CUSTODIAN AGREEMENT
AGREEMENT made as of this 25th day of June, 2007, among Green Century Funds,
a Massachusetts business trust (the "Trust") which consists of separate
portfolios of shares set forth on Exhibit A attached hereto, Green Century
Capital Management, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts ("GCCM"), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company (the "Bank").
The Trust, an open-end management investment company on behalf of the
portfolios listed on Appendix A hereto (as such Appendix A may be amended from
time to time) (each a "Portfolio" and collectively, the "Portfolios"), desires
to place and maintain all of its portfolio securities and cash in the custody
of the Bank. The Bank has at least the minimum qualifications required by
Section 17(f)(1) of the Investment Company Act of 1940 (the "1940 Act") to act
as custodian of the portfolio securities and cash of the Trust, and has
indicated its willingness to so act, subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Trust hereby appoints the Bank as custodian
of its portfolio securities and cash delivered to the Bank as hereinafter
described and the Bank agrees to act as such upon the terms and conditions
hereinafter set forth. For the services rendered pursuant to this Agreement
GCCM agrees to pay to the Bank fees as listed on Appendix D hereto (as such
Appendix D may be amended from time to time although no earlier than the
conclusion of the "Initial Term" or subsequent a "Renewal Term" as defined in
Section 16 of this Agreement) and upon the agreement of the Trust, GCCM and the
Bank.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of the Trust
or one of the Trust's Portfolios as designated by an Officer of the Trust by
appropriate resolution of its Board, and set forth in a certificate as required
by Section 4 hereof.
2.2 Board. Board will mean the Board of Trustees of the Trust.
2.3 Book-Entry Paper. Book-Entry Paper shall mean any commercial paper held
by the Bank in book-entry form.
2.4 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.5 Depository. Depository shall mean The Depository Trust Company ("DTC"),
a clearing agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934 ("Exchange Act"), its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository
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under the 1940 Act, its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of the Board.
2.6 Issuers. Issuers shall mean any entity which issues commercial paper
with whom the Bank has entered into a book-entry agreement.
2.7 Officers' Certificate. Officers' Certificate will mean, unless otherwise
indicated, any request, direction, instruction, or certification in writing
signed by any Officer of the Trust.
2.8 Portfolio Security. Portfolio Security will mean any security owned by
the Trust.
2.9 Proper Instructions. Proper Instructions shall mean (i) 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 Trust
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 Trust shall cause all oral instructions to be promptly confirmed in
writing. The Bank shall act upon and comply with any subsequent Proper
Instruction which modifies a prior instruction and the sole obligation of the
Bank with respect to any follow-up or confirming instruction shall be to make
reasonable efforts to detect any discrepancy between the original instruction
and such confirmation and to report such discrepancy to the Trust. The Trust
shall be responsible, at GCCM's expense, for taking any action, including any
reprocessing, necessary to correct any such discrepancy or error, and to the
extent such action requires the Bank to act, the Trust shall give the Bank
specific Proper Instructions as to the action required. Upon receipt by the
Bank of an Officers' Certificate as to the authorization by the Board
accompanied by a detailed description of procedures approved by the Trust,
Proper Instructions may include communication effected directly between
electro-mechanical or electronic devices provided that the Board and the Bank
agree in writing that such procedures afford adequate safeguards for the
Trust's assets.
2.10 Security. The term security as used herein will have the same meaning
assigned to such term in the Securities Act of 1933, as amended, including,
without limitation, any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any profit sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas, or other mineral rights, any put, call, straddle, option,
or privilege on any security, certificate of deposit, or group or index of
securities (including any interest therein or based on the value thereof), or
any put, call, straddle, option, or privilege entered into on a national
securities exchange relating to a foreign currency, or, in general, any
interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to, or option contract to
purchase or sell any of the foregoing, and futures, forward contracts and
options thereon.
3. Separate Accounts. If the Trust has more than one series or portfolio,
the Bank will segregate the assets of each series or portfolio to which this
Agreement relates into a separate account for each such series or portfolio
containing the assets of such series or portfolio (and all investment earnings
thereon). Unless the context otherwise requires, any reference in this
Agreement to any actions to be taken by the Trust shall be deemed to refer to
the Trust acting on behalf of one or more of its series, any reference in this
Agreement to any assets of the Trust, including, without limitation, any
portfolio securities and cash and earnings thereon, shall be deemed to refer
only to assets of the applicable
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Portfolio, any duty or obligation of the Bank hereunder to the Trust shall be
deemed to refer to duties and obligations with respect to such individual
series and any obligation or liability of the Trust hereunder shall be binding
only with respect to such individual Portfolio, and shall be discharged only
out of the assets of such Portfolio.
4. Certification as to Authorized Persons. An Officer of the Trust will at
all times maintain on file with the Bank his or her certification to the Bank,
in such form as may be acceptable to the Bank, of (i) the names and signatures
of the Authorized Persons and (ii) the names of the members of the Board, it
being understood that upon the occurrence of any change in the information set
forth in the most recent certification on file (including without limitation
any person named in the most recent certification who is no longer an
Authorized Person as designated therein), an Officer of the Trust will sign a
new or amended certification setting forth the change and the new, additional
or omitted names or signatures. The Bank will be entitled to rely and act upon
any Officers' Certificate given to it by the Trust which has been signed by an
Officer named in the most recent certification received by the Bank.
5. Custody of Cash. As custodian for the Trust, the Bank will open and
maintain a separate account or accounts in the name of the Trust or in the name
of the Bank, as Custodian of the Trust, and will deposit to the account of the
Trust all of the cash of the Trust, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Trust into a separate savings deposit
account upon which the Bank reserves the right to require seven (7) days notice
prior to withdrawal of cash from such an account. Upon receipt by the Bank of
Proper Instructions (which may be continuing instructions) or in the case of
payments for redemptions and repurchases of outstanding shares of common stock
of the Trust, notification from the Trust's transfer agent as provided in
Section 7, requesting such payment, designating the payee or the account or
accounts to which the Bank will release funds for deposit, and stating that it
is for a purpose permitted under the terms of this Section 5, specifying the
applicable subsection, the Bank will make payments of cash held for the
accounts of the Trust, insofar as funds are available for that purpose, only as
permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for the Trust,
against contemporaneous receipt of such securities by the Bank or against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Trust or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each payment to be made at the purchase price shown on a
broker's confirmation (or transaction report in the case of Book Entry Paper
(as that term is defined in Section 6.6 hereof)) of purchase of the securities
received by the Bank before such payment is made, as confirmed in the Proper
Instructions received by the Bank before such payment is made.
5.2 Redemptions. In such amount as may be necessary for the repurchase or
redemption of common shares of the Trust offered for repurchase or redemption
in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of the Trust. For the payment on the account
of the Trust of dividends or other distributions to shareholders as may from
time to time be declared by the Board, interest, taxes, brokerage costs and
other capital expenses, management or supervisory fees, distribution fees, or
extraordinary expenses of the Trust.
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5.4 Payment in Respect of Securities. For payments in connection with the
conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Trust held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans, if any, of money made to the Trust,
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash, if any, delivered to the Trust for
the purpose of collateralizing the obligation to return to the Trust
certificates borrowed from the Trust representing Portfolio Securities, but
only upon redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery
(collectively, "Foreign Exchange Agreements")which may be entered into by the
Bank on behalf of the Trust upon the receipt of Proper Instructions, such
Proper Instructions to specify the currency broker or banking institution
(which may be the Bank, or any other subcustodian or agent hereunder, acting as
principal) with which the contract or option is made, and the Bank shall have
no duty with respect to the selection of such currency brokers or banking
institutions with which the Trust deals or for their failure to comply with the
terms of any contract or option.
(b) In order to secure any payments in connection with Foreign Exchange
Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Trust agrees that the Bank shall have a continuing lien and
security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Trust's
benefit or in which the Trust has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Trust authorizes the Bank, in the Bank's sole
discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of the
Trust on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of the
Trust, or other obligations of the Trust incurred for proper Trust purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by an Officer
of the Trust, naming the person or persons to whom such payment is to be made,
and either describing the transaction for which payment is to be made and
declaring it to be an authorized transaction of the Trust, or specifying the
amount of the obligation for which payment is to be made, setting forth the
purpose for which such obligation was incurred and declaring such purpose to be
a proper purpose of the Trust.
5.9 Termination: Upon the termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided herein, and
except for securities to be delivered to any subcustodian appointed pursuant to
Sections 14.2 or 14.3 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
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now or hereafter be delivered to it by or for the account of the Trust. All
such Portfolio Securities will be held or disposed of by the Bank for and
subject at all times to, the instructions of the Trust pursuant to the terms of
this Agreement. Subject to the specific provisions herein relating to Portfolio
Securities that are not physically held by the Bank, the Bank will register all
Portfolio Securities (unless otherwise directed by Proper Instructions or an
Officers' Certificate), in the name of a registered nominee of the Bank as
defined in the Internal Revenue Code and any Regulations of the Treasury
Department issued thereunder, and will execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.
The Trust will from time to time furnish to the Bank appropriate instruments
to enable it to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee, any Portfolio Securities which may from
time to time be registered in the name of the Trust.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank will
vote any of the Portfolio Securities held hereunder, except in accordance with
Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Trust all notices,
proxies and proxy soliciting materials delivered to the Bank with respect to
such Securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Trust), but without
indicating the manner in which such proxies are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that an issuer of
any 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 a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or
stock dividend, which 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 Trust or its designee as authorized by an Officers'
Certificate promptly of the Corporate Action, the Response required in
connection with the Corporate Action and the Bank's deadline for receipt from
the Trust of Proper Instructions regarding the Response (the "Response
Deadline"). The Bank may, upon request, forward to the Trust or its designee as
authorized by an Officers' Certificate via telecopier and/or overnight courier
all notices, information statements or other materials relating to the
Corporate Action after 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 Trust or its designee as authorized by
an Officers' Certificate no later than 5:00 p.m. Eastern Standard Time ("EST")
on the date specified as the Response Deadline and only if the Bank (or its
agent or subcustodian hereunder) has actual possession of all necessary
Securities, consents and other materials no later than 5:00 p.m. EST on the
date specified as the Response Deadline.
(b) The Bank shall have no duty to act upon a required Response if
Proper Instructions relating to such Response and all necessary Securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. EST 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
Securities, consents or other materials are received by the Bank after 5:00
p.m. EST 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.
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(c) In the event that the Trust or its designee as authorized by an
Officers' Certificate 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) Section 14.3(e) of this Agreement shall govern any Corporate Action
involving Foreign Portfolio Securities held by an Eligible Foreign Custodian
(as defined below).
(e) The Bank provides the ability for the Trust or its designee as
authorized by an Officers' Certificate to respond to Corporate Actions through
electronic means using either (i) the Bank's InvestCaps function or
(ii) appropriate SWIFT messaging. In the event the Trust or its agent provides
a Corporate Action Response other than by the aforementioned electronic means,
the Bank shall not be responsible for any delay or failure to process such
Response in a timely manner. In addition, the Bank may assess additional
processing fees to cover the cost of manually processing Corporate Actions
Responses provided to the Bank other than by the aforementioned electronic
means.
6.4 Book-Entry System.
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to the
Trust's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other securities deposited in the Account and shall at all times during
the regular business hours of the Bank (or such agent) be open for inspection
by duly authorized officers, employees or agents of the Trust. Where securities
are transferred to the Trust's account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Trust a quantity of securities in 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 the Trust or shall pay cash collateral against the return of
Portfolio Securities loaned by the Trust upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Bank (or its agent) to
reflect such payment and transfer for the account of the Trust. The Bank (or
its agent) shall transfer securities sold or loaned for the account of the
Trust upon
(i) receipt of advice from the Book-Entry System that payment for
securities sold or payment of the initial cash collateral against the delivery
of securities loaned by the Trust has been transferred to the Account; and
(ii) the making of an entry on the records of the Bank (or its agent)
to reflect such transfer and payment for the account of the Trust. Copies of
all advices from the Book-Entry System of transfers of securities for the
account of the Trust shall identify the Trust, be maintained for the Trust by
the Bank and shall be provided to the Trust at its request. The Bank shall send
the Trust a confirmation, as defined by Rule 17f-4 of the 1940 Act, of any
transfers to or from the account of the Trust;
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(d) The Bank will promptly provide the Trust 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;
6.5 Use of a Depository.
(a) The Bank may use a Depository to hold, receive, exchange, release,
lend, deliver and otherwise deal with Portfolio Securities including stock
dividends, rights and other items of like nature, and to receive and remit to
the Bank on behalf of the Trust all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the name of any
nominee or nominees used by such Depository;
(c) Payment for 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 the Trust
and the Trust shall pay cash collateral against the return of Portfolio
Securities loaned by the Trust only upon delivery of the Securities to or for
the account of the Trust; and upon any sale of Portfolio Securities, delivery
of the Securities will be made only against payment therefor 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
Trust; and
(d) The Bank shall use its best efforts to provide 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) Proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded immediately
to the Bank for prompt transmittal to the Trust;
(iii) Such Depository promptly forwards to the Bank confirmation of
any purchase or sale of Portfolio Securities and of the appropriate book entry
made by such Depository to the Trust's account;
(iv) Such Depository prepares and delivers to the Bank such records
with respect to the performance of the Bank's obligations and duties hereunder
as may be necessary for the Trust to comply with the recordkeeping requirements
of Section 31(a) of the 1940 Act and Rule 31(a) thereunder; and
(v) Such Depository delivers to the Bank all internal accounting
control reports, whether or not audited by an independent public accountant, as
well as such other reports as the Trust may reasonably request in order to
verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. In maintaining procedures
for Book-Entry Paper, the Bank agrees that:
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(a) The Bank will maintain all Book-Entry Paper held by the Trust in an
account of the Bank that includes only assets held by it for customers;
(b) The records of the Bank with respect to the Trust's purchase of
Book-Entry Paper through the Bank will identify, by book-entry, commercial
paper belonging to the Trust which is included in the Book-Entry System and
shall at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Trust;
(c) The Bank shall pay for Book-Entry Paper purchased for the account of
the Trust upon contemporaneous (i) receipt of advice from the Issuer that such
sale of Book-Entry Paper has been effected, and (ii) the making of an entry on
the records of the Bank to reflect such payment and transfer for the account of
the Trust;
(d) The Bank shall cancel such Book-Entry Paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been transferred to the Trust, and (ii) the making of
an entry on the records of the Bank to reflect such payment for the account of
the Trust; and
(e) The Bank will send to the Trust such reports on its system of
internal accounting control with respect to the Book-Entry Paper as the Trust
may reasonably request from time to time.
6.7 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs may be
physically held by the European branch of the U.S. banking institution that is
the issuer of such Eurodollar CD (a "European Branch"), provided that such
Portfolio Securities are identified on the books of the Bank as belonging to
the Trust and that the books of the Bank identify the European Branch holding
such 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 the Trust.
6.8 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 the Trust regarding escrow or
other arrangements (i) in accordance with the provisions of any agreement
entered into upon receipt of Proper Instructions among the Bank, any
broker-dealer registered with the National Association of Securities Dealers,
Inc. (the "NASD"), and, if necessary, the Trust, relating to the compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or organizations.
(ii) Unless another agreement requires it to do so, the Bank shall be
under no duty or obligation to see that the Trust has deposited or is
maintaining adequate margin, if required, with any broker in connection with
any option, nor shall the Bank be under duty or obligation to present such
option to the broker for exercise unless it receives Proper Instructions from
the Trust. The Bank shall have no responsibility for the legality of any put or
call purchased or sold on behalf of the Trust, the propriety of any such
purchase or sale, or the adequacy of any collateral delivered to a broker in
connection with an option or deposited to or withdrawn from a Segregated
Account (as defined in subsection 6.10 below). The Bank specifically, but not
by way of limitation, shall not be under any duty or obligation to:
(i) periodically check or notify the Trust that the amount of such collateral
held by a
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broker or held in a Segregated Account is sufficient to protect such broker or
the Trust against any loss; (ii) effect the return of any collateral delivered
to a broker; or (iii) advise the Trust that any option it holds, has or is
about to expire. Such duties or obligations shall be the sole responsibility of
the Trust.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Trust in accordance with the
provisions of any agreement entered into upon the receipt of Proper
Instructions among the Trust, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account deposits in
connection with transactions by the Trust.
(ii) The responsibilities 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 Section 6.9 as if such subparagraph referred to Futures Commission
Merchants rather than brokers, and Futures and puts and calls thereon instead
of options.
6.9 Segregated Account. The Bank shall establish and maintain a Segregated
Account or Accounts for and on behalf of the Trust.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account upon receipt of Proper Instructions in the following
circumstances:
(i) in accordance with the provisions of any agreement among the
Trust, the Bank and a broker-dealer registered under the Exchange Act and a
member of the NASD or any Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered Contract Market, or of
any similar organizations regarding escrow or other arrangements in connection
with transactions by the Trust;
(ii) for the purpose of segregating cash or securities in connection
with options purchased or written by the Trust or commodity futures purchased
or written by the Trust;
(iii) for the deposit of liquid assets, such as cash, U.S. Government
securities or other high grade debt obligations, having a market value (marked
to market on a daily basis) at all times equal to not less than the aggregate
purchase price due on the settlement dates of all the Trust's then outstanding
forward commitment or "when-issued" agreements relating to the purchase of
Portfolio Securities and all the Trust's then outstanding commitments under
reverse repurchase agreements entered into with broker-dealer firms;
(iv) for the purposes of compliance by the Trust with the procedures
required by Investment Company Act Release No. 10666, or any subsequent release
or releases of the Securities and Exchange Commission relating to the
maintenance of Segregated Accounts by registered investment companies;
(v) for other proper purposes of the Trust, 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 of
the Board signed by an officer of the Trust and certified by the a second
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Officer of the Trust, setting forth the purpose or purposes of such Segregated
Account and declaring such purposes to be proper purposes of the Trust.
(b) Cash and/or Portfolio Securities may be withdrawn from a Segregated
Account pursuant to Proper Instructions in the following circumstances:
(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 the Trust's obligations under outstanding
forward commitment 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 the Trust's outstanding forward commitment or
when-issued agreements for the purchase of portfolio securities or reverse
repurchase agreements are sold to other parties or the Trust's obligations
thereunder are met from assets of the Trust other than those in the Segregated
Account;
(v) for delivery upon settlement of a forward commitment 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.
6.10 Interest Bearing Call or Time Deposits. The Bank shall, upon receipt of
Proper Instructions relating to the purchase by the Trust of interest-bearing
fixed-term and call deposits, transfer cash, by wire or otherwise, in such
amounts and to such bank or banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Trust appropriate notation as to the amount of each such deposit, the
banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. Such deposits shall be deemed
Portfolio Securities of the Trust and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect
of other Portfolio Securities of the Trust.
6.11 Transfer of Securities. The Bank will transfer, exchange, deliver or
release Portfolio Securities held by it hereunder, insofar as such Securities
are available for such purpose, provided that any such transfer, exchange,
delivery or release under this Section shall be made only upon receipt of
Proper Instructions. The Proper Instructions shall state that such transfer,
exchange or delivery is for a purpose permitted under the terms of this
Section 6.11, and shall specify the applicable subsection, or describe the
purpose of the transaction with sufficient particularity to permit the Bank to
ascertain the applicable subsection. After receipt of such Proper Instructions,
the Bank will transfer, exchange, deliver or release Portfolio Securities only
in the following circumstances:
(a) Upon sales of Portfolio Securities for the account of the Trust,
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
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which the transaction occurs, each such payment to be in the amount of the sale
price shown in a broker's confirmation of sale 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 subcustodian hereunder) has actual possession of such Security
at least two business days prior to the date of tender;
(c) Upon conversion of Portfolio Securities pursuant to their terms into
other securities;
(d) For the purpose of redeeming in-kind shares of the Trust upon
authorization from the Trust;
(e) In the case of option contracts owned by the Trust, for presentation
to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or retired or
otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio Securities
held by the Bank in order to collateralize loans, if any, made to the Trust by
any bank, including the Bank; provided, however, that such Portfolio Securities
will be released only upon payment to the Bank for the account of the Trust of
the moneys borrowed, provided further, however, 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, Portfolio Securities may be released
for that purpose without any such payment. In the event that any pledged
Portfolio Securities are held by the Bank, they will be so held for the account
of the lender, and after notice to the Trust from the lender in accordance with
the normal procedures of the lender and any loan agreement between the Trust
and the lender that an event of deficiency or default on the loan has occurred,
the Bank may deliver such pledged Portfolio Securities to or for the account of
the lender;
(h) for the purpose of releasing certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market
value of such security, as set forth in the Proper Instructions received by the
Bank before such payment is made;
(i) for the purpose of delivering securities lent by the Trust to a bank
or broker dealer, but only against receipt in accordance with street delivery
custom except as otherwise provided herein, of adequate collateral as agreed
upon from time to time by the Trust and the Bank, and upon receipt of payment
in connection with any repurchase agreement relating to such securities entered
into by the Trust;
(j) for the purpose of removing Portfolio Securities deemed to be
worthless so as to remove such Portfolio Securities from the Trust, and the
Trust hereby agrees that in any such event it
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shall relinquish any and all ownership rights or entitlements to the designated
Portfolio Securities or any future value thereof, to the Bank;
(k) for other authorized transactions of the Trust or for other proper
purposes of the Trust; provided that before making such transfer, the Bank will
also receive a certified copy of resolutions of the Board, signed by an
authorized officer of the Trust (other than the officer certifying such
resolution) and certified by another Officer of the Trust, specifying the
Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Trust or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
(l) upon termination of this Agreement as hereinafter set forth pursuant
to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.11,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Trust held by the
Bank in connection with redemptions and repurchases by the Trust of outstanding
common shares, the Bank will rely on notification by the Trust's transfer agent
of receipt of a request for redemption and certificates, if issued, in proper
form for redemption before such payment is made. Payment shall be made in
accordance with the Articles of Incorporation or Declaration of Trust and
By-laws of the Trust (the "Articles"), from assets available for said purpose.
8. Merger, Dissolution, etc. of the Trust. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Trust into or the consolidation of the Trust with another investment company,
the sale by the Trust of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Trust and
distribution of its assets, upon the payment of the fees, disbursements and
expenses of the Bank through the end of the then current month, the Bank will
deliver the Portfolio Securities held by it under this Agreement and disburse
cash only upon the order of the Trust set forth in an Officers' Certificate,
accompanied by a certified copy of a resolution of the Board authorizing any of
the foregoing transactions. Upon completion of such delivery and disbursement
and the payment of all such fees, disbursements and expenses of the Bank, this
Agreement will terminate and the Bank shall be released from any and all
obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding anything
herein to the contrary, unless and until the Bank receives Proper Instructions
to the contrary, the Bank will take the following actions without prior
authorization or instruction of the Trust or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name of the
Trust all checks, drafts, or other negotiable or transferable instruments or
other orders for the payment of money received by it for the account of the
Trust and hold for the account of the Trust all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio
Securities held thereunder;
9.2 Present for payment all coupons and other income items held by it for
the account of the Trust which call for payment upon presentation and hold the
cash received by it upon such payment for the account of the Trust;
9.3 Receive and hold for the account of the Trust all securities received as
a distribution on Portfolio Securities as a result of a stock dividend, share
split-up, reorganization, recapitalization,
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merger, consolidation, readjustment, distribution of rights and similar
securities issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Trust all necessary ownership and
other certificates and affidavits required by the Internal Revenue Code or the
regulations of the Treasury Department issued thereunder, or by the laws of any
state, now or hereafter in effect, inserting the Trust's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
The Bank will execute and deliver such certificates in connection with
Portfolio Securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, or under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called, redeemed,
retired or otherwise become payable, and hold cash received by it upon payment
for the account of the Trust; and
9.6 Exchange interim receipts or temporary securities for definitive
securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Trust notice actually received by it of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities. If Portfolio Securities upon which such
income is payable are in default or payment is refused after due demand or
presentation, the Bank will notify the Trust in writing of any default or
refusal to pay within two business days from the day on which it receives
knowledge of such default or refusal.
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. The books and records of the
Bank pertaining to its actions under this Agreement and reports by the Bank or
its independent accountants concerning its accounting system, procedures for
safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors employed by
the Trust and will be preserved by the Bank in the manner and in accordance
with the applicable rules and regulations under the 1940 Act.
The Bank shall perform fund accounting 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 Trust.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Trust Evaluation and Yield Calculation
12.1 Trust 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 public offering price of a share of
capital stock of each Portfolio, such determination to be made in accordance
with the provisions of the Articles and By-laws of the Trust and the Prospectus
and Statement of Additional Information relating to each Portfolio, as they may
from time to time be amended, and any applicable resolutions of the Board at
the time in
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force and applicable; and promptly to notify the Trust, the proper exchange and
the NASD or such other persons as the Trust may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) the manner of accrual of the liabilities of each
Portfolio and in respect of liabilities of each Portfolio not appearing on its
books of account kept by the Bank, (ii) reserves, if any, authorized by the
Board or that no such reserves have been authorized, (iii) the source of the
quotations to be used in computing the net asset value, (iv) the value to be
assigned to any security for which no price quotations are available, and
(v) the method of computation of the public offering price on the basis of the
net asset value of the shares, and the Bank shall not be responsible for any
loss occasioned by such reliance or for any good faith reliance on any
quotations received from a source pursuant to (iii) or (iv) above.
12.2. Yield Calculation. The Bank will compute the performance results of
each Portfolio (the "Yield Calculation") in accordance with the provisions of
Release No. 33-6753 and Release No. IC-16245 (February 2, 1988) (the
"Releases") promulgated by the Securities and Exchange Commission, and any
subsequent amendments to, published interpretations of or general conventions
accepted by the staff of the Securities and Exchange Commission with respect to
such releases or the subject matter thereof ("Subsequent Staff Positions"),
subject to the terms set forth below:
(a) The Bank shall compute the Yield Calculation for each Portfolio 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 Trust.
(b) In performing the Yield Calculation, the Bank will derive the items
of data necessary for the computation from the records it generates and
maintains for each Portfolio pursuant Section 11 hereof. 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 Trust, any of the Trust's designated agents or any of the Trust's
designated third party providers.
(c) At the request of the Bank, the Trust 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 set forth in
the Releases or any Subsequent Staff Positions as they specifically apply to
the Trust. In the event that the computation methods in the Releases or the
Subsequent Staff Positions or the application to the Trust 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 which is pertinent to
the Trust, the Trust or its designated agent 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
which is covered by this Section, and shall not be responsible for its
computations made in accordance with such determinations so long as such
computations are mathematically correct.
(d) The Trust shall keep the Bank informed of all publicly available
information and of any non-public advice, or information obtained by the Trust
from its independent auditors or by its personnel or the personnel of its
investment adviser, or Subsequent Staff Positions 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
Releases) unless it has been furnished to the Bank in writing.
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13. Additional Services. The Trust or GCCM may, at any time and from time to
time, propose in writing that the Bank perform duties or services that are
outside of the scope of the services then specifically described herein
("Initiative"). In such event, Bank shall submit its response ("Response") in
respect of each Initiative proposed by the Trust or GCCM within thirty (30)
business days after Bank's receipt of the Trust's or GCCM's proposed
Initiative, or, if the scope of the Initiative is such that thirty (30)
business days would be insufficient, within a reasonable period of time. Each
such response shall be in writing and shall contain (i) Bank's response to the
Trust's or GCCM's description and specifications for the Initiative, (ii) fees
to be charged for the Initiative; and (iii) timeframe for completion of the
Initiative. In the event the Trust and GCCM desire to contract with Bank for
the Initiative in accordance with the Response, or the parties otherwise reach
agreement on the terms and conditions of any Initiative, this Agreement shall
be appropriately amended to incorporate the Initiative and the obligations of
Bank with respect to the Initiative shall be governed by all the terms and
conditions of this Agreement as if it were a service described herein, to the
extent that such terms are not inconsistent with those agreed to by the parties
with respect to such Initiative, which agreed terms and conditions, in the
event of a conflict with this Agreement, shall be controlling.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. In performing its duties
hereunder and any other duties listed on any Schedule hereto, if any, the Bank
will be entitled to receive and act upon the advice of independent counsel of
its own selection, which may be counsel for the Trust, and will be without
liability for any action taken or thing done or omitted to be done in
accordance with this Agreement in good faith in conformity with such advice.
The Bank shall notify the Trust and GCCM of any such action taken or thing done
or omitted to be done in accordance with this Agreement in conformity with the
advice of independent counsel.
The Bank will be under no duty or obligation to inquire into and will not be
liable for:
(a) the validity of the issue of any Portfolio Securities purchased by
or for the Trust, the legality of the purchases thereof or the propriety of the
price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or for the
Trust or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of the Trust
or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares of the Trust or
the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Trust or the
legality of the distribution of any Portfolio Securities as payment in kind of
such dividend; and
(f) any property or moneys of the Trust unless and until received by it,
and any such property or moneys delivered or paid by it pursuant to the terms
hereof.
Moreover, the Bank will not be under any duty or obligation to ascertain
whether any Portfolio Securities at any time delivered to or held by it for the
account of the Trust are such as may properly be
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held by the Trust under the provisions of its Articles, By-laws, any federal or
state statutes or any rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Trust Held in
the United States. The Bank may employ agents of its own selection 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 subcustodians
selected by or at the direction of the Trust, provided that any such
subcustodian meets at least the minimum qualifications required by
Section 17(f)(1) of the 1940 Act to act as a custodian of the Trust's assets
with respect to property of the Trust held in the United States. The Bank shall
have no liability to the Trust or any other person by reason of any act or
omission of any such subcustodian and the Trust shall indemnify the Bank and
hold it harmless from and against any and all actions, suits and claims,
arising directly or indirectly out of the performance of any subcustodian. Upon
request of the Bank, the Trust shall assume the entire defense of any action,
suit, or claim subject to the foregoing indemnity. The Trust or GCCM shall pay
all fees and expenses of any subcustodian.
14.3 Duties of the Bank with Respect to Property of the Trust Held Outside
of the United States.
(a) Appointment of Foreign Custody Manager. The Trust hereby appoints
the Bank as Foreign Custody Manager (as that term is defined in Rule 17f-5
under the 1940 Act). The Bank's duties and obligations with respect to the
Trust's Portfolio Securities and other assets maintained outside the United
States shall be, to the extent not set forth herein, as set forth in the
attached Appendix C (the "Delegation Services"). In the event of any conflict
of terms related to the services performed under this section 14.3, Appendix C
shall control. The Trust represents that the Board has determined that it is
reasonable to rely on Bank to perform the responsibilities described in this
Agreement and the Appendix C.
(b) Segregation of Securities. The Bank shall identify on its books as
belonging to the Trust the Foreign Portfolio Securities held by each foreign
sub-custodian (each an "Eligible Foreign Custodian") selected by the Bank in
its capacity as Foreign Custody Manager.
(c) Access of Independent Accountants of the Trust. Upon request of the
Trust, the Bank in its capacity as Foreign Custody Manager will use its best
efforts to arrange for the independent accountants of the Trust to be afforded
access to the books and records of any foreign banking institution employed as
an Eligible Foreign Custodian insofar as such books and records relate to the
performance of such foreign banking institution with regard to the Trust's
Portfolio Securities and other assets.
(d) Reports by Bank. The Bank, in its capacity as the Trust's Foreign
Custody Manager, will supply to the Trust the reports required under the
Delegation Services outlined in Appendix C.
(e) Transactions in Foreign Custody Account. Transactions with respect
to the assets of the Trust held by an Eligible Foreign Custodian shall be
effected in accordance with the applicable agreement between the Bank as
Foreign Custody Manager and such Eligible Foreign Custodian. If at any time any
Foreign Portfolio Securities shall be registered in the name of the nominee of
the Eligible Foreign Custodian, the Trust agrees to hold any such nominee
harmless from any liability by reason of the registration of such securities in
the name of such nominee.
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Notwithstanding any provision of this Agreement to the contrary, settlement
and payment for Foreign Portfolio Securities received for the account of the
Trust and delivery of Foreign Portfolio Securities maintained for the account
of the Trust may be effected in accordance with the customary established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer. Cash held at an Eligible Foreign Custodian will generally be held in
a deposit account at such Eligible Foreign Custodian. The parties agree that
the Bank may deduct a cash management fee up to the amount of interest earned
on any such cash deposits with such Eligible Foreign Custodian.
In connection with any action to be taken with respect to the Foreign
Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights, exchange
rights, conversion rights or tender rights, or any other action in connection
with any other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Trust or
its designee as authorized by an Officers' Certificate such information in
connection therewith as is made available to the Bank by the Eligible Foreign
Custodian, and shall promptly forward to the applicable Eligible Foreign
Custodian any instructions, forms or certifications with respect to such
Rights, and any instructions relating to the actions to be taken in connection
therewith, as the Bank shall receive from the Trust or its designee as
authorized by an Officers' Certificate pursuant to Proper Instructions.
Notwithstanding the foregoing, the Bank shall have no further duty or
obligation with respect to such Rights, including, without limitation, the
determination of whether the Trust is entitled to participate in such Rights
under applicable U.S. and foreign laws, or the determination of whether any
action proposed to be taken with respect to such Rights by the Trust or by the
applicable Eligible Foreign 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.
(f) Tax Law. It shall be the responsibility of the Trust to notify the
Bank of the obligations imposed on the Trust or the Bank as the custodian of
the Trust by the tax law of any non-U.S. jurisdiction, including responsibility
for withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility of the
Eligible Foreign Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Trust with respect to any claim for exemption
or refund under the tax law of jurisdictions for which the Trust has provided
such information.
14.4 Taxes; Tax Services. The Bank shall have no responsibility or liability
for any obligations now or hereafter imposed on the Trust or the Bank as
custodian of the Trust by the tax laws of any jurisdiction. Neither the Bank
nor any of the Bank's employees, officers or directors are acting as the
Trust's tax experts. In the event the Bank provides any tax related services to
the Trust, such services are merely to provide calculations and information to
be reviewed and approved by the Trust and its agent's, including the Trust's
tax experts, and to implement the Trust's tax policy decisions. As a result,
the Bank shall have no responsibility or liability for any obligations now or
hereafter imposed on the Trust or the Bank as custodian of the Trust by the tax
laws of any jurisdiction (including any interest or penalties thereon),
including but not limited to any loss or liability resulting from the Trust
failing to (i) provide the Bank with any relevant information regarding the
Trust's tax status, (ii) respond to requests for information or documentation
regarding tax rates, eligibility for at-source tax relief, reclaims or other
similar notifications or (iii) the Bank's calculation or review of, or the
implementation of the Trust's tax policy decisions.
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14.5 Insurance. The Bank shall use the same care with respect to the
safekeeping of Portfolio Securities and cash of the Trust held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Trust.
14.6 Advances by the Bank. The Bank may, in its sole discretion, advance
funds on behalf of the Trust to make any payment permitted by this Agreement
upon receipt of any proper authorization required by this Agreement for such
payments by the Trust. Should such a payment or payments, with advanced funds,
result in an overdraft (due to insufficiencies of a Portfolio's account with
the Bank, or for any other reason) this Agreement deems any such overdraft or
related indebtedness a loan made by the Bank to the Trust payable on demand.
Such overdraft shall bear interest at the current rate charged by the Bank for
such loans unless the Trust shall provide the Bank with agreed upon
compensating balances. The Trust agrees that the Bank shall have a continuing
lien and security interest to the extent of any overdraft or indebtedness and
to the extent required by law, in and to any property at any time held by it
for the Trust's benefit or in which the Trust has an interest and which is then
in the Bank's possession or control (or in the possession or control of any
third party acting on the Bank's behalf). The Trust authorizes the Bank, in the
Bank's sole discretion, at any time to charge any overdraft or indebtedness,
together with interest due thereon, against any balance of account standing to
the credit of the Trust on the Bank's books.
14.7. Fees and Expenses of the Bank. For the services rendered by the Bank
hereunder, GCCM will pay to the Bank such fees at such rate as shall be agreed
upon in writing by the parties from time to time. Each Portfolio will also pay
or reimburse the Bank from time to time for any transfer taxes payable upon any
transfers made hereunder and any duties listed on any Schedule to this
Agreement, if any. GCCM will pay or reimburse the Bank for all necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement. The Trust or GCCM will pay or reimburse the Bank
any indemnities for any loss, liabilities or expense to the Bank as provided
herein. The Bank will also be entitled to reimbursement by GCCM for all
reasonable expenses incurred in conjunction with termination of this Agreement
and any conversion or transfer work done in connection therewith, as mutually
agreed by the Bank and GCCM.
Fees and expenses will be calculated monthly. GCCM will have thirty
(30) days after the receipt of an invoice to dispute any charge that appears on
such invoice. After such thirty (30) day period, the invoice will be deemed to
be complete and accurate and may no longer be disputed.
15. Limitation of Liability.
15.1 The Bank shall be held to the exercise of reasonable care and diligence
in carrying out the provisions of this Agreement, and shall be responsible for
its negligence, willful misfeasance, bad faith and reckless disregard of its
duties hereunder, provided that the Bank shall not thereby be required to take
any action which is in contravention of any applicable law, rule or regulation
or any order or judgment of any court of competent jurisdiction. The Trust
agrees to indemnify the Bank or any of its officers, directors employees or
agents (collectively, the "Indemnified Parties") from and against any and all
loss, damage, liability, actions, suits, claims, costs and expenses, including
legal fees, (a "Claim") arising as a result of any act or omission of the Bank
or any Indemnified Party under this Agreement, except for any Claim resulting
solely from the negligence, willful misfeasance or bad faith of the Bank or any
Indemnified Party or the reckless disregard by the Bank of its duties
hereunder. Without limiting the foregoing, neither the Bank nor the Indemnified
Parties shall be liable for, and the Bank and the Indemnified Parties shall be
indemnified against, any Claim arising as a result of:
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(a) Any act or omission by the Bank or any Indemnified Party in good
faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Board, telegram, telecopier, notice,
request, certificate or other instrument reasonably believed by the Bank to
genuine;
(b) Any act or omission of any subcustodian selected by or at the
direction of the Trust;
(c) Any act or omission of any Foreign Custody Manager other than the
Bank or any act or omission of any Eligible Foreign Custodian if the Bank is
not the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Trust, have not been
registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which the Bank has not
received Proper Instructions or obtained actual possession of all necessary
Securities, consents or other materials by 5:00 p.m. EST on the date specified
as the Response Deadline;
(f) Any act or omission of any European Branch of a U.S. banking
institution that is the issuer of Eurodollar CDs in connection with any
Eurodollar CDs held by such European Branch;
(g) Information relied on in good faith by the Bank and supplied by any
Authorized Person in connection with the calculation of (i) the net asset value
and public offering price of the shares of capital stock of a Portfolio or
(ii) the Yield Calculation;
(h) Any information which the Bank provides or does not provide related
to Country Risk in the Delegation Services attached as Appendix C; or
(i) Any acts of God, strikes, legal constraint, government actions,
emergency conditions, 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
electrical power or other utilities, transportation of computers (hardware or
software) and computer facilities, the unavailability of energy sources,
equipment or transmission failure, and other similar happenings, damage, causes
or events reasonably beyond the Bank's control.
15.2 Notwithstanding anything to the contrary in this Agreement, in no event
shall any party to this Agreement be liable to any other party or any third
party for lost profits or lost revenues or any special, consequential, punitive
or incidental damages of any kind whatsoever in connection with this Agreement
or any activities hereunder other than fees to be paid under this Agreement.
15.3 The indemnification contained herein shall survive the termination of
this Agreement.
16. Termination.
16.1 The term of this Agreement shall be three (3) years commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
After the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive three (3) year terms (each a "Renewal Term")
unless written notice of non-renewal is delivered by the non-renewing party to
the
November 2006
19
other party no later than ninety days prior to the expiration of the Initial
Term or any Renewal Term, as the case may be.
16.2 If at any time a majority of the "non-interested trustees" of the Board
of Trustees of the Trust (as defined in the 0000 Xxx) reasonably determines
that the performance of the Bank under this Agreement has been unsatisfactory,
written notice of such determination setting forth the reasons for such
determination shall be provided to the Bank. In the event the Bank shall not,
within 90 days thereafter, cure the identified deficiencies to the satisfaction
of the Board of Trustees of the Trust, the Trust, with the authorization of the
Board, may terminate this Agreement. Either party hereto may terminate this
Agreement prior to the expiration of the Initial Term or any Renewal Term in
the event the other party violates any material provision of this Agreement by
written notice of such violation from the non-violating party, provided that
the violating party does not cure such violation within ninety (90) days of
receipt of written notice of such violation, and further provided that such
notice of violation may only be given within ninety (90) days of the date on
which the non-violating party knew or should have known of such violation.
16.3 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 Trust. The obligation of the Bank to deliver and transfer over the
assets of the Trust held by it directly to such successor custodian will
commence as soon as such successor is appointed and will continue until
completed as aforesaid. If the Trust does not select a successor custodian
within ninety (90) days from the date of delivery of notice of termination the
Bank may, subject to the provisions of subsection 16.3, deliver the Portfolio
Securities and cash of the Trust held by the Bank to a bank or trust company of
the Bank's own selection which meets the requirements of Section 17(f)(1) of
the 1940 Act and has a reported capital, surplus and undivided profits
aggregating not less than $2,000,000, to be held as the property of the Trust
under terms similar to those on which they were held by the Bank, whereupon
such bank or trust company so selected by the Bank will become the successor
custodian of such assets of the Trust with the same effect as though selected
by the Board. Thereafter, the Bank shall be released from any and all
obligations under this Agreement.
16.4 Prior to the expiration of ninety (90) days after notice of termination
has been given, the Trust may furnish the Bank with an order of the Trust
advising that a successor custodian cannot be found willing and able to act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Trust the question of whether the Trust will be liquidated
or will function without a custodian for the assets of the Trust held by the
Bank. In that event the Bank will deliver the Portfolio Securities and cash of
the Trust held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Trust's Secretary and an opinion of
counsel to the Trust in form and content satisfactory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.
16.5 GCCM shall reimburse the Bank for any reasonable expenses, as mutually
agreed by the Bank and GCCM, incurred by the Bank in connection with the
termination of this Agreement, unless such termination is sought by the Trust
as a result of a violation of this Agreement committed by the Bank, in
accordance with paragraph 16.2 above.
16.6 At any time after the termination of this Agreement, the Trust may,
upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
November 2006
20
17. Confidentiality. The Trust, GCCM and the Bank hereto agree than any
non-public information obtained hereunder concerning the other party is
confidential and may not be disclosed 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 to an
injunction or injunctions without bond or other security to prevent breaches of
this provision.
18. 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 (i) United
States Postal Service registered mail, (ii) telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office at
the address set forth below, namely:
(a) In the case of notices sent to the Trust to:
Green Century Funds
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, President
(b) In the case of notices sent to GCCM to:
Green Century Capital Management, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, Treasurer
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Director - Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time designate in
writing.
19. Amendments. This Agreement may not be altered or amended, except by an
instrument in writing, executed by all parties.
20. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Trust or
GCCM without the written consent of the Bank or by the Bank without the written
consent of the Trust and GCCM, authorized and approved by Board of the Trust
and by the Board of Directors of GCCM; and provided further that termination
proceedings pursuant to Section 16 hereof will not be deemed to be an
assignment within the meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
November 2006
21
22. 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.
23. Entire Agreement. This Agreement, together with its Appendices,
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations assumed by
the Trust hereunder shall be limited in all cases to the assets of the Trust
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Trust.
25. Several Obligations of the Portfolios. This Agreement is an agreement
entered into between the Bank and the Trust with respect to each Portfolio.
With respect to any obligation of the Trust on behalf of any Portfolio arising
out of this Agreement, the Bank shall look for payment or satisfaction of such
obligation solely to the assets of the Portfolio to which such obligation
relates as though the Bank had separately contracted with the Trust by separate
written instrument with respect to each Portfolio.
26. Non-exclusive Services. The Trust understands that the Bank now acts and
will continue to act as custodian of various investment companies and fiduciary
of other managed accounts, and the Trust has no objection to the Bank's so
acting. In addition, it is understood that the persons employed by the Bank to
assist in the performance of its duties hereunder may not devote their full
time to such services and nothing herein contained shall be deemed to limit or
restrict the right of the Bank or any affiliate of the Bank to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
27. Advice of Counsel. Each of the parties has had the opportunity to be
represented or assisted by counsel in the negotiation and preparation of this
Agreement. The parties agree that this Agreement is to be constructed as
jointly drafted. Accordingly, this Agreement will be construed according to the
fair meaning of its language, and the rule of construction that ambiguities are
to be resolved against the drafting party will not be employed in the
interpretation of this Agreement.
28. Anti-Money Laundering.
(a) The Trust represents and warrants that to the best of its knowledge
it is in compliance and will endeavor to continue to be in compliance with all
applicable anti-money laundering laws and regulations, including the Bank
Secrecy Act ("BSA") and applicable guidance issued by the Securities and
Exchange Commission ("SEC") and the guidance and rules of the National
Association of Securities Dealers, Inc. (the "NASD").
(b) The Trust represents and warrants that it has in place anti-money
laundering policies and procedures which include a customer identification
program that complies with the law in jurisdictions in which shares are
distributed, including applicable provisions of the BSA, the USA Patriot Act of
2001 and programs administered by the U.S. Department of the Treasury's Office
of Foreign Assets Control.
(c) The Trust agrees to take all reasonable steps to determine (i) the
true identity of its customers; (ii) the source of its customers' funds; and
(iii) that its customers are not involved in
November 2006
22
money laundering or terrorist financing activities, in each case to the extent
required by applicable law. The Trust further agrees to comply with any other
"know your customer" requirements under applicable law; and to monitor its
customers' transactions in order to detect attempted or actual money laundering
in accordance with applicable laws. The Trust further agrees to notify the Bank
of any suspicious activity relating to transactions involving fund shares.
(d) Upon the Bank's reasonable request, Trust agrees to promptly provide
Bank with documentation relating to the Trust's anti-money laundering policies,
procedures and process.
[Remainder of Page Intentionally Left Blank]
November 2006
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
Green Century Funds
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxx
Title: President
Green Century Capital Management,
Inc.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
Investors Bank & Trust Company
By: /s/ Xxxxxxx XxXxxxx
-----------------------------
Name: Xxxxxxx XxXxxxx
Title: Managing Director
Anti-Money Laundering Disclosure. Important information about opening new
accounts with the Bank: To help the government fight the funding of terrorism
and money laundering activities, Federal law requires all financial
institutions to obtain, verify, and record information that identifies each
customer who opens an account. As a result, the Bank may ask for additional
information related to the Trust in order to verify the Trust's identity as a
customer. In addition to requesting a customer's name, address, date of birth
(if applicable), and tax identification number or other documentation for
foreign entities, the Bank may also ask for other identifying documents such as
trust or partnership agreements or the driver's license and/or passports for
individuals and/or individuals responsible for the entity.
November 2006
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Appendices
Appendix A........................................ Portfolios
Appendix B........................................ Additional Services
Appendix C........................................ Delegation Services
Appendix D........................................ Fees
November 2006
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APPENDIX A
Portfolios
Green Century Balanced Fund
Green Century Equity Fund
November 2006
26
APPENDIX C
DELEGATION SERVICES
1. Definitions
Unless otherwise defined in the Agreement, capitalized terms in this
Appendix shall have the following meanings:
a. Country Risk
Country Risk means all factors reasonably related to the systemic risk
of holding Foreign Assets in a particular country including, but not limited
to, such country's financial infrastructure (including any Securities
Depositories operating in such country or the eligibility of such Securities
Depositories under applicable rules); prevailing custody and settlement
practices; and laws applicable to the safekeeping and recovery of Foreign
Assets held in custody.
b. Eligible Foreign Custodian
Eligible Foreign Custodian has the meaning set forth in Rule 17f-5(a)(1)
and it is understood that such term includes foreign branches of U.S. Banks (as
the term "U.S. Bank" is defined in Rule 17f-5(a)(7)).
c. Foreign Assets
Foreign Assets has the meaning set forth in Rule 17f-5(a)(2)
d. Foreign Custody Manager
Foreign Custody Manager has the meaning set forth in Rule 17f-5(a)(3).
e. Monitor
Monitor means to re-assess or re-evaluate, at reasonable intervals, a
decision, determination or analysis previously made.
f. Securities Depository
Securities Depository has the meaning set forth in Rule 17f-4(a).
2. Jurisdictions and Depositories Covered
a. Jurisdictions and Depositories
The authority delegated by this Agreement in connection with Rule 17f-5
shall apply with respect to Foreign Assets held in all jurisdictions within the
Bank's global custody network at any time as provided to the Trust in our
directors or a similar report or otherwise listed on Eyes to the World, a
service available through the Bank's Web Site at xxx.xxxxx.xxx or a similar
service, which may be
November 2006
27
updated from time to time. Upon the addition of a new jurisdiction to the
Bank's global custody network, such new jurisdiction will automatically be
deemed to be covered by this Agreement.
Bank's responsibilities under this Agreement in connection with Rule
17f-7 shall apply only with respect to these Securities Depositories listed on
Eyes to the World or a similar service. Upon the creation of a new Securities
Depository in any of the applicable jurisdictions, such Securities Depository
will automatically be deemed to be approved and will be covered by the terms of
this Agreement unless the Bank is notified in writing otherwise.
b. Withdrawal of Approved Jurisdictions
The Trust may withdraw its delegation to Bank with respect to any
jurisdiction or (ii) retention of Bank with respect to any Securities
Depository upon written notice to Bank. Ten days (or such longer period as to
which the parties agree in such event) after receipt of any such notice by the
party other than the party giving notice, Bank shall have no further
responsibility or authority under this Agreement with respect to the
jurisdiction(s) or Securities Depository as to which delegation is withdrawn.
3. Delegation of Authority to Act as Foreign Custody Manager
a. Selection of Eligible Foreign Custodians
Subject to the provisions of this Agreement and the requirements of Rule
17f-5 (and any other applicable law), Bank is authorized and directed to place
and maintain Foreign Assets in the care of any Eligible Foreign Custodian(s)
selected by Bank in each jurisdiction to which this Agreement applies, except
that Bank does not accept such authorization and direction with regard to
Securities Depositories.
b. Contracts With Eligible Foreign Custodians
Subject to the provisions of this Agreement and the requirements of Rule
17f-5 (and any other applicable law), Bank is authorized to enter into, on
behalf of Trust, such written contracts governing Trust's foreign custody
arrangements with such Eligible Foreign Custodians as Bank deems appropriate.
4. Monitoring of Eligible Foreign Custodians and Contracts
In each case in which Bank has exercised the authority delegated under this
Agreement to place Foreign Assets with an Eligible Foreign Custodian, Bank is
authorized to, and shall, on behalf of the Trust, establish a system to Monitor
the appropriateness of maintaining Foreign Assets with such Eligible Foreign
Custodian. In each case in which Bank has exercised the authority delegated
under this Agreement to enter into a written contract governing the Trust's
foreign custody arrangements, Bank is authorized to, and shall, on behalf of
the Trust, establish a system to Monitor the appropriateness of such contract.
5. Securities Depositories
a. In accordance with the requirements of Rule 17f-7, Bank shall, upon
execution of this Agreement, provide the Trust or its investment adviser with
an analysis of the custody risks associated with maintaining assets with each
Securities Depository.
November 2006
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b. In accordance with the requirements of Rule 17f-7, Bank shall Monitor
the custody risks associated with maintaining assets with each Securities
Depository hereto on a continuing basis, and shall promptly notify the Trust or
its investment adviser of any adverse material change in such risks.
6. Guidelines and Procedures for the Exercise of Delegated Authority
a. Board's Conclusive Determination Regarding Country Risk
In exercising its delegated authority under this Agreement, Bank may
assume, for all purposes, that the Trust's Board (or the Trust's investment
advisor, pursuant to authority delegated by Board) has considered, and pursuant
to its fiduciary duties to the Trust and the Trust's shareholders, determined
to accept, such Country Risk as is incurred by placing and maintaining Foreign
Assets in the jurisdictions to which this Agreement applies. In exercising its
delegated authority under this Agreement, Bank may also assume that Board (or
the Trust's investment advisor, pursuant to authority delegated by Board) has,
and will continue to, Monitor such Country Risk to the extent Board deems
necessary or appropriate.
Except as specifically described herein, nothing in this Agreement shall
require Bank to make any selection or to engage in any Monitoring on behalf of
the Trust that would entail consideration of Country Risk.
b. Selection of Eligible Foreign Custodians
In exercising the authority delegated under this Agreement to place
Foreign Assets with an Eligible Foreign Custodian, Bank shall determine that
Foreign Assets will be subject to reasonable care, based on the standards
applicable to custodians in the market in which the Foreign Assets will be
held, after considering all factors relevant to the safekeeping of such Foreign
Assets, including, without limitation;
i. The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if applicable),
the method of keeping custodial records, and the security and data
protection practices;
ii. Whether the Eligible Foreign Custodian has the financial strength
to provide reasonable care for Foreign Assets;
iii. The Eligible Foreign Custodian's general reputation and standing;
iv. Whether the Trust will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as
by virtue of the existence of any offices of the Eligible Foreign
Custodian in the United States or the Eligible Foreign Custodian's
consent to service of process in the United States;
v. In the case of an Eligible Foreign Custodian that is a banking
institution or trust company, any additional factors and criteria
set forth in Schedule 1 to this Agreement; and
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c. Evaluation of Written Contracts
In exercising the authority delegated under this Agreement to enter into
written contracts governing the Trust's foreign custody arrangements with an
Eligible Foreign Custodian, Bank shall determine that such contracts provide
reasonable care for Foreign Assets based on the standards applicable to
Eligible Foreign Custodians in the relevant market. In making this
determination, Bank shall ensure that the terms of such contracts comply with
the provisions of Rule 17f-5(c)(2).
d. Monitoring of Eligible Foreign Custodians
In exercising the authority delegated under this Agreement to establish
a system to Monitor the appropriateness of maintaining Foreign Assets with an
Eligible Foreign Custodian or the appropriateness of a written contract
governing the Trust's foreign custody arrangements, Bank shall consider any
factors and criteria set forth in Schedule 2 to this Agreement. If, as a result
of its Monitoring of Eligible Foreign Custodian relationships hereunder or
otherwise, the Bank determines in its sole discretion that it is in the best
interest of the safekeeping of the Foreign Assets to move such Foreign Assets
to a different Eligible Foreign Custodian, the Trust shall bear any expense
related to such relocation of Foreign Assets.
7. Standard of Care
a. In exercising the authority delegated under this Agreement with regard
to its duties under Rule 17f-5, Bank agrees to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of Foreign Assets of an investment company registered under the
1940 Act would exercise.
b. In carrying out its responsibilities under this Agreement with regard
to Rule 17f-7, Bank agrees to exercise reasonable care, prudence and diligence.
8. Reporting Requirements
Bank agrees to provide written reports notifying the Trust of the placement
of Foreign Assets with a particular Eligible Foreign Custodian and of any
material change in the Trust's arrangements with such Eligible Foreign
Custodians. Such reports shall be provided to the Trust quarterly for
consideration at the next regularly scheduled meeting of the Trust's Board or
earlier if deemed necessary or advisable by the Bank in its sole discretion.
9. Provision of Information Regarding Country Risk
With respect to the jurisdictions covered hereby pursuant to paragraph 2,
Bank agrees to provide the Trust and the Trust's investment adviser with access
to Eyes to the World/TM/, a service available through the Bank's Web Site at
xxx.xxxxx.xxx or a similar service, containing information relating to Country
Risk, if available, as is specified in Schedule 3 to this Agreement. Such
information relating to Country Risk shall be updated from time to time as the
Bank deems necessary.
10.Termination of Services
The services outlined in this Appendix may be terminated at any time,
without penalty, by written notice from the terminating party to the
non-terminating party. Termination will become
November 2006
30
effective 30 days after receipt by the non-terminating party of such notice.
Following termination of these services, all other terms and conditions of this
Agreement shall remain in full force and effect.
November 2006
31
List of Schedules
Schedule 1 - Additional Factors and Criteria To Be Applied in the Selection of
Eligible Foreign Custodians That Are Banking Institutions or
Trust Companies
Schedule 2 - Factors and Criteria To Be Applied in Establishing Systems For
the Monitoring of Foreign Custody Arrangements and Contracts
Schedule 3 - Information Regarding Country Risk
November 2006
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SCHEDULE 1
Additional Factors and Criteria To Be Applied
in the Selection of Eligible Foreign Custodians
That Are Banking Institutions or Trust Companies
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are banking institutions or trust companies,
Bank shall consider the following factors, if such information is available
(check all that apply):
[X] None
[ ] Other (list below):
November 2006
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SCHEDULE 2
Factors and Criteria To Be Applied
in Establishing Systems For the Monitoring of
Foreign Custody Arrangements and Contracts
In establishing systems for the Monitoring of foreign custody arrangements
and contracts with Eligible Foreign Custodians, Bank shall consider the
following factors, if such information is available:
1. Operating performance
2. Established practices and procedures
3. Relationship with market regulators
4. Contingency planning
November 2006
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SCHEDULE 3
Information Regarding Country Risk
To aid the Trust in its determinations regarding Country Risk, Bank will
furnish Board annually with respect to the jurisdictions specified in paragraph
2, the following information:
1. Copy of Addenda or Side Letters to Subcustodian Agreements
2. Legal Opinion, if available, with regard to:
a) Access to books and records by the Trust's accountants
b) Ability to recover assets in the event of bankruptcy of a custodian
c) Ability to recover assets in the event of a loss
d) Likelihood of expropriation or nationalization, if available
e) Ability to repatriate or convert cash or cash equivalents
3. Audit Report
4. Copy of Balance Sheet from Annual Report
5. Country Profile Matrix containing market practice for:
a) Delivery versus payment
b) Settlement method
c) Currency restrictions
d) Buy-in practice
e) Foreign ownership limits
f) Unique market arrangements
November 2006
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APPENDIX D
Green Century Funds
Fee Schedule
Effective November 28, 2006
The following basis point fee will apply to each Fund listed on Appendix A
hereto, for which The Bank performs Fund Accounting & Custody:
DOMESTIC CUSTODY, FUND ACCOUNTING & CALCULATION OF X.X.X.
X. Domestic Custody, Fund Accounting & Calculation of N.A.V.
. The following basis point fee is based on all domestic assets for which
we are custodian and fund accountant. This amount does not include
transactions. See Standard Transaction Costs (B). These amounts will be
calculated monthly as of the last calendar day of the month.
Annual Fee
----------------
First $150mm in assets 7.0 Basis Points
Assets in excess of $150 mm 4.0 Basis Points
There will be a monthly minimum of $3,166.67 per Fund for the Green Century
Funds.
B. Transaction Costs
. DTC/Fed Book Entry $12
. Physical Securities 35
. Options and Futures 18
. GNMA Securities 40
. Principal Paydown 5
. Outgoing Wires 10
. Incoming Wires 8
November 2006
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OUT-OF-POCKET, BALANCE CREDITS
A. Out-of-Pocket and Other Expenses
. These charges consist of:
-Pricing & Verification Services - Micro Rental
-Printing, Delivery & Postage - Forms & Supplies
-Telephone - Support Equipment Rental
-Legal Costs - 3rd Party Review
-Proxy Tabulation - Ad Hoc Reporting
-Checkbooks - 800 Number Fees
B. Domestic Balance Credit
. We allow balance credit against fees (excluding out-of-pocket charges)
for domestic fund balances arising out of the custody relationship. The
credit is based on collected balances reduced by balances required to
support the activity charges of the accounts. The monthly earnings
allowance is equal to 75% of the 90-day T-xxxx rate.
* This fee schedule is confidential information of the parties and shall not be
disclosed to any third party without prior written consent of both parties.
Green Century Funds Green Century Capital Management, Inc.
By: /s/ Xxxxxxxx Xxxxxx /s/ Xxxxx Xxxxxxxxx
------------------------------- By: -------------------------------
Xxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx
President President
Investors Bank & Trust Company
By: /s/ Xxxxxxx XxXxxxx
-------------------------------
Xxxxxxx XxXxxxx
Managing Director
November 2006
37
