EXHIBIT 99.B8
CUSTODY AGREEMENT
BETWEEN
MANAGED SERIES INVESTMENT TRUST
AND
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
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Page
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1. Bank Appointed Custodian..............................................
2. Definitions...........................................................
2.1 Authorized Person.............................................
2.2 Board.........................................................
2.3 Security......................................................
2.4 Portfolio Security............................................
2.5 Officer's Certificate.........................................
2.6 Book-Entry System.............................................
2.7 Depository....................................................
2.8 Proper Instructions...........................................
2.9 Foreign Securities............................................
2.10 Performance Calculations......................................
3. Separate Accounts.....................................................
4. Certification as to Authorized Persons................................
5. Custody of Cash.......................................................
5.1 Purchase of Securities........................................
5.2 Redemptions...................................................
5.3 Distributions and Expenses of the Master Portfolios...........
5.4 Payment in Respect of Securities..............................
5.5 Repayment of Loans............................................
5.6 Repayment of Cash.............................................
5.7 Foreign Exchange Transactions.................................
5.8 Other Authorized Payments.....................................
5.9 Termination...................................................
6. Securities............................................................
6.1 Segregation and Registration..................................
6.2 Voting and Proxies............................................
6.3 Corporate Action..............................................
6.4 Book-Entry System.............................................
6.5 Use of a Depository...........................................
6.6 Use of Book-Entry System for Commercial Paper.................
6.7 Use of Immobilization Programs................................
6.8 Eurodollar CDs................................................
6.9 Options and Futures Transactions..............................
6.10 Segregated Account............................................
6.11 Interest Bearing Call or Time Deposits........................
6.12 Transfer of Securities........................................
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Page
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7. Redemptions.........................................................
8. Merger, Dissolution, etc. of the Trust or a Master Portfolio........
9. Actions of the Bank Without Prior Authorization.....................
10. Collections and Defaults............................................
11. Maintenance of Records and Accounting Services......................
12. Master Portfolio Evaluation and Performance Calculation.............
12.1 Master Portfolio Evaluation...................................
12.2 Performance Calculations......................................
13. Concerning the Bank.................................................
13.1 Bank Warranty.................................................
13.2 Standards of Care and Performance of Duties...................
13.3 Agents and Sub-custodians with Respect to Property
of the Master Portfolios held in the United States............
13.4 Duties of the Bank with Respect to Property
Held Outside of the United States.............................
13.5 Insurance.....................................................
13.6 Fees and Expenses of Bank.....................................
13.7 Advances by Bank..............................................
14. Termination.........................................................
15. Confidentiality.....................................................
16. Notices.............................................................
17. Amendments..........................................................
18. Parties.............................................................
19. Governing Law.......................................................
20. Counterparts........................................................
21. Limitations of Liability............................................
22. Single Agreement....................................................
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CUSTODY AGREEMENT
AGREEMENT made as of this ____ day of October, 1996, between MANAGED
SERIES INVESTMENT TRUST, a Delaware business trust (the "Trust"), and INVESTORS
BANK & TRUST COMPANY (the "Bank" or, at times, "IBT").
The Trust, an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), on behalf of the
individual Master Portfolios listed on Schedule A hereto, as such Schedule may
be amended from time to time, desires to place and maintain all of the Master
Portfolios' portfolio securities and other assets including cash in the custody
of the Bank, and the Bank has indicated its willingness to so act, subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Trust hereby appoints the Bank as
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custodian of the Master Portfolios' portfolio securities and cash delivered to
the Bank as hereinafter described, and the Bank agrees to act as such upon the
terms and conditions hereinafter set forth.
2. Definitions. Whenever used herein, the terms listed below will
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have the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons
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duly authorized to give Proper Instructions or otherwise act on behalf of the
Trust and its Master Portfolios by appropriate resolution of the Board of
Trustees of the Trust, and set forth in a certificate as required by Section 4
hereof.
2.2 Board. Board will mean the Trust's Board of Trustees .
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2.3 Security. The term security as used herein will have the same
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meaning as when such term is used in the Securities Act of 1933, as amended (the
"1933 Act"), including, without limitation, any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit sharing agreement, collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security, certificate of deposit, or
group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege entered into on
a national securities exchange relating to a foreign currency, or, in general,
any interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to, or option contract to
purchase or sell any of the foregoing, and futures, forward contracts and
options thereon.
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2.4 Portfolio Security. Portfolio Security will mean any security
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owned by a Master Portfolio of the Trust.
2.5 Officer's Certificate. Officer's Certificate will mean, unless
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otherwise indicated, any request, direction, instruction, or certification in
writing signed by an Authorized Person of the Trust.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
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Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor(s) and its nominee(s).
2.7 Depository. Depository shall mean The Depository Trust Company
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("DTC") and any other clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and its successor(s) and its nominee(s). The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor(s) and its nominee(s),
specifically identified in a certified copy of a resolution of the Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
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instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the 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
or by facsimile. The Bank shall act upon and comply with any subsequent Proper
Instruction which modifies a prior instruction, and the sole obligation of the
Bank with respect to any follow-up or confirmatory instruction shall be to make
reasonable efforts to detect any discrepancy between the original instruction
and such confirmation and to report such discrepancy to the Trust. The Trust
shall be responsible, at the expense of the applicable Master Portfolio, 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 Officer's 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 electromechanical or electronic devices provided that the Trust
and the Bank are satisfied that such procedures afford adequate safeguards for a
Master Portfolio's assets.
2.9 Foreign Securities. The term Foreign Securities as used herein
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will have the same meaning as when such term is used in Rule 17f-5 of the 1940
Act.
2.10 Performance Calculations. Performance Calculations as used
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herein shall include standard performance calculations required pursuant to the
1933 Act, the 1940 Act, and any applicable rules and interpretations of the
staff of the Securities and Exchange Commission, and shall also include other
non-standard performance calculations as shall be agreed upon by both parties to
this Agreement from time to time.
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3. Separate Accounts. The Bank will segregate the assets of each Master
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Portfolio to which this Agreement relates into a separate account for each such
Master Portfolio containing the assets of such Master 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 Master
Portfolios, any reference in this Agreement to any assets of the Trust,
including, without limitation, any Portfolio Securities and other assets
including cash and any earnings thereon, shall be deemed to refer only to assets
of the applicable Master Portfolio, any duty or obligation of the Bank hereunder
to the Trust shall be deemed to refer to duties and obligations with respect to
the individual Master Portfolios, and any obligation or liability of the Trust
hereunder shall be binding only with respect to the individual Master Portfolio
and shall be discharged only out of the assets of such Master Portfolio.
4. Certification as to Authorized Persons. The Secretary or an Assistant
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Secretary 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
Board, it being understood that upon the occurrence of any change in the
information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or an
Assistant Secretary of the Trust, will sign a new or amended certification
setting forth the change of the new, additional or omitted names or signatures.
The Bank will be entitled to rely and act upon any Officer's Certificate given
to it by the Trust that has been signed by Authorized Persons named in the most
recent certification received by the Bank.
5. Custody of Cash. As custodian, the Bank will open and maintain a
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separate account or accounts in the name of each Master Portfolio or in the name
of the Bank, as custodian of the Master Portfolios, and will deposit to the
account of a Master Portfolio all of the cash of the Master Portfolio, except
for cash held by a sub-custodian appointed pursuant to subsections 13.3 or 13.4
hereof, including borrowed funds, delivered to the Bank, subject only to draft
or order by the Bank acting pursuant to the terms of this Agreement. Upon
receipt by the Bank of Proper Instructions (which may be continuing
instructions) or in the case of payments for redemptions and repurchases of
outstanding interests of a Master Portfolio, notification from the Master
Portfolio'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 Master Portfolio, insofar as
funds are available for that purpose, only as permitted in subsections 5.1-5.9
below.
5.1 Purchase of Securities. Upon the purchase of securities for a
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Master Portfolio, against contemporaneous receipt of such securities by the
Bank, or against delivery of such securities to the Bank, in accordance with
generally accepted settlement practices or customs in the jurisdiction or market
in which the transaction occurs, such securities to be registered in the name of
the Master Portfolio or in the name of, or properly endorsed and in form for
transfer to, the Bank, or a nominee of the Bank, or receipt for the account of
the Bank pursuant to the provisions of Section 6 below, each such payment to be
made at the purchase price shown on a
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broker's confirmation (or transaction report in the case of Book Entry Paper) of
purchase of the securities that is received by the Bank before such payment is
made and that has been confirmed in the Proper Instructions also received by the
Bank before such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
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repurchase or redemption of interests of a Master Portfolio offered for
repurchase or redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of the Master Portfolios. For the
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payment on the account of a Master Portfolio of dividends or other distributions
to interestholders as may from time to time be declared by the Board, interest,
taxes, investment advisory or administration fees, and, as and to the extent
provided on Schedule B hereto, any fees of the Bank for its services hereunder
and any reimbursement of the expenses and liabilities of the Bank related to
such services with respect to a Master Portfolio of the Trust as provided
pursuant to subsection 13.6 hereunder and on Schedule B hereto.
5.4 Payment in Respect of Securities. For payments in connection with
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the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by a Master Portfolio held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to a Master
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Portfolio, 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 delivered to a Master
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Portfolio for the purpose of collateralizing the obligation to return to a
Master Portfolio certificates borrowed from the Master Portfolio representing
Portfolio Securities, but only upon redelivery to the Bank of such borrowed
certificates.
5.7 Foreign Exchange Transactions. For payments in connection with
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foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery ("Foreign Exchange Agreements") that may be entered
into by the Bank on behalf of a Master Portfolio upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or banking
institution (which may be the Bank, or any other sub-custodian or agent
hereunder, acting as principal) with which the contract or option is made, and
the Bank shall have no duty with respect to the selection of such currency
brokers or banking institutions with which a Master Portfolio deals or for their
failure to comply with the terms of any contract or option.
5.8 Other Authorized Payments. For other authorized transactions of a
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Master Portfolio, or other obligations of a Master Portfolio incurred for proper
purposes with respect to a Master Portfolio; provided that before making any
such payment, the Bank also will receive Proper Instructions or a certified copy
of a resolution of the Board signed by an Authorized Person (other than the
Person certifying such resolution) and certified by its Secretary or Assistant
Secretary, naming the person or persons to whom such payment is to be made, and
either describing the transaction for which payment is to be made and declaring
it to be an authorized transaction of a Master Portfolio, or specifying the
amount of the obligation for which payment is
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to be made, setting forth the purpose for which such obligation was incurred and
declaring such purpose to be a proper corporate purpose.
5.9 Termination. Upon the termination of this Agreement as
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hereinafter set forth pursuant to Section 8 and Section 14 of this Agreement.
6. Securities.
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6.1 Segregation and Registration. Except as otherwise provided
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herein, and except for Portfolio Securities to be delivered to any sub-custodian
appointed pursuant to subsections 13.2 or 13.3 hereof, the Bank as custodian,
will receive and hold pursuant to the provisions hereof, in a separate account
or accounts and physically segregated at all times from those of other persons,
any and all Portfolio Securities which may now or hereafter be delivered to it
by or for the account of a Master Portfolio. 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 Officer's Certificate),
in the name of a registered nominee of the Bank as defined in the Internal
Revenue Code and any Regulations of the Treasury Department issued thereunder,
and will execute and deliver all such certificates in connection therewith as
may be required by such laws or regulations or under the laws of any state. The
Bank will use its best efforts to the end that the specific Portfolio Securities
held by it hereunder will be at all times identifiable.
The Trust, on behalf of a Master Portfolio, will from time to time
furnish to the Bank appropriate instruments to enable it to hold or deliver in
proper form for transfer, or to register in the name of its registered nominee,
any Portfolio Securities which may from time to time be registered in the name
of a Master Portfolio
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
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will vote any of the Portfolio Securities held hereunder, except in accordance
with Proper Instructions or an officers' Certificate. The Bank will execute and
deliver, or will cause to be executed and delivered, to the Trust or its
designated agent all notices, proxies and proxy soliciting materials with
respect to such Portfolio Securities, but without indicating the manner in which
such proxies are to be voted, such proxy to be executed by the registered holder
of such Portfolio Securities (if registered otherwise than in the name of a
Master Portfolio), in accordance with the Proper Instructions or an Officer's
Certificate.
6.3 Corporate Action. If at any time the Bank is notified that an
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issuer of a Portfolio Security has taken or intends to take a corporate action
(a "Corporate Action") that affects the rights, privileges, powers, preferences,
qualifications or ownership of the Portfolio Security, including, without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which 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's designee, Barclays Global Fund Advisors ("BGFA"), promptly of
the Corporate Action, the Response required in
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connection with the Corporate Action, and the Bank's deadline for receipt from
the Trust's designee, BGFA, of Proper Instructions regarding the Response (the
"Response Deadline"). Except as provided in subsection 6.3(c) below, the date
specified as the Response Deadline shall not be more than 24 hours prior to the
Response expiration day set by the depository processing such Corporate Action.
The Bank shall forward to the Trust's designee, BGFA, via facsimile and/or
overnight courier all notices, information statements or other materials
relating to the Corporate Action within twenty-four (24) hours of receipt of
such materials by the Bank.
(a) The Bank shall act upon a required Response only after receipt by
the Bank of Proper Instructions from the Trust's designee, BGFA, no later than
4:00 p.m. (Pacific time) on the date specified as the Response Deadline and only
if the Bank (or its agent or sub-custodian hereunder) has actual possession of
all Portfolio Securities (but only if such Portfolio Securities are necessary
for the consummation of the Corporate Action ("Necessary Portfolio
Securities")), consents and other materials no later than 4:00 p.m. (Pacific
time) on the date specified as the Response Deadline. Portfolio Securities in
the possession of a broker or other borrower pursuant to the Bank's securities
lending program shall be deemed to be in the possession of the Bank for the
purposes of this subsection 6.3.
(b) The Bank shall have no duty to act upon a required Response if
Proper Instructions relating to such Response and all Necessary Portfolio
Securities, consents and other materials are not received by and in the
possession of the Bank no later than 4:00 p.m. (Pacific time) on the date
specified as the Response Deadline. Notwithstanding, the Bank may, in its sole
discretion, use its best efforts to act upon a Response for which Proper
Instructions and/or Necessary Portfolio Securities, consents or other materials
are received by the Bank after 4:00 p.m. (Pacific time) on the date specified as
the Response Deadline, it being acknowledged and agreed by the parties that any
undertaking by the Bank to use its best efforts in such circumstances shall in
no way create any duty upon the Bank to complete such Response prior to its
expiration.
(c) In the event that the Trust's designee, BGFA, notifies the Bank
of a Corporate Action requiring a Response and the Bank has received no other
notice of such Corporate Action, the Response Deadline shall be 48 hours prior
to the Response expiration time set by the depository processing such Corporate
Action.
(d) Subsection 13.4(g) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by a Selected Foreign Sub-
custodian.
6.4 Book-Entry System. Provided (i) the Bank has received a certified
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copy of a resolution of the Board specifically approving deposits of a Master
Portfolio assets in the Book-Entry System, and (ii) for any subsequent changes
to such arrangements following such approval, the Board has reviewed and
approved the arrangement and has not delivered an Officers Certificate to the
Bank indicating that the Board has withdrawn its approval:
(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
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its agent) in such System that shall not include any assets of the Bank (or such
agent) other than assets held as a fiduciary, custodian, or otherwise for
customers:
(b) The records of the Bank (and any such agent) with respect to a
Master Portfolio's participation in the Book-Entry System through the Bank (or
any such agent) will identify by book entry Portfolio Securities that are
included with other securities deposited in the Account and shall at all times
during the regular business hours of the Bank (or such agent) be open for
inspection by duly authorized officers, employees or agents of the Trust. Where
securities are transferred to a Master Portfolio's account, the Bank shall also,
by book entry or otherwise, identify as belonging to the Master Portfolio a
quantity of Portfolio Securities in a fungible bulk of securities (i) registered
in the name of the Bank or its nominee, or (ii) shown on the Bank's account on
the books of the Federal Reserve Bank;
(c) The Bank (or its agent) shall pay for securities purchased for
the account of a Master Portfolio or shall pay cash collateral against the
return of Portfolio Securities loaned by a Master Portfolio 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 Master
Portfolio. The Bank (or its agent) shall transfer Portfolio Securities sold or
loaned for the account of a Master Portfolio upon:
(i) receipt of advice from the Book-Entry System that payment for
securities sold or payment of the initial cash collateral against the delivery
of Portfolio Securities loaned by the Master Portfolio has been transferred to
the Account: and
(ii) the making of an entry on the records of the Bank (or its agent)
to reflect such transfer and payment for the account of a Master Portfolio.
Copies of all advices from the Book-Entry System of transfers of Portfolio
Securities for the account of a Master Portfolio shall identify the Master
Portfolio, be maintained for the Master Portfolio by the Bank and shall be
provided to the Master Portfolio at its request. The Bank shall send a Master
Portfolio a confirmation, as defined by Rule 17f-4 of the 1940 Act, of any
transfers to or from the account of the Master Portfolio;
(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;
(e) The Bank shall be liable to the Trust and a Master Portfolio for
any loss or damage to the Master Portfolio resulting from use of the Book-Entry
System by reason of any negligent actions or inactions of the Bank or any of its
agents or of any of its or their employees, or from any failure by the Bank or
any such agent to use its best efforts to enforce such rights as it may have
against the Book-Entry System; at the election of the Master Portfolio, it shall
be entitled to be subrogated for the Bank in any claim against the Book-Entry
System or any other person that the Bank or its agent may have as a consequence
of any such loss or damage if and to the extent that the Master Portfolio has
not been made whole for any loss or damage;
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6.5 Use of a Depository. Provided (i) the Bank has received a
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certified copy of a resolution of the Board specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and remit
to the Bank on behalf of a Master Portfolio all income and other payments
thereon and to take all steps necessary and proper in connection with the
collection thereof;
(b) Registration of Portfolio Securities may be made in the name
of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made through the
clearing medium employed by such Depository for transactions of participants
acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the securities to or for the account of a Master
Portfolio and the Master Portfolio shall pay cash collateral against the return
of Portfolio Securities loaned by the Master Portfolio only upon delivery of the
Securities to or for the account of the Master Portfolio; and upon any sale of
Portfolio Securities, delivery of the Securities will be made only against
payment thereof or, in the event Portfolio Securities are loaned, delivery of
Securities will be made only against receipt of the initial cash collateral to
or for the account of the Master Portfolio: and
(d) The Bank shall be liable to a Master Portfolio for any loss or
damage to a Master Portfolio resulting from use of a Depository by reason of any
negligent actions or inactions of the Bank or its employees or from any failure
by the Bank to use its best efforts to enforce such rights as it may have
against a Depository. In this connection, the Bank shall use its best efforts
to ensure that:
(i) The Depository obtains replacement of any certificated Portfolio
Security deposited with it in the event such Security is lost, destroyed,
wrongfully taken or otherwise not available to be returned to the Bank upon its
request;
(ii) Any proxy materials received by a Depository with respect to
Portfolio Securities deposited with such Depository are forwarded immediately to
the Bank for voting in accordance with subsection 6.2 above;
(iii) Such Depository immediately forwards to the Bank confirmation
of any purchase or sale of Portfolio Securities and of the appropriate book
entry made by such Depository to a Master Portfolio'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
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necessary for the a Master Portfolio 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 and the Trust 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. Provided (i) the
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Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that a Master Portfolio has purchased such Issuer's
Book-Entry Paper, the Bank shall issue and hold in book-entry form, on behalf of
the Master Portfolio, commercial paper issued by issuers with whom the Bank has
entered into a book-entry agreement (the "Issuers"). In maintaining its
procedures for Book-Entry Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by a Master
Portfolio in an account of the Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect to a Master Portfolio's
purchase of Book-Entry Paper through the Bank will identify, by book-entry,
commercial paper belonging to the Master Portfolio that is included in the Book-
Entry Paper System and shall at all times during the regular business hours of
the Bank be open for inspection by duly authorized officers, employees or agents
of the Trust;
(c) The Bank shall pay for Book-Entry Paper purchased for the account
of a Master Portfolio 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 Master Portfolio;
(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 Master Portfolio, and (ii) the
making of an entry on the records of the Bank to reflect such payment for the
account of the Master Portfolio;
(e) The Bank shall transmit to the Trust a transaction journal
confirming each transaction in Book-Entry Paper for the account of a Master
Portfolio on the next business day following the transaction: and
(f) The Bank will send to the Trust such reports on its system of
internal accounting control with respect to Book-Entry Paper as the Trust may
reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has
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received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio
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Securities in an immobilization program operated by a bank which meets the
requirements of Section 26(a)(1) of the 1940 Act, and (ii) for each year
following such approval the Board has reviewed and approved the arrangement and
has not delivered an Officer's Certificate to the Bank indicating that the Board
has withdrawn its approval, the Bank shall enter into such immobilization
program with such bank acting as a sub-custodian hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities that are Eurodollar CDs
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may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to a Master Portfolio and that the books of the Bank identify the European
Branch holding such Portfolio Securities. Notwithstanding any other provision
of this Agreement to the contrary, except as stated in the first sentence of
this subsection 6.8, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to a Master Portfolio, and the Bank shall have no
liability to the Master Portfolio or its interestholders with respect to the
actions, inactions, whether negligent or otherwise of such European Branch in
connection with such Eurodollar CDs, except for any loss or damage to the Master
Portfolio resulting from the Bank's own negligent actions or inactions or lack
of reasonable care in the performance of its duties hereunder.
6.9 Options and Futures Transactions.
---------------------------------
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or Over-
the Counter.
(i) The Bank shall take action as to put options ("puts") and call
options ("calls") purchased or sold (written) by a Master Portfolio regarding
escrow or other arrangements in accordance with the provisions of any agreement
entered into upon receipt of Proper Instructions between the Bank, any broker-
dealer registered under the Exchange Act and a member of the National
Association of Securities Dealers, Inc. (the "NASD"), and, if necessary, the
Trust, on behalf of the Master Portfolio, relating to the compliance with the
rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations.
(ii) Unless another agreement requires it to do so, the Bank shall be
under no duty or obligation to see that a Master Portfolio 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 a Master Portfolio, 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: (1) periodically check
or notify a Master Portfolio that the amount of such collateral held by a broker
or held in a Segregated Account is sufficient to protect such broker or the
Master Portfolio against any loss; (2) effect the return of any collateral
delivered to a broker; or (3) advise the
10
Master Portfolio that any option it holds, has or is about to expire. Such
duties or obligations shall be the sole responsibility of a Trust.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action, upon receipt of Proper Instructions,
as to puts, calls and futures contracts ("futures") purchased or sold by a
Master Portfolio in accordance with the provisions of any agreement among the
Trust, on behalf of a Master Portfolio, the Bank and a Futures Commission
Merchant registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or any Contract
Market, or any similar organization(s), regarding account deposits in connection
with transactions by the Master Portfolio.
(ii) The responsibilities and liabilities of the Bank as to futures,
puts and calls traded on commodities exchanges, any Futures Commission Merchant
account and the Segregated Account shall be limited as set forth in subparagraph
(a)(ii) of this subsection 6.9 as if such subparagraph referred to Futures
Commission Merchants rather than brokers, and futures and puts and calls thereon
instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
------------------
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of a Master Portfolio, into which Account or Accounts may be transferred
upon receipt of Proper Instructions, cash and/or Portfolio Securities.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account in the following circumstances, upon receipt of Proper
Instructions:
(i) in accordance with the provisions of any agreement among the
Trust, on behalf of a Master Portfolio, the Bank and a broker-dealer registered
under the Exchange Act and a member of the NASD or any Futures Commission
Merchant registered under the Commodity Exchange Act, relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange or the Commodity Futures Trading Commission or any
registered Contract Market, or of any similar organizations regarding escrow or
other arrangements in connection with transactions by a Master Portfolio;
(ii) for the purpose of segregating cash or Securities in connection
with options purchased or written by a Master Portfolio or commodity futures
purchased or written by a Master Portfolio;
(iii) for the deposit of liquid assets, such as cash, U.S. Government
obligations or other high-grade debt obligations, having a market value (marked-
to-market on a daily basis) at all times equal to not less than the aggregate
purchase price due on the settlement dates of all a Master Portfolio's then
outstanding forward commitment or "when-issued agreements relating to the
purchase of Portfolio Securities and all a Master Portfolio's then outstanding
commitments under any reverse repurchase agreements entered into with broker-
dealer firms;
11
(iv) for the purposes of compliance by a Master Portfolio with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper corporate purposes, but only, in the case of
this clause (v), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the Executive Committee,
signed by an officer of the Trust and certified by the Secretary or an Assistant
Secretary, setting forth the purpose(s) of such Segregated Account and declaring
such purpose(s) to be a proper corporate purpose(s).
(b) assets may be withdrawn from the Segregated Account pursuant
to Proper Instructions only:
(i) with respect to assets deposited in accordance with the
provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;
(ii ) with respect to assets deposited pursuant to (a)(iii) or
(a)(iv) above, for sale or delivery to meet a Master Portfolio's obligations
under outstanding forward-commitment, delayed-settlement or when-issued
agreements for the purchase of Portfolio Securities and under reverse repurchase
agreements;
(iii) for exchange for other liquid assets of equal or greater
value deposited in the Segregated Account;
(iv) to the extent that a Master Portfolio's outstanding forward-
commitment or when-issued agreements for the purchase of portfolio securities or
any reverse repurchase agreements are sold to other parties or the Master
Portfolio's obligations thereunder are met from assets of the Master Portfolio
other than those in the Segregated Account;
(v) for delivery upon settlement of a forward-commitment, delayed-
settlement or when-issued agreement for the sale of Portfolio Securities: or
(vi) with respect to assets deposited pursuant to (a)(v) above, in
accordance with the purposes of such account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
--------------------------------------
receipt of Proper Instructions relating to the purchase by a Master Portfolio of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank(s) as shall be indicated in such
Proper Instructions. The Bank shall include in its records with respect to the
assets of a Master Portfolio appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the "Deposit
Bank"), and shall retain such forms of advice or receipt evidencing the deposit,
if any, as may be forwarded to the Bank by the Deposit Bank. Such deposits
shall be deemed Portfolio Securities of a Master Portfolio 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 Master
Portfolio.
12
6.12 Transfer of Securities. The Bank will transfer, exchange,
----------------------
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section, the Bank will
receive Proper Instructions requesting such transfer, exchange or delivery
stating that it is for a purpose permitted under the terms of this subsection
6.12, specifying the applicable subsection, or describing the purpose of the
transaction with sufficient particularity to permit the Bank to ascertain the
applicable subsection, only:
(a) upon sales of Portfolio Securities for the account of a Master
Portfolio, against contemporaneous receipt by the Bank of payment therefor in
full, or against payment to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale of the Portfolio Securities received by
the Bank before such payment is made, as confirmed in the Proper Instructions
received by the Bank before such payment is made;
(b) in exchange for, or upon conversion into, other securities alone
or other securities and cash pursuant to any plan of merger, consolidation,
reorganization, share split-up, change in par value, recapitalization or
readjustment or otherwise, upon exercise of subscription, purchase or sale or
other similar rights represented by such Portfolio Securities, or for the
purpose of tendering shares in the event of a tender offer therefor, provided
however that in the event of an offer of exchange, tender offer, or other
exercise of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender in a
timely manner unless such Proper Instructions are received by the Bank at least
two business days prior to the date required for tender, and unless the Bank (or
its agent or sub-custodian hereunder) has actual possession of such Portfolio
Security at least two business days prior to the date of tender
(c) upon conversion of Portfolio Securities pursuant to their
terms into other securities;
(d) for the purpose of redeeming in kind interests of a Master
Portfolio upon authorization from the Master Portfolio;
(e) in the case of option contracts owned by a Master Portfolio,
for presentation to the endorsing broker;
(f) when such Portfolio Securities are called, redeemed or retired
or otherwise become payable;
(g) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to a Master
Portfolio by any bank, including the Bank; provided, however, that such
Securities will be released only upon payment to the Bank for the account of the
Master Portfolio of the moneys borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, and such fact is made
to appear in the Proper Instructions, further Portfolio Securities may be
released for that purpose
13
without any such payment. In the event that any such pledged Portfolio
Securities are held by the Bank, they will be so held for the account of the
lender, and after notice to the Master Portfolio from the lender in accordance
with the normal procedures of the lender, that an event of deficiency or default
on the loan has occurred, the Bank may deliver such pledged Portfolio Securities
to or for the account of the lender,
(h) for the purpose of releasing certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market value
of such security, as set forth in the Proper Instructions received by the Bank
before such payment is made;
(i) for the purpose of delivering Portfolio Securities lent by a
Master Portfolio 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 Master Portfolio and
the Bank, and upon receipt of payment in connection with any repurchase
agreement relating to such Securities entered into by the Master Portfolio;
(j) for other authorized transactions of a Master Portfolio or for
other proper corporate purposes; provided that before making such transfer, the
Bank will also receive a certified copy of resolutions of the Board, signed by
an authorized officer of the Trust (other than the officer certifying such
resolution) and certified by its Secretary or an Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Master Portfolio or such purpose to be a proper
corporate purpose, and naming the person or persons to whom delivery of such
Securities shall be made; and
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 14 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (e), (f), (g), (h) and (i) securities or cash receivable in exchange
therefor shall be delivered to the Bank.
7. Redemptions. In the case of payment of assets of a Master Portfolio
-----------
held by the Bank in connection with redemptions and repurchases by the Master
Portfolio of outstanding interests, the Bank will rely on notification by the
Trust's transfer agent of receipt of a request for redemption before such
payment is made. Payment shall be made in accordance with the Amended and
Restated Declaration of Trust (the "Trust Declaration") and By-Laws of the
Trust, from assets available for said purpose.
8. Merger Dissolution etc. of the Trust or a Master Portfolio. In the case
----------------------------------------------------------
of the following transactions, not in the ordinary course of business, namely,
the merger of a Master Portfolio into or the consolidation of the Trust with
another investment company, the sale by the Trust of all, or substantially all,
of the assets of one or more Master Portfolios to another investment company, or
the liquidation or dissolution of a Master Portfolio and distribution of its
assets, the Bank will deliver the Portfolio Securities held by it under this
Agreement and disburse cash only upon the order of the Trust, on behalf of such
Master Portfolio(s) set forth in an Officer's Certificate, accompanied by a
certified copy of a resolution of the Board authorizing any
14
of the foregoing transactions. Upon completion of such delivery and disbursement
and the payment of the fees, disbursements and expenses of the Bank, this
Agreement will terminate with respect to such Master Portfolio or Trust, as
applicable.
9. Actions of the Bank Without Prior Authorization. Notwithstanding
-----------------------------------------------
anything herein to the contrary, unless and until the Bank receives an Officer's
Certificate to the contrary, it will without prior authorization or instruction
of the Trust or the transfer agent:
(a) Endorse for collection and collect on behalf of and in the name
of a Master Portfolio 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 Master Portfolio and hold for the account of the Master Portfolio
all income, dividends, interest and other payments or distributions of cash with
respect to the Portfolio Securities held thereunder;
(b) Present for payment all coupons and other income items held by it
for the account of a Master Portfolio that call for payment upon presentation
and hold the cash received by it upon such payment for the account of the Master
Portfolio;
(c) Receive and hold for the account of a Master Portfolio all
securities received as a distribution on Portfolio Securities as a result of a
stock dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
(d) execute as agent on behalf of a Master Portfolio all necessary
ownership and other certificates and affidavits required by the Internal Revenue
Code or the regulations of the Treasury Department issued thereunder, or by the
laws of any state, now or hereafter in effect, inserting a Master Portfolio's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so and as may be required to obtain payment in respect
thereof. The Bank will execute and deliver such certificates in connection with
Portfolio Securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, or under the laws of any State;
(e) present for payment all Portfolio Securities that are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of a Master Portfolio; and
(f) exchange interim receipts or temporary securities for
definitive securities.
10. Collections and Defaults. The Bank will use all reasonable efforts to
------------------------
collect any funds that may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Trust, on behalf of a Master Portfolio, notice actually received
by the Bank of any call for redemption, offer of exchange, right of
subscription, reorganization or other proceedings affecting such Portfolio
Securities. If Portfolio Securities upon which such income is payable are in
default or payment is refused after due demand or presentation, the Bank will
notify the Trust, on behalf of a Master Portfolio, in writing
15
of any default or refusal to pay within two business days from the day on which
it receives knowledge of such default or refusal. In addition, the Bank will
send the Trust a written report once each month showing any income on any
Portfolio Security held by Bank on behalf of a Master Portfolio that is more
than ten days overdue on the date of such report.
11. Maintenance of Records and Accounting Services. The Bank will
----------------------------------------------
maintain records with respect to transactions for which the Bank is responsible
pursuant to the terns and conditions of this Agreement, and in compliance with
the applicable rules and regulations of the 1940 Act and will furnish the Trust
daily with a statement of condition of each Master Portfolio. The Bank will
furnish to the Trust at the end of every month, and at the close of each quarter
of the Trust's fiscal year, a list of the Portfolio Securities and the aggregate
amount of cash held by Bank on behalf of each Master Portfolio. 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 the fund accounting services listed on Schedule
C hereto and shall keep the books of account and render statements or copies
from time to time as reasonably requested by the Treasurer or any executive
officer of the 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. Master Portfolio Evaluation and Performance Calculations.
---------------------------------------------------------
12.1 Master Portfolio Evaluation. The Bank shall compute and, unless
---------------------------
otherwise directed by the Board, determine as of the close of regular trading on
the New York Stock Exchange on each day on which said Exchange is open for
unrestricted trading and as of such other days, or hours, if any, as may be
authorized by the Board, the net asset value and the offering price of an
interest of each Master Portfolio, such determination to be made in accordance
with the provisions of the Trust Declaration and By-Laws and Registration
Statement of the Trust relating to the Master Portfolios, as it may from time to
time be amended, and any applicable resolutions of the Board at the time in
force and applicable; and promptly to notify the Trust, any applicable exchange,
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 that the Bank reasonably believes
to be accurate and reliable furnished to it by any Authorized Person in respect
of (i) the manner of accrual of the liabilities of each Master Portfolio and in
respect of liabilities of a Master 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 offering price on the basis of the net asset value of the
interests, and the Bank shall not be responsible for any loss occasioned by its
16
reasonable and good faith reliance on any quotations received from a source
pursuant to (iii) above.
12.2. Performance Calculations. The Bank will compute the performance
------------------------
results of each Master Portfolio (the "Performance Calculations") in accordance
with applicable provisions of the 1933 Act and 1940 Act and the rules under such
Acts related to the computations to be undertaken by the Bank pursuant to this
Agreement, as promulgated by the Securities and Exchange Commission, as such
provisions and or rules may be amended from time to time, and any published
interpretations of or general conventions accepted by the staff of the
Securities and Exchange Commission with respect to such rules or the subject
matter thereof ("Subsequent Staff Positions"), subject to the Registration
Statement, as amended from time to time, and the terms set forth below:
(a) The Bank shall compute the Performance Calculations for each
Master 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 Performance Calculations, the Bank will derive
from the records it generates and maintains for each Master Portfolio pursuant
Section 11 hereof, the data necessary for the computation. The Bank shall have
no responsibility to review, confirm, or otherwise assume any duty or liability
with respect to the accuracy or correctness of any such data supplied to it by
the Trust, any of the its designated agents or any of its 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 pursuant to the
rules or any Subsequent Staff Positions as they specifically apply to a Master
Portfolio, provided that the Bank shall be responsible for general knowledge of
such rules and any Subsequent Staff Positions. In the event that the
computation methods in a rule or the Subsequent Staff Positions or the
application to a Master Portfolio of a standard or guideline is not free from
doubt or in the event there is any question of interpretation as to the
characterization of a particular security or any aspect of a security or a
payment with respect thereto (e.g., original issue discount, participating debt
security, income or return of capital, etc.) or otherwise or as to any other
element of the computation that is pertinent to the Master Portfolio, the Trust
or its designated agent, BGFA, shall have the full responsibility for making the
determination of how the security, or payment, is to be treated for purposes of
the computation and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to make
independent determinations with respect to any item that is covered by this
Section, and the Bank shall not be responsible for its computations made in
accordance with such determinations so long as such computations are
mathematically correct.
(d) The 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, related to the computations to be undertaken by the Bank
pursuant to this Agreement, and the Bank shall not be deemed to have
17
knowledge of such information (except as contained in the Registration
Statement) unless it has been furnished to the Bank in writing; provided that
the Bank shall be charged with knowledge of any material changes to the 1933
Act, the 1940 Act, and any related rules under such acts related to the
computations to be undertaken by the Bank pursuant to this Agreement without
specific notice from the Trust.
13. Concerning the Bank.
--------------------
13.1 Bank Warranty. The Bank warrants that it has and will maintain
-------------
at least the minimum qualifications required by Section 17(f)(1) of the 1940 Act
to act as custodian of the Portfolio Securities and other assets including cash
of the Trust's Master Portfolios.
13.2 Standard of Care and Performance of Duties.
-------------------------------------------
(a) The Bank agrees to use reasonable care with regard to its
obligations under this Agreement and the safekeeping of property of the Master
Portfolios. In performing its duties hereunder and any other duties listed on
the Schedules hereto, the Bank will be entitled to receive and act upon the
advice of independent counsel of its own selection, which may be counsel for the
Trust, and the Bank will be without liability for any action taken or thing
done, or omitted to be done, so long as the Bank's actions or inactions are
without negligence and in accordance with this Agreement in good faith in
conformity with such advice. The Bank shall be liable to, and shall indemnify
and hold harmless the Trust from and against any loss which shall occur as the
result of the failure of the Bank or a sub-custodian (other than a foreign
securities depository or clearing agency and except as provided in subsections
6.8, 13.2 and 13.3(i) hereof) to exercise reasonable care with respect to their
respective obligations under this Agreement and the safekeeping of such
property. Subject to the foregoing, the Bank will not be responsible for any
act, omission, default or for the solvency of any foreign securities depository
or clearing agency utilized in connection with the provision of services under
this Agreement.
(b) In the performance of its duties hereunder, the Bank will be
protected and not be liable, and will be indemnified and held harmless for any
action taken or omitted to be taken by it with reasonable care and in good faith
reliance upon the terms of this Agreement, any Officer's Certificate, Proper
Instructions, resolution of the Board, facsimile, telegram, notice, request,
certificate or other instrument reasonably believed by the Bank to be genuine
and for any other loss to the Fund except in the case of its negligent actions
or inactions or lack of good faith or reasonable care in the performance of its
obligations or duties hereunder.
(c) The Bank will be under no duty or obligation to inquire into
and will not be liable for:
(i) the validity of the issue of any Portfolio Securities purchased
by or for a Master Portfolio, the legality of the purchases thereof or the
propriety of the price incurred therefor;
(ii) the legality of any sale of any Portfolio Securities by or for
the Master Portfolio or the propriety of the amount for which the same are sold;
18
(iii) the legality of an issue or sale of any interests of a Master
Portfolio or the sufficiency of the amount to be received therefor;
(iv) the legality of the repurchase of any interests of a Master
Portfolio or the propriety of the amount to be paid therefor;
(v) the legality of the declaration of any dividend by a Master
Portfolio or the legality of the distribution of any Portfolio Securities as
payment in kind of such dividend; and
(vi) any property or moneys of a Master Portfolio unless and until
received by it, and any such property or moneys delivered or paid by it pursuant
to the terms hereof.
(d) Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of a Master Portfolio are such as may properly be held by the
Master Portfolio under the provisions of its Trust Declaration, By-Laws, any
federal or state statutes or any rule or regulation of any governmental agency.
(e) Notwithstanding anything in this Agreement to the contrary, in no
event shall the Bank be liable hereunder or to any third party:
(i) for any losses or damages of any kind resulting from acts of God,
earthquakes, fires, floods, storms or other disturbances of nature, epidemics,
strikes, riots, nationalization, expropriation, currency restrictions, acts of
war, civil war or terrorism, insurrection, nuclear fusion, fission or radiation,
the interruption, loss or malfunction of utilities, transportation, or computers
(hardware or software) and computer facilities, the unavailability of energy
sources and other similar happenings or events, except as results from the
Bank's own negligence, provided that the Bank shall make all reasonable efforts,
whenever necessary, to use data processing back-up facilities provided by
Electronic Data Systems, Inc.; or
(ii) for special, punitive or consequential damages arising from the
provision of services hereunder, even if the Bank has been advised of the
possibility of such damages; provided, however, that the parties specifically
acknowledge and agree that damages, if any, incurred by the Trust, its Master
Portfolios or its agents (including, but not limited to, BGFA or the Trust's
transfer or shareholder servicing agents) on account of late or incorrect net
asset values and related information provided to the Trust, its Master
Portfolios, its agents or other third parties as may be agreed in writing by BGI
and IBT from time to time, are not to be considered special, punitive or
consequential damages for purposes of this subsection 13.2(e)(ii).
(f) The Bank shall supply BGI with such daily information regarding
the cash and securities positions and activity of each Master Portfolio as the
Bank and BGI shall from time to time agree.
(g) The Bank need not maintain any insurance for the exclusive
benefit of the Trust, but hereby warrants that as of the date of this Agreement
it is maintaining a bankers
19
Blanket Bond and hereby agrees to notify the Trust in the event that such bond
is canceled or otherwise lapses.
13.3 Agents and Sub-custodians with Respect to Property of the Master
----------------------------------------------------------------
Portfolios Held in the United States. The Bank may employ agents in the
------------------------------------
performance of its duties hereunder and shall be responsible for the acts and
omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed by
one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ sub-custodians,
provided that any such sub-custodian meets at least the minimum qualifications
required by Section 17(f)(1) of the 1940 Act to act as a custodian of a Master
Portfolio's assets with respect to property of the Master Portfolio 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 sub-custodian 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
sub-custodian. Upon request of the Bank, the Trust shall assume the entire
defense of any action, suit, or claim subject to the foregoing indemnity. All
fees and expenses of any sub-custodian shall be paid in accordance with Schedule
B hereto.
13.4 Duties of the Bank with Respect to Property of the Master
---------------------------------------------------------
Portfolio Held Outside of the United States.
--------------------------------------------
(a) Appointment of Foreign Sub-custodians. The Trust hereby
-------------------------------------
authorizes and instructs the Bank to employ as sub-custodians for the Trust's
Portfolio Securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated by
the Board (each, a "Selected Foreign Sub-custodian"). Upon receipt of Proper
Instructions, together with a certified resolution of the Trust's Board of
Trustees, the Bank and the Trust may agree to designate additional foreign
banking institutions and foreign securities depositories to act as Selected
Foreign Sub-custodians hereunder. Upon receipt of Proper Instructions, the
Trust may instruct the Bank to cease the employment of any one or more such
Selected Foreign Sub-custodians for maintaining custody of a Master Portfolio's
assets, and the Bank shall so cease to employ such sub-custodian as soon as
alternate custodial arrangements have been implemented.
(b) Foreign Securities Depositories. Except as may otherwise be
-------------------------------
agreed upon in writing by the Bank and the Trust, assets of a Master Portfolio
shall be maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as Selected Foreign Sub-
custodians pursuant to the terms hereof. Where possible, such arrangements
shall include entry into agreements containing the provisions set forth in
subparagraph (d) hereof. Notwithstanding the foregoing, except as may otherwise
be agreed upon in writing by the Bank and the Trust, the Trust authorizes the
deposit in Euro-Clear, the securities clearance and depository facilities
operated by ▇▇▇▇▇▇ Guaranty Trust Company of New York in Brussels, Belgium, of
Foreign Securities eligible for deposit therein and to utilize such securities
depository in connection with settlements of purchases and sales of securities
and
20
deliveries and returns of securities, until notified to the contrary pursuant to
subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on its books
-------------------------
as belonging to a Master Portfolio the Foreign Securities held by each Selected
Foreign Sub-custodian. Each agreement pursuant to which the Bank employs a
foreign banking institution shall require that such institution establish a
custody account for the Bank and hold in that account, Foreign Securities and
other assets of the Master Portfolios, and, in the event that such institution
deposits Foreign Securities in a foreign securities depository, that it shall
identify on its books as belonging to the Bank the securities so deposited.
(d) Agreements with Foreign Banking Institutions. Each of the
--------------------------------------------
agreements pursuant to which a foreign banking institution holds assets of the
Trust's Master Portfolios (each, a "Foreign Sub-custodian Agreement") shall be
substantially in the form previously made available to the Trust and shall
provide that: (a) such assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking institution
or its creditors or agent, except a claim of payment for their safe custody or
administration (including, without limitation, any fees or taxes payable upon
transfers or reregistration of securities); (b) beneficial ownership of such
assets will be freely transferable without the payment of money or value other
than for custody or administration (including, without limitation, any fees or
taxes payable upon transfers or reregistration of securities); (c) adequate
records will be maintained identifying the assets as belonging to the Bank; (d)
officers of or auditors employed by, or other representatives of the Bank,
including to the extent permitted under applicable law, the independent auditors
for the Trust, will be given access to the books and records of the foreign
banking institution relating to its actions under its agreement with the Bank;
and (e) assets of a Master Portfolio held by the Selected Foreign Sub-custodian
will be subject only to the instructions of the Bank or its agents.
(e) Access of Independent Auditors of the Trust. Upon request of the
-------------------------------------------
Trust, the Bank will use its best efforts to arrange for the Trust's independent
auditors to be afforded access to the books and records of any foreign banking
institution employed as a Selected Foreign Sub-custodian insofar as such books
and records relate to the performance of such foreign banking institution under
its Foreign Sub-custodian Agreement.
(f) Reports by the Bank. The Bank will supply to the Trust from time
-------------------
to time, as mutually agreed upon, statements in respect of the securities and
other assets of a Master Portfolio held by Selected Foreign Sub-custodians,
including but not limited to an identification of entities having possession of
the Foreign Portfolio Securities and other assets of the Master Portfolio.
(g) Transactions in Foreign Custody Accounts. Transactions with
----------------------------------------
respect to the assets of a Master Portfolio held by a Selected Foreign Sub-
custodian shall be effected pursuant to Proper Instructions from the Trust to
the Bank and shall be effected in accordance with the applicable Foreign Sub-
custodian Agreement. If at any time any Foreign Portfolio Securities shall be
registered in the name of the nominee of the Selected Foreign Sub-custodian,
21
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.
Notwithstanding any provision of this Agreement to the contrary, settlement
and payment for Foreign Securities received for the account of a Master
Portfolio and delivery of Foreign Securities maintained for the account of a
Master Portfolio may be effected in accordance with the customary established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer.
In connection with any action to be taken with respect to the Foreign
Securities held hereunder, including, without limitation, the exercise of any
voting rights, subscription rights, redemption rights, exchange rights,
conversion rights or tender rights, or any other action in connection with any
other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Trust or
its investment adviser such information in connection therewith as is made
available to the Bank by the Foreign Sub-custodian, and the Bank shall promptly
forward to the applicable Foreign Sub-custodian any instructions, forms or
certifications with respect to such Rights, and any instructions relating to the
actions to be taken in connection therewith, as the Bank shall receive pursuant
to Proper Instructions. The Bank agrees to use its best efforts to obtain and
forward to the Trust or its designated agent, BGFA, information regarding Rights
with respect to Foreign Securities held hereunder. Notwithstanding the
foregoing, the Bank shall have no further duty or obligation with respect to
such Rights, including, without limitation, the determination of whether a
Master Portfolio 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 Master Portfolio or by the applicable
Foreign Sub-custodian will comply with all applicable terms and conditions of
any such Rights or any applicable laws or regulations, or market practices
within the market in which such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-custodians. Each Foreign Sub-
--------------------------------------------
custodian Agreement with a foreign banking institution shall require the
institution to exercise reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Bank and Trust from and against certain
losses, damages, costs, expenses, liabilities or claims arising out of or in
connection with the institution's performance of such obligations, all as set
forth in the applicable Foreign Sub-custodian Agreement. The Trust acknowledges
that the Bank, as a participant in Euroclear, is subject to the Terms and
Conditions Governing the Euroclear System, a copy of which has been made
available to the Trust. The Trust acknowledges that pursuant to such Terms and
Conditions, ▇▇▇▇▇▇ Guaranty Brussels shall have the sole right to exercise or
assert any and all rights or claims in respect of actions or omissions of, or
the bankruptcy or insolvency of, any other depository, clearance system or
custodian utilized by Euroclear in connection with a Master Portfolio's
Portfolio Securities and other assets.
(i) Liability of Bank. The Bank shall have no more or less
-----------------
responsibility or liability on account of the acts or omissions of any Selected
Foreign Sub-custodian employed
22
hereunder than any such Selected Foreign Sub-custodian has to the Bank and,
without limiting the foregoing, the Bank shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism, political
risk (including, but not limited to, exchange control restrictions,
confiscation, insurrection, civil strife or armed hostilities) other losses due
to Acts of God, nuclear incident or any loss where the Selected Foreign Sub-
custodian has otherwise exercised reasonable care.
(j) Monitoring Responsibilities. The Bank shall furnish annually to
---------------------------
the Trust, information concerning the Selected Foreign Sub-custodians employed
hereunder for use by the Trust's Board or its designated agent in evaluating
such Selected Foreign Sub-custodians to ensure compliance with the requirements
of Rule 17f-5 of the 1940 Act. In addition, the Bank will promptly inform the
Trust in the event that the Bank is notified by a Selected Foreign Sub-custodian
that there appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the equivalent thereof) or that
its shareholders' equity has declined below $200 million (in each case computed
in accordance with generally accepted U.S. accounting principles) or any other
capital adequacy test applicable to it by exemptive order, or if the Bank has
actual knowledge of any material loss of the assets of a Master Portfolio held
by a Foreign Sub-custodian.
(k) Tax Law. The Bank shall have no liability for any obligations
-------
now or hereafter imposed on the Trust, or its Master Portfolios, or the Bank as
custodian of the Trust by the tax laws of any jurisdiction. The sole
responsibility of the Bank with regard to such taxes shall be to use reasonable
efforts to assist the Trust with respect to the withholding and payment by the
Trust of such taxes and with respect to any claim for exemption or refund under
the tax law of jurisdictions for which the Trust is entitled to such exemptions
or refunds.
13.5 Insurance. The Bank shall use the same care with respect to the
---------
safekeeping of Portfolio Securities and cash of the Trust's Master Portfolios
held by it as it uses in respect of its own similar property but need not
maintain any special insurance for the benefit of the Trust.
13.6. Fees and Expenses of Bank. The Trust, on behalf of a Master
-------------------------
Portfolio, will pay or reimburse the Bank from time to time for any transfer
taxes payable upon transfer of Portfolio Securities made hereunder. All
necessary proper disbursements, expenses and charges made or incurred by the
Bank in the performance of this Agreement (including any duties listed on
Schedule C hereto) including any indemnities for any loss, liabilities or
expense to the Bank as provided above shall be paid in accordance with Schedule
B hereto, provided that the Bank shall not be entitled to compensation and/or
reimbursement for services and/or expenses and liabilities by the Trust, with
respect to the Master Portfolios, hereunder so long as the Bank is entitled to
receive compensation and reimbursements from Barclays Global Investors, N.A.
("BGI") for providing sub-administration services to the Trust on behalf of the
Master Portfolios. If the Bank no longer is entitled to receive such
compensation and reimbursements from BGI, the Bank shall be entitled hereunder
to such compensation or fees and reimbursements at such rate and at such times
as it may from time to time negotiate with the Trust, and such Schedule B shall
be amended accordingly.
23
13.7 Advances by Bank. The Bank may, in its sole discretion, advance
----------------
funds on behalf of a Master Portfolio to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments. Should such a payment or payments, with advanced funds,
result in an overdraft (due to insufficiencies of a Master 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 Master Portfolio payable
on demand and bearing interest at the current rate charged by the Bank for such
loans unless the Master Portfolio 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, in
and to any property at any time held by it for a Master Portfolio's benefit or
in which the Master Portfolio 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 its sole discretion,
at any time to charge any overdraft or indebtedness, together with interest due
thereon against any balance of account standing to the credit of a Master
Portfolio on the Bank's books.
14. Termination.
------------
(a) This Agreement shall be effective for an initial term of two (2)
years commencing upon the date hereof (the "Initial Term") unless earlier
terminated as provided in subsection (b) below. Thereafter, the Agreement may
be terminated at any time, without penalty upon sixty (60) days' written notice
delivered by either party to the other by means of registered mail, and upon the
expiration of such sixty (60) days, this Agreement will terminate; provided,
however, that the effective date of such termination may be postponed to a date
not more than ninety (90) days from the date of delivery of such notice (i) by
the Bank in order to prepare for the transfer by the Bank of all of the assets
of the Master Portfolios held hereunder, or (ii) by the Trust in order to give
it an opportunity to make suitable arrangements for a successor custodian. At
any time after the termination of this Agreement, the Bank agrees to make
available to the Trust, at its request, the records maintained by the Bank
relating to the performance of its duties as custodian and to preserve such
records for the periods prescribed in Rule 31a-2 under the 1940 Act.
(b) Notwithstanding subsection (a) above, either party hereto may
terminate this Agreement at any time prior to the expiration of the Initial Term
in the event that the other party violates any material provision of this
Agreement, provided that the violating party does not cure such violation within
ninety (90) days of receipt of written notice from the non -violating party of
such violation.
(c) Notwithstanding subsection (a) above, the Trust may terminate
this Agreement at any time prior to the expiration of the Initial Term in the
event that (i) the Board of Trustees determines that the performance of the Bank
does not meet the reasonable satisfaction (considered in light of industry
standards) of the Board of Trustees, provided that the Bank does not cure such
unsatisfactory performance within ninety (90) days of receipt of written notice
specifying such unsatisfactory performance; or (ii) if the Bank becomes the
subject of any state or federal bankruptcy proceeding that is not dismissed
within sixty (60) days of the initiation of such proceeding.
24
(d) In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Trust. The obligation of the Bank to deliver and transfer over the assets of
the Trust's Master Portfolios held by the Bank directly to such successor
custodian will commence as soon as such successor is appointed and will continue
until completed as aforesaid. If the 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 14(c), deliver
the Portfolio Securities and cash of the Trust's Master Portfolio held by the
Bank to a bank or trust company of its own selection that meets the requirements
of Section 17(f)(1) of the 1940 Act and has a reported capital, surplus and
undivided profits aggregating not less than $2,000,000, to be held as the
property of the Trust's Master Portfolios 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's
Master Portfolios with the same effect as though selected by the Board.
(e) Prior to the expiration of ninety (90) days after notice of
termination has been given, the 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
Master Portfolio's interestholders the question of whether a Master Portfolio
will be liquidated or will function without a custodian for the assets of the
Master Portfolio. In that event the Bank will deliver the Portfolio Securities
and cash of the Trust's Master Portfolios, subject as aforesaid, in accordance
with one of such alternatives that may be approved by the requisite vote of
shareholders, upon receipt by the Bank of a copy of the minutes of the meeting
of shareholders at which action was taken, certified by the Trust's Secretary
and an opinion of counsel to the Trust in form and content satisfactory to the
Bank.
15. Confidentiality. Both parties hereto agree than any non-public
---------------
information obtained hereunder concerning the other party is confidential and
may not be disclosed to any other person without the consent of the other party,
except as may be required by applicable law or at the request of a governmental
agency. The parties further agree that a breach of this provision would
irreparably damage the other party and accordingly agree that each of them is
entitled, in addition to all other remedies at law or in equity and without bond
or other security, to an injunction or injunctions to prevent breaches of this
provision.
16. Notices. Any notice or other instrument in writing authorized or
-------
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered, via registered U.S.
Mail or facsimile with written confirmation via registered U.S. Mail, to it at
its office at the address set forth below; namely:
(a) In the case of notices sent to the Trust or a Master Portfolio
to:
Managed Series Investment Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
25
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
With a copy to:
Barclays Global Investors
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇
or at such other place as such party may from time to time designate in
writing.
17. Amendments. This Agreement may not be altered or amended, except by
----------
an instrument in writing, executed by both parties, and in the case of the
Trust, such alteration or amendment will be authorized and approved by its
Board.
18. Parties. This Agreement will be binding upon and shall inure to the
-------
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Trust
without the written consent of the Bank or by the Bank without the written
consent of the Trust, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 14 hereof will not be deemed to
be an assignment within the meaning of this provision.
19. Governing Law. This Agreement and all performance hereunder will be
-------------
governed by the laws of the Commonwealth of Massachusetts.
20. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
21. Limitation of Liability. The Trust and the Bank agree that the
-----------------------
Trust's obligations under this Agreement shall not be binding upon any Trustee,
interestholder, officer, employee or agent of the Trust individually but are
binding only upon the assets and property of the appropriate Master Portfolio.
22. Single Agreement. This Agreement (including any exhibits, appendices
----------------
and schedules hereto) constitutes the entire agreement between the Bank and the
Trust as to the
26
subject matter hereof and supersedes any and all agreements, representations and
warranties, written or oral, regarding such subject matter made prior to the
time at which this Agreement has been executed and delivered between the Bank
and the Trust.
23. 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.
27
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.
Managed Series Investment Trust
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chief Operating Officer
Investors Bank & Trust Company
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Investors Bank & Trust Company
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Counsel
28
SCHEDULE A
----------
CUSTODY AGREEMENT
MANAGED SERIES INVESTMENT TRUST
LIST OF MASTER PORTFOLIOS
-------------------------
Growth Stock Master Portfolio
Short-Intermediate Term Master Portfolio
Dated: October 21, 1996
A-1
SCHEDULE B
----------
CUSTODY AGREEMENT
MANAGED SERIES INVESTMENT TRUST
IBT shall not be entitled to separate compensation from MSIT for
providing custody and fund accounting services to MSIT's Master Portfolios
pursuant to this Agreement so long as IBT is entitled to receive fees and
related expenses from BGI, pursuant to the Sub-administration Agreement between
BGI and IBT, for providing such custody and fund accounting services to MSIT's
Master Portfolios. If IBT is no longer entitled to receive such fees and
expenses under such Sub-administration Agreement, then IBT shall be entitled to
receive compensation from MSIT as IBT may from time to time negotiate with MSIT,
and this Schedule B shall be amended accordingly.
B-1
SCHEDULE C
----------
CUSTODY AGREEMENT
MANAGED SERIES INVESTMENT TRUST
FUND ACCOUNTING DUTIES
----------------------
I. A. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash and
all other debits and credits, as required by subsection (b)(1) of rule 31a-1
under the 1940 Act (the "Rule");
B. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest accrued and
interest received, as required by subsection (b)(2)(i) of the Rule;
C. Separate ledger accounts required by subsection (b) (2) (ii) and
(iii) of the Rule; and
D. A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b)(8) of the Rule.
II. All such books and records shall be the property of the Trust, and IBT
agrees to make such books and records available for inspection by the Trust or
by the Securities and Exchange Commission at reasonable times and otherwise to
keep confidential all records and other information relative to the Trust;
except when requested to divulge such information by duly constituted
authorities or court process, or when requested by the Trust.
III. In addition to the maintenance of the books and records specified
above, IBT shall perform the following accounting services daily for each Master
Portfolio;
A. Calculate the net asset value per interest;
B. Calculate changes in net asset value;
C-1
C. Calculate the per share dividend distribution rates:
D. Calculate dividends and any capital-gain distributions;
E. Calculate performance figures, including any yield or total return
and other performance figures, as appropriate;
F. Provide the following reports:
1. a current security position report;
2. a summary report of transactions and pending maturities
(including the principal cost, and accrued interest on each
portfolio security in maturity date order); and
3. a current cash position report (including cash available from
portfolio sales and maturities and sales of a Master Portfolio's
interests less cash needed for redemptions and settlement of
portfolio purchases);
G. Such other similar services with respect to a Master Portfolio as
may be reasonably requested by the Trust.
IV. IBT shall forward the information contained in Section III of this
Schedule to third-party service providers reasonably requested by the Trust, the
Co-Administrators or BGFA.
C-2