to:
C. Xxxxx Xxxxxxx, Esq.
Xxxxx Fargo Bank, N.A.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
With a copy to: Xxxx X. Xxxxx, Esq.
or at such other place as such party may from time to time designate in
writing.
17. Amendments. This Agreement may not be altered or amended, except by
----------
an instrument in writing, executed by both parties, and in the case of the
Company, such alteration or amendment will be authorized and approved by its
Board.
18. Parties. This Agreement will be binding upon and shall inure to the
-------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Company
without the written consent of the Bank or by the Bank without the written
consent of the Company, authorized and approved by its Board; and provided
further that termination proceedings pursuant to Section 14 hereof will not be
deemed to be an assignment within the meaning of this provision.
19. Governing Law. This Agreement and all performance hereunder will be
-------------
governed by the laws of the Commonwealth of Massachusetts.
20. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
21. Limitation of Liability. The Company and the Bank agree that the
-----------------------
Company's obligations under this Agreement shall not be binding upon any
Trustee, interestholder, officer, employee or agent of the Company individually
but are binding only upon the assets and property of the appropriate Fund.
26
22. Single Agreement. This Agreement (including any exhibits, appendices
----------------
and schedules hereto) constitutes the entire agreement between the Bank and the
Company as to the subject matter hereof and supersedes any and all agreements,
representations and warranties, written or oral, regarding such subject matter
made prior to the time at which this Agreement has been executed and delivered
between the Bank and the Company.
23. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
Stagecoach Trust
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Chief Operating Officer
Investors Bank & Trust Company
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
27
SCHEDULE A
----------
CUSTODY AGREEMENT
STAGECOACH TRUST
List of Funds /1/
-------------
LifePath 2000 Fund
LifePath 2010 Fund
LifePath 2020 Fund
LifePath 2030 Fund
LifePath 2040 Fund
Dated : October 21, 1996
------------
/1/ Does not include existing Institutional Class of each Fund.
A-1
28
SCHEDULE B
----------
FEE SCHEDULE
Fund Accounting and Calculation of N.A.V.
-----------------------------------------
The following annual fee will be charged for each feeder for which IBT acts
as fund accountant:
Annual Fee
----------
Per Feeder Annual Charge $12,000
Per Class Annual Charge (applies only to any new classes
beyond the original five classes) $ 4,500
Miscellaneous
--------------
A. Out-of-Pocket
These charges consist of:
- External printing, delivery and postage costs
- Extraordinary travel expenses
- InvestView (only if requested by the Administrator)
- Any future legal expenses associated with substantially altering IBT's
standard contracts
- Customized systems development; customized reporting; and customized
extracts
B. Payment
The above fees will be charged against the feeder's account five business
days after the invoice is mailed.
C. Systems
The details of any systems work will be determined after a thorough business
analysis. Systems work will not be performed until approved by the
Administrator. Systems work will be billed on a time and material basis.
B-1
29
Schedule C
----------
CUSTODY AGREEMENT
STAGECOACH TRUST
Fund Accounting Duties
----------------------
I. A. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash and
all other debits and credits, as required by subsection (b)(1) of rule 31a-1
under the 1940 Act (the "Rule");
B. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest accrued and
interest received, as required by subsection (b)(2)(i) of the Rule;
C. Separate ledger accounts required by subsection (b) (2) (ii) and
(iii) of the Rule; and
D. A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule.
II. All such books and records shall be the property of the Company, and
IBT agrees to make such books and records available for inspection by the
Company or by the Securities and Exchange Commission at reasonable times and
otherwise to keep confidential all records and other information relative to the
Company; except when requested to divulge such information by duly constituted
authorities or court process, or when requested by the Company.
III. In addition to the maintenance of the books and records specified
above, IBT shall perform the following accounting services daily for each Fund;
A. Calculate the net asset value per interest;
B. Calculate changes in net asset value;
C-1
30
C. Calculate the per share dividend distribution rates:
D. Calculate dividends and any capital-gain distributions;
E. Calculate yield;
F. Provide the following reports:
1. a current security position report;
2. a summary report of transactions and pending maturities; and
3. a current cash position report;
G. Such other similar services with respect to a Fund as may be
reasonably requested by the Company.
IV. IBT shall forward the information contained in Section III of this
Schedule to third-party service providers reasonably requested by the Company,
the Company's Administrator or BGFA.
C-2
31
