CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT is made effective the 10th day of March, 2004 by and
between STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the
laws of the Commonwealth of Massachusetts, having its principal office and place
of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State
Street"), and FIXED INCOME SHARES, a Massachusetts trust having its principal
office and place of business at 0000 Xxxxxx xx Xxxxxxxx, Xxx Xxxx, XX 00000
("Fund")
WHEREAS, Fund is a Massachusetts trust that is registered with the
Securities and Exchange Commission ("SEC") as an open-end management investment
company; and
WHEREAS, Fund desires to appoint State Street as custodian of the
assets of the Fund's investment portfolio or portfolios (each a "Portfolio") and
as the Fund's agent to perform certain investment accounting and recordkeeping
functions; and
WHEREAS, State Street is willing to accept such appointment with
respect to the Portfolio on the terms and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and appoints
State Street as:
A. Custodian of the investment securities, interests in loans and other
non-cash investment property, and monies at any time owned by the
Portfolio and delivered to State Street as custodian hereunder
("Assets"); and
B. Agent to perform certain accounting and recordkeeping functions
relating to portfolio transactions required of a duly registered
investment company under Rule 31(a) of the Investment Company Act of
1940, as amended (the "1940 Act") and to calculate the net asset value
of the Portfolio.
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to State Street:
1. That it is a trust duly organized and existing and in good standing
under the laws of its state of organization, and that it is registered
under the 1940 Act; and
2. That it has the requisite power and authority under applicable law
and its articles of incorporation or its trust instrument, as the case
may be, and its bylaws to enter into this Agreement; that it has taken
all requisite action necessary to appoint State Street as custodian
and investment accounting and recordkeeping agent, that this Agreement
has been duly executed and delivered by Fund; and that this Agreement
constitutes a legal, valid and binding obligation of Fund, enforceable
in accordance with its terms, except that such enforceability may be
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limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally, and general principles of
equity.
B. State Street hereby represents, warrants and acknowledges to Fund:
1. That it is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts; and
2. That it has the requisite power and authority under applicable law,
its charter and its bylaws to enter into and perform this Agreement;
that this Agreement has been duly executed and delivered by State
Street; and that this Agreement constitutes a legal, valid and binding
obligation of State Street, enforceable in accordance with its terms,
except that such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally, and general principles of equity.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. Delivery of Assets. Except as permitted by the 1940 Act, Fund will
deliver or cause to be delivered to State Street on the effective date
hereof, or as soon thereafter as practicable, and from time to time
thereafter, all Assets acquired by, owned by or from time to time
coming into the possession of the Portfolio during the term hereof.
State Street has no responsibility or liability whatsoever for or on
account of assets not so delivered.
B. Delivery of Accounts and Records. Fund will turn over or cause to be
turned over to State Street all accounts and records needed by State
Street to fully and properly perform its duties and responsibilities
hereunder. State Street may rely conclusively on the completeness and
correctness of such accounts and records.
C. Delivery of Assets to Third Parties. State Street will receive
delivery of and keep safely the Assets of the Portfolio segregated in
a separate account. State Street will not deliver, assign, pledge or
hypothecate any such Assets to any person except as permitted by the
provisions hereof or any agreement executed according to the terms of
Section 3.P hereof. Upon delivery of any such Assets to a subcustodian
appointed pursuant hereto (hereinafter referred to as "Subcustodian"),
State Street will create and maintain records identifying such Assets
as belonging to the Portfolio. State Street is responsible for the
safekeeping of the Assets only until they have been transmitted to and
received by other persons as permitted under the terms hereof, except
for Assets transmitted to Subcustodians, for which State Street
remains responsible to the extent provided herein. State Street may
deposit and/or maintain Portfolio securities directly or indirectly
through a subcustodian in the Depository Trust Company (DTC),
Treasury/Federal Reserve Book Entry System (Fed System), Participant
Trust Company (PTC) or other securities depository (as such entities
are defined at 17 CFR Section 270.17f-4(c)(6)) (each a "Depository"
and collectively the "Depositories") in compliance with the conditions
of Rule 17f-4 under the 1940 Act (as may be amended from time to
time). State Street shall, at a minimum, exercise due care in
accordance with reasonable commercial standards in
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discharging its duties to place and maintain Assets with a Depository.
State Street will be responsible to Fund for any loss, damage or
expense suffered or incurred by Fund resulting from the actions or
omissions of any Depository only to the same extent such Depository is
responsible to State Street. State Street shall be liable to the Fund
for any loss or damage resulting from the use of a Depository arising
by reason of any negligence, willful misconduct or bad faith on the
part of State Street or any of its officers, employees or agents.
State Street shall provide, promptly upon request by the Fund, such
reports as are available regarding its internal accounting controls
and financial strength.
D. Registration. State Street will at all times hold registered Assets in
the name of State Street as custodian, the Portfolio, or a nominee of
either of them, unless specifically directed by Instructions, as
hereinafter defined, to hold such registered Assets in so-called
"street name;" provided that, in any event, State Street will hold all
such Assets in an account of State Street as custodian containing only
Assets of the Portfolio, or only assets held by State Street as a
fiduciary or custodian for customers; and provided further, State
Street's records will at all times indicate the Portfolio or other
customer for which such Assets are held and the respective interests
therein. If, however, Fund directs State Street to maintain Assets in
"street name", notwithstanding anything contained herein to the
contrary, State Street will be obligated only to utilize its best
efforts to timely collect income due the Portfolio on such Assets and
to notify the Portfolio of relevant information, such as maturities
and pendency of calls, and corporate actions including, without
limitation, calls for redemption, tender or exchange offers,
declaration, record and payment dates and amounts of any dividends or
income, reorganization, recapitalization, merger, consolidation,
split-up of shares, change of par value, or conversion ("Corporate
Actions"). All Assets and the ownership thereof by the Portfolio will
at all times be identifiable on the records of State Street. Fund
agrees to hold State Street and its nominee harmless for any liability
as a shareholder of record of securities held in custody.
E. Exchange. Upon receipt of Instructions, State Street will exchange, or
cause to be exchanged, Assets held for the account of the Portfolio
for other Assets issued or paid in connection with any Corporate
Action or otherwise, and will deposit any such Assets in accordance
with the terms of any such Corporate Action. Without Instructions,
State Street is authorized to exchange Assets in temporary form for
Assets in definitive form, to effect an exchange of shares when the
par value of stock is changed, and, upon receiving payment therefor,
to surrender bonds or other Assets at maturity or when advised of
earlier call for redemption, except that State Street will receive
Instruction prior to surrendering any convertible security.
F. Purchases of Investments -- Other Than Options and Futures. On each
business day on which the Portfolio makes a purchase of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount purchased, and
accrued
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interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer through
whom the purchase was made; and
9. Whether the Asset is to be received in certificated form or via a
specified Depository.
In accordance with such Instructions, State Street will pay for out of
monies held for the purchasing Portfolio, but only insofar as such
monies are available for such purpose, and receive the Assets so
purchased by or for the account of such Portfolio, except that State
Street, or a Subcustodian, may in its sole discretion advance funds to
the Portfolio which may result in an overdraft because the monies held
on behalf of the Portfolio are insufficient to pay the total amount
payable upon such purchase. Except as otherwise instructed by Fund,
State Street will make such payment only upon receipt of Assets: (a)
by State Street; (b) by a clearing corporation of a national exchange
of which State Street is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) State Street may release funds to a
Depository prior to the receipt of advice from the Depository that the
Assets underlying a repurchase agreement have been transferred by
book-entry into the account maintained with such Depository by State
Street on behalf of its customers; provided that State Street's
instructions to the Depository require that the Depository make
payment of such funds only upon transfer by book-entry of the Assets
underlying the repurchase agreement in such account; (ii) State Street
may make payment for time deposits, call account deposits, currency
deposits and other deposits, foreign exchange transactions, futures
contracts or options, before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and (iii)
State Street may make, or cause a Subcustodian to make, payment for
the purchase of Assets the settlement of which occurs outside of the
United States of America in accordance with generally accepted local
custom and market practice.
G. Sales and Deliveries of Investments -- Other Than Options and Futures.
On each business day on which the Portfolio makes a sale of Assets
other than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other
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expenses payable in connection with such sale;
8. The total amount to be received by the Portfolio upon such sale;
and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
State Street will deliver or cause to be delivered the Assets thus
designated as sold for the account of the selling Portfolio as
specified in the Instructions. Except as otherwise instructed by Fund,
State Street will make such delivery upon receipt of: (a) payment
therefor in such form as is satisfactory to State Street; (b) credit
to the account of State Street with a clearing corporation of a
national securities exchange of which State Street is a member; or (c)
credit to the account maintained by State Street on behalf of its
customers with a Depository. Notwithstanding the foregoing: (i) State
Street will deliver Assets held in physical form in accordance with
"street delivery custom" to a broker or its clearing agent; or (ii)
State Street may make, or cause a Subcustodian to make, delivery of
Assets the settlement of which occurs outside of the United States of
America upon payment therefor in accordance with generally accepted
local custom and market practice.
H. Purchases or Sales of Options and Futures. On each business day on
which the Portfolio makes a purchase or sale of the options and/or
futures listed below, Fund will deliver to State Street Instructions
specifying with respect to each such purchase or sale:
1. If applicable, the name of the Portfolio making such purchase or
sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
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h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
Instructions, and if not already in the possession of State
Street, Fund will deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement, incorporated herein by this reference); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Assets Pledged or Loaned. If specifically allowed for in the
prospectus or registration statement of the Portfolio, and subject to
such additional terms and conditions as State Street may require:
1. Upon receipt of Instructions, State Street will release or cause to
be released Assets to the designated pledgee by way of pledge or
hypothecation to secure any loan incurred by the Portfolio; provided,
however, that State Street will release Assets only upon payment to
State Street of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing already made,
further Assets may be released or caused to be released for that
purpose. Upon receipt of Instructions, State Street will pay, but only
from funds available for such purpose, any such loan upon redelivery
to it of the Assets pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of Instructions, State Street will release Assets to
the
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designated borrower; provided, however, that the Assets will be
released only upon deposit with State Street of full cash collateral
as specified in such Instructions, and that the lending Portfolio will
retain the right to any dividends, interest or distribution on such
loaned Assets. Upon receipt of Instructions and the loaned Assets,
State Street will release the cash collateral to the borrower.
J. Routine Matters. State Street will, in general, attend to all routine
and mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with the Assets
except as may be otherwise provided herein or upon Instruction from
Fund.
K. Deposit Accounts. State Street will open and maintain one or more
special purpose deposit accounts for the Portfolio in the name of
State Street in such banks or trust companies (including, without
limitation, affiliates of State Street) as may be designated by it in
writing ("Accounts"), subject only to draft or order by State Street
upon receipt of Instructions. State Street will deposit all monies
received by State Street from or for the account of the Portfolio in
an Account maintained for the Portfolio. Subject to Section 5.K
hereof, State Street agrees:
1. To make Fed Funds available to the Portfolio at 9:00 a.m., Kansas
City time, on the second business day after deposit of any check into
an Account, in the amount of the check;
2. To make funds available immediately upon a deposit made by Federal
Reserve wire; and
3. To make funds available on the next business day after deposit of
ACH wires.
L. Income and Other Payments. State Street will:
1. Collect, claim and receive and deposit for the account of the
Portfolio all income (including income from the Accounts) and other
payments which become due and payable on or after the effective date
hereof with respect to the Assets, and credit the account of the
Portfolio. If, for any reason, the Portfolio is credited with income
that is not subsequently collected, State Street may reverse that
credited amount. If monies are collected after such reversal, State
Street will credit the Portfolio in that amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in connection
with (a) the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for payment of
all coupons and other income items requiring presentation; and all
other Assets which may mature or be called, redeemed, retired or
otherwise become payable and regarding which State Street has actual
knowledge, or should reasonably be expected to have
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knowledge; and (b) the endorsement for collection, in the name of Fund
or the Portfolio, of all checks, drafts or other negotiable
instruments.
State Street, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of Instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. State Street
will receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to Instructions.
M. Proxies and Notices. State Street will promptly deliver or mail or
have delivered or mailed to Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices, requests
or announcements affecting or relating to Assets and will, upon
receipt of Instructions, execute and deliver or mail (or cause its
nominee to execute and deliver or mail) such proxies or other
authorizations as may be required. Except as provided herein or
pursuant to Instructions hereafter received by State Street, neither
it nor its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of such
Assets, or give any consent, approval or waiver with respect thereto,
or take any other similar action.
N. Disbursements. State Street will pay or cause to be paid, insofar as
funds are available for the purpose, bills, statements and other
obligations of the Portfolio (including but not limited to obligations
in connection with the conversion, exchange or surrender of Assets,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of the Portfolio) pursuant to Instructions setting forth the
name of the person to whom payment is to be made, and the amount and
purpose of the payment.
O. Daily Statement of Accounts. State Street will, within a reasonable
time, render to Fund a detailed statement of the amounts received or
paid and of Assets received or delivered for the account of the
Portfolio during each business day. State Street will maintain such
books and records as are necessary to enable it to render, from time
to time upon request by Fund, a detailed statement of the Assets.
State Street will permit, and upon Instruction will cause any
Subcustodian to permit, such persons as are authorized by the Fund,
including Fund's independent public accountants, reasonable access to
such records or will provide reasonable confirmation of the contents
of such records, and if demanded, State Street will permit, and will
cause any Subcustodian to permit, federal and state regulatory
agencies to examine the Assets, books and records of the Portfolio.
P. Appointment of Subcustodians. Notwithstanding any other provisions
hereof:
1. All or any of the Assets may be held in State Street's own custody
or in the custody of one or more other banks or trust companies
(including, without limitation, affiliates of State Street) acting as
Subcustodian as may be selected by State Street. Any such Subcustodian
selected by State Street must have the
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qualifications required for a custodian under the 0000 Xxx. Xxxxx
Xxxxxx will be responsible to the Portfolio for any loss, damage or
expense suffered or incurred by the Portfolio resulting from the
actions or omissions of any Subcustodians selected and appointed by
State Street (except Subcustodians appointed at the request of Fund
and as provided in Subsection 2 below) to the same extent State Street
would be responsible to Fund hereunder if it committed the act or
omission itself.
2. Upon request of Fund, State Street will contract with other
Subcustodians reasonably acceptable to State Street for purposes of
(a) effecting third-party repurchase transactions with banks, brokers,
dealers, or other entities through the use of a common custodian or
subcustodian, or (b) providing depository and clearing agency services
with respect to certain variable rate demand note securities, or (c)
for other reasonable purposes specified by Fund; provided, however,
that State Street will be responsible to Fund for any loss, damage or
expense suffered or incurred by Fund resulting from the actions or
omissions of any such Subcustodian only to the same extent such
Subcustodian is responsible to State Street. Fund may review State
Street's contracts with such Subcustodians.
Q. Provisions Relating to Rule 17f-5
1. Definitions. Capitalized terms in this Agreement shall have the
following meanings:
"Country Risk" means all factors reasonably related to the systemic
risk of holding Foreign Assets in a particular country including, but
not limited to, such country's political environment, economic and
financial infrastructure (including any Eligible Securities Depository
operating in the country), prevailing or developing custody and
settlement practices, and laws and regulations applicable to the
safekeeping and recovery of Foreign Assets held in custody in that
country.
"Eligible Foreign Custodian" has the meaning set forth in section
(a)(1) of Rule 17f-5 (as such term may be interpreted or modified by
appropriate action of the U.S. Securities and Exchange Commission (the
"SEC")).
"Eligible Securities Depository" has the meaning set forth in section
(b)(1) of Rule 17f-7 (as such term may be interpreted or modified by
appropriate action of the SEC).
"Foreign Assets" means the Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States,
and any cash and cash equivalents that are reasonably necessary to
effect the Portfolio's transactions in such investments.
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"Foreign Custody Manager" has the meaning set forth in section (a)(3)
of Rule 17f-5 (as such term may be interpreted or modified by
appropriate action of the SEC).
2. Delegation to State Street as Foreign Custody Manager. The Fund, by
resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to State Street, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Section 3.Q. with respect to
Foreign Assets of the Portfolio held outside the United States, and
State Street hereby accepts such delegation as Foreign Custody Manager
with respect to the Portfolio.
3. Countries Covered. The Foreign Custody Manager shall be responsible
for performing the delegated responsibilities defined below only with
respect to the countries and custody arrangements for each such
country listed on Schedule A to this Agreement, which list of
countries may be amended from time to time by the Fund with the
agreement of the Foreign Custody Manager. The Foreign Custody Manager
shall list on Schedule A the Eligible Foreign Custodians selected by
the Foreign Custody Manager to maintain the assets of the Portfolio,
which list of Eligible Foreign Custodians may be amended from time to
time in the sole discretion of the Foreign Custody Manager. The
Foreign Custody Manager will provide amended versions of Schedule A in
accordance with Section 3.Q.6 hereof.
Upon the receipt by the Foreign Custody Manager of Instructions to
open an account or to place or maintain Foreign Assets in a country
listed on Schedule A, and the fulfillment by the Fund, on behalf of
the Portfolio, of the applicable account opening requirements for such
country, the Foreign Custody Manager shall be deemed to have been
delegated by the Board on behalf of the Portfolio responsibility as
Foreign Custody Manager with respect to that country and to have
accepted such delegation. Execution of this Agreement by the Fund
shall be deemed to be an Instruction to open an account, or to place
or maintain Foreign Assets, of the Portfolio in each country listed on
Schedule A pursuant to the terms of the Agreement. Following the
receipt of Instructions directing the Foreign Custody Manager to close
the account of the Portfolio with the Eligible Foreign Custodian
selected by the Foreign Custody Manager in a designated country, the
delegation by the Board on behalf of such Portfolio to State Street as
Foreign Custody Manager for that country shall be deemed to have been
withdrawn and State Street shall immediately cease to be the Foreign
Custody Manager of the Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written
notice to the Portfolio. Sixty days (or such longer period to which
the parties agree in writing) after receipt of any such notice by the
Portfolio, State Street shall have no further responsibility in its
capacity as Foreign Custody Manager to the Portfolio with respect to
the country as to which State Street's acceptance of delegation is
withdrawn.
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4. Scope of Delegated Responsibilities:
(a) Selection of Eligible Foreign Custodians. Subject to the
provisions of Section 3.Q., the Foreign Custody Manager may place and
maintain the Foreign Assets in the care of the Eligible Foreign
Custodian selected by the Foreign Custody Manager in each country
listed on Schedule A, as amended from time to time. In performing its
delegated responsibilities as Foreign Custody Manager to place or
maintain Foreign Assets with an Eligible Foreign Custodian, the
Foreign Custody Manager shall determine that the Foreign Assets will
be subject to reasonable care, based on the standards applicable to
custodians in the relevant market, after considering all factors
relevant to the safekeeping of such assets, including without
limitation, the factors specified in Rule 17f-5(c)(1), as amended from
time to time.
(b) Contracts With Eligible Foreign Custodians. The Foreign
Custody Manager shall determine that each arrangement with an Eligible
Foreign Custodian is governed by a written contract and that such
contract will satisfy the requirements of Rule 17f-5(c)(2), as amended
from time to time.
(c) Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected
by the Foreign Custody Manager, the Foreign Custody Manager shall have
established a system to monitor (i) the appropriateness of maintaining
the Foreign Assets with such Eligible Foreign Custodian and (ii) the
performance of the contract governing the custody arrangements
established by the Foreign Custody Manager with the Eligible Foreign
Custodian under Rule 17f-5(c)(2). In the event the Foreign Custody
Manager determines that the custody arrangements with an Eligible
Foreign Custodian it has selected are no longer appropriate or no
longer meet the requirements of Rule 17f-5, the Foreign Custody
Manager shall notify the Board in accordance with Section 3.Q.6
hereunder and State Street shall, upon Instruction, assist the
Portfolio in withdrawing its assets from such Eligible Foreign
Custodian as soon as reasonably practicable.
5. Guidelines for the Exercise of Delegated Authority. For purposes of
this Section 3.Q, the Board, or at its delegation the Portfolio's
investment adviser, shall be deemed to have considered and determined
to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which State Street is serving
as Foreign Custody Manager of the Portfolio.
6. Reporting Requirements. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign
Custodian and the placement of such Foreign Assets with another
Eligible Foreign Custodian by providing to the Board an amended
Schedule A at the end of the calendar quarter in which an amendment to
such Schedule has occurred. The Foreign Custody Manager shall make
written quarterly reports notifying the Board of any other material
change in the foreign custody arrangements of the Portfolio described
in this Section 3.Q after the occurrence of the material change.
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7. Standard of Care as Foreign Custody Manager of a Portfolio. In
performing the responsibilities delegated to it hereunder, the Foreign
Custody Manager agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping
of the Portfolio's Foreign Assets would exercise.
8. Representations with Respect to Rule 17f-5. The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5 and is otherwise eligible to serve as a
Foreign Custody Manager under Rule 17f-5. The Fund represents to State
Street that the Board has determined that it is reasonable for the
Board to rely on State Street to perform the responsibilities
delegated pursuant to this Agreement to State Street as the Foreign
Custody Manager of the Portfolio.
9. Effective Date and Termination of State Street as Foreign Custody
Manager. The Board's delegation to State Street as Foreign Custody
Manager of the Portfolio shall be effective as of the date hereof and
shall remain in effect until terminated at any time, without penalty,
by written notice from the terminating party to the non-terminating
party. Termination of State Street as Foreign Custody Manager will
become effective thirty (30) days after receipt by the non-terminating
party of such notice. The provisions of Section 3.Q.3 hereof shall
govern the delegation to and termination of State Street as Foreign
Custody Manager of the Portfolio with respect to designated countries.
10. Analysis and Monitoring State Street shall (a) provide the
Portfolio (or its duly-authorized investment manager or investment
adviser) with an analysis of the custody risks associated with
maintaining assets with the Eligible Securities Depositories set forth
on Schedule B hereto, as amended from time to time, in accordance with
section (a)(1)(i)(A) of Rule 17f-7, as amended from time to time, and
(b) monitor such risks on a continuing basis, and promptly notify the
Portfolio (or its duly-authorized investment manager or investment
adviser) of any material change in such risks, in accordance with
section (a)(1)(i)(B) of Rule 17f-7, as amended from time to time.
11. Standard of Care Under Rule 00x-0. Xxxxx Xxxxxx agrees to exercise
reasonable care, prudence and diligence in performing the requirements
and duties set forth in Section 3.Q.10.
12. Eligible Securities Depositories. State Street has made the
determination that each depository institution listed on Schedule B
hereto is an "Eligible Securities Depository" as defined in section
(b)(1) of Rule 00x-0. Xxxxx Xxxxxx shall promptly inform the Fund if
it becomes aware that any of the factors set forth in section (b)(1)
of Rule 17f-7 no long apply to a depository institution listed on
Schedule B hereto, as such factors may be interpreted or modified by
appropriate action of the SEC from time to time, i.e., such depository
institution no longer: (i) acts as or operates a system for the
central handling of securities or equivalent book-entries in the
country where it is incorporated, or acts as a transnational system
for the central handling of securities or equivalent book-entries,
(ii) is regulated by a foreign financial regulatory authority as
defined
12
under Section 2(a)(50) of the Investment Company Act, (iii) holds
assets for the custodian that participates in the system on behalf of
the Fund under safekeeping conditions no less favorable than the
conditions that apply to other participants, (iv) maintains records
that identify the assets of each participant and segregates the
system's own assets from the assets of participants, (v) provides
periodic reports to its participants with respect to its safekeeping
of assets, including notices of transfer to or from any participant's
account, or (vi) is subject to periodic examination by regulatory
authorities or independent accountants.
R. Accounts and Records. State Street will prepare and maintain, with
the direction and as interpreted by Fund or its accountants and/or
other advisors, in complete, accurate and current form all accounts
and records: (1) required to be maintained by the Fund with respect to
portfolio transactions under Section 31(a) of the 1940 Act and the
rules and regulations from time to time adopted thereunder; (2)
required to be maintained as a basis for calculation of each
Portfolio's net asset value; and (3) as otherwise agreed upon by the
parties. Fund will advise State Street in writing of all applicable
record retention requirements, other than those set forth in the 1940
Act or the regulations thereunder. State Street will preserve such
accounts and records in the manner and for the periods prescribed in
the 1940 Act or the regulations thereunder or for such longer period
as is agreed upon by the parties. Fund will furnish, in writing or its
electronic or digital equivalent, accurate and timely information
needed by State Street to complete such accounts and records,
including Corporate Actions, when such information is not readily
available from generally accepted securities industry services or
publications.
S. Accounts and Records Property of Fund. State Street acknowledges
that all of the accounts and records maintained by State Street
pursuant hereto are the property of the Fund, and will be made
available to the Fund on behalf of the Portfolio for inspection or
reproduction within a reasonable period of time, upon demand. State
Street will assist Fund's independent auditors, or upon approval of
Fund, or upon demand, any regulatory body, in any requested review of
Fund's accounts and records but Portfolio will reimburse State Street
for all expenses and employee time invested in any such review outside
of routine and normal periodic reviews. Upon receipt from Fund of the
necessary information or instructions, State Street will supply
information from the books and records it maintains for Portfolio that
Portfolio needs for tax returns, questionnaires, periodic reports to
shareholders and such other reports and information requests as Fund
and State Street agree upon from time to time.
T. Adoption of Procedures. State Street and Fund hereby adopt the
Funds Transfer Operating Guidelines attached hereto. State Street and
Fund may from time to time adopt such additional procedures as they
agree upon, and State Street may conclusively assume that no procedure
approved or directed by Fund or its accountants or other advisors
conflicts with or violates any requirements of the prospectus or
registration statement, articles of incorporation and bylaws or trust
instrument, any applicable law, rule or regulation, or any order,
decree or agreement by which the Fund may be bound. Fund will be
responsible for notifying State Street of any changes in statutes,
regulations, rules, requirements or policies which may impact State
Street's performance of its responsibilities
13
hereunder or its related operational policies and procedures as they
relate to the Fund in a manner different from or in addition to
requirements applicable to investment companies registered under the
1940 Act in general.
U. Calculation of Net Asset Value. Fund will give Instructions to State
Street specifying the outside pricing sources to be utilized as
sources of Asset prices ("Pricing Sources"). State Street will
calculate the Portfolio's net asset value, in accordance with the
Portfolio's prospectus or registration statement. State Street will
price the Assets, including foreign currency holdings, of the
Portfolio for which market quotations are available from the Pricing
Sources; all other Assets will be priced in accordance with Fund's
Instructions.
V. Advances. Fund will cause the Portfolio to pay on demand the advance
of cash or securities made by State Street or any Subcustodian, in its
sole discretion, for any purpose (including but not limited to
securities settlements, purchase or sale of foreign exchange or
foreign exchange contracts and assumed settlement) for the benefit of
the Portfolio. Any such cash advance will be subject to an overdraft
charge at the rate set forth in the then-current fee schedule from the
date advanced until the date repaid. As security for each such
advance, Fund hereby grants State Street and such Subcustodian a lien
on and security interest in all of Fund's Assets at any time held for
the account of the Portfolio, including without limitation all Assets
acquired with the amount advanced. Should the Portfolio fail to
promptly repay the advance, the Fund agrees that State Street and such
Subcustodian may utilize available cash and dispose of the Portfolio's
Assets pursuant to applicable law to the extent necessary to obtain
reimbursement of the amount advanced and any related overdraft
charges; provided, however, that prior to such utilization and
disposition, (i) State Street or Subcustodian has given Fund 2 days'
notice of the amount due and of its intent to so utilize and dispose
of custodied Assets; and (ii) the Portfolio shall not have satisfied
the obligation. During such 2 day notice period, Fund shall have the
option to direct State Street or such Subcustodian by written notice
regarding which and in what priority order custodied Assets are to be
utilized and disposed of. Fund hereby agrees to waive the provisions
of subparagraphs (i) and (ii) above with respect to State Street's
pledge of the Fund's custodied assets to the Fed in order to allow
State Street to collateralize trades through the applicable Fed Book
Entry account.
W. Exercise of Rights; Tender Offers. Upon receipt of Instructions, State
Street will: (1) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that
the new Assets, if any, are to be delivered to State Street; and (2)
deposit securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be paid or delivered to
State Street or the tendered securities are to be returned to State
Street.
X. Fund Shares.
1. Fund will deliver to State Street Instructions with respect to the
declaration and payment of any dividend or other distribution on the
shares of capital stock or beneficial interest, as the case may be, of
the Portfolio ("Fund
14
Shares") by the Portfolio. On the date specified in such Instruction,
State Street will pay out of the monies held for the account of the
Portfolio, insofar as it is available for such purposes, and credit to
the account of the Dividend Disbursing Agent for the Portfolio, the
amount specified in such Instructions.
2. Whenever Fund Shares are repurchased or redeemed by the Portfolio,
Fund on behalf of the Portfolio or its agent will give State Street
Instructions regarding the aggregate dollar amount to be paid for such
shares. Upon receipt of such Instruction, State Street will charge
such aggregate dollar amount to the account of the Portfolio and
either deposit the same in the account maintained for the purpose of
paying for the repurchase or redemption of Fund Shares or deliver the
same in accordance with such Instruction. State Street has no duty or
responsibility to determine that Fund Shares have been removed from
the proper shareholder accounts or that the proper number of Fund
Shares have been canceled and removed from the shareholder records.
3. Whenever Fund Shares are purchased from the Portfolio, Fund will
deposit or cause to be deposited with State Street the amount received
for such shares. State Street has no duty or responsibility to
determine that Fund Shares purchased from the Portfolio have been
added to the proper shareholder account or that the proper number of
such shares have been added to the shareholder records.
Y. Provisions Relating to Custody of Assets Held Outside the United
States
1. Definitions. Capitalized terms in this Section 3.Y. shall have the
following meanings:
"Foreign Securities System" means an Eligible Securities Depository
listed on Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as
an Eligible Foreign Custodian hereunder.
2. Holding Securities. State Street shall identify on its books as
belonging to the Portfolio the foreign securities held of the
Portfolio placed with and maintained by each Foreign Sub-Custodian or
Foreign Securities System. State Street may hold foreign securities
for all of its customers, including the Portfolio, with any Foreign
Sub-Custodian in an account that is identified as belonging to State
Street for the benefit of its customers, provided however, that (i)
the records of State Street with respect to foreign securities of the
Portfolio which are maintained in such account shall identify those
securities as belonging to the Portfolio and (ii), to the extent
permitted by law in the market in which the account is maintained,
State Street shall require that securities so held by the Foreign
Sub-Custodian be held separately from any assets of such Foreign
Sub-Custodian or of other customers of such Foreign Sub-Custodian.
3. Foreign Securities Systems. Foreign securities shall be maintained
in a Foreign Securities System in a designated country through
arrangements
15
implemented by State Street or a Foreign Sub-Custodian, as applicable,
in such country.
4. Transactions in Foreign Custody Account.
4.1. Delivery of Foreign Assets. State Street or a Foreign
Sub-Custodian shall release and deliver foreign securities of the
Portfolio held by State Street or such Foreign Sub-Custodian, or
in a Foreign Securities System account, only upon receipt of
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(i) upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against expectation
of receiving later payment; or (B) in the case of a sale effected
through a Foreign Securities System, in accordance with the rules
governing the operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to
foreign securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolio;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of State Street (or the name of the respective Foreign
Sub-Custodian or of any nominee of State Street or such Foreign
Sub-Custodian) or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market custom;
provided that in any such case the Foreign Sub-Custodian shall
have no responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Foreign Sub-Custodian's
own negligence, bad faith or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement;
16
(viii) in the case of warrants, rights or similar foreign
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities;
(ix) for delivery as security in connection with any borrowing by
the Portfolio requiring a pledge of assets by the Portfolio;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other purpose, but only upon receipt of
Instructions specifying the foreign securities to be delivered
and naming the person or persons to whom delivery of such
securities shall be made.
4.2. Payment of Portfolio Monies. Upon receipt of Instructions,
which may be continuing instructions when deemed appropriate by
the parties, State Street shall pay out, or direct the respective
Foreign Sub-Custodian or the respective Foreign Securities System
to pay out, monies of the Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Instructions, by (A) delivering
money to the seller thereof or to a dealer therefor (or an agent
for such seller or dealer) against expectation of receiving later
delivery of such foreign securities; or (B) in the case of a
purchase effected through a Foreign Securities System, in
accordance with the rules governing the operation of such Foreign
Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the
Portfolio, including but not limited to the following payments:
interest, taxes, investment advisory fees, transfer agency fees,
fees under this Agreement, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through State Street or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in
respect of securities sold short;
17
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other purpose, but only upon receipt of
Instructions specifying the amount of such payment and naming the
person or persons to whom such payment is to be made.
4.3. Market Conditions. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Foreign
Assets received for the account of the Portfolio and delivery of
Foreign Assets maintained for the account of the Portfolio may be
effected in accordance with the customary established securities
trading or processing practices and procedures in the country or
market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or
to a dealer therefor (or an agent for such purchaser or dealer)
with the expectation of receiving later payment for such Foreign
Assets from such purchaser or dealer.
State Street shall provide to the Board the information described
on Schedule C hereto with respect to custody and settlement
practices in countries in which State Street employs a Foreign
Sub-Custodian or uses a Foreign Securities System at the time or
times set forth on such Schedule. State Street may revise
Schedule C from time to time, provided that no such revision
shall result in the Board being provided with substantively less
information than had been previously provided hereunder.
5. Registration of Foreign Securities. A Portfolio's foreign
securities maintained in the custody of a Foreign Sub-Custodian (other
than bearer securities) shall be registered in the name of the
Portfolio or in the name of State Street or in the name of any Foreign
Sub-Custodian or in the name of any nominee of the foregoing
(provided, however, that such registration indicates such foreign
securities as having been held for the benefit of customers and not,
in any event, for the benefit of State Street or a Foreign
Sub-Custodian or any nominee thereof), and the Fund on behalf of the
Portfolio agrees to hold any such nominee harmless from any liability
as a holder of record of such foreign securities. State Street or a
Foreign Sub-Custodian shall not be obligated to accept securities on
behalf of the Portfolio under the terms of this Agreement unless the
form of such securities and the manner in which they are delivered are
in accordance with reasonable market practice.
6. Bank Accounts. State Street shall identify on its books as
belonging to a Portfolio cash (including cash denominated in foreign
currencies) deposited with State Street. Where State Street is unable
to maintain, or market practice does not facilitate the maintenance
of, cash on the books of State Street, a bank account or bank accounts
shall be opened and maintained outside the United States on behalf of
the Portfolio with a Foreign Sub-Custodian. All accounts referred to
in this Section shall be subject only to draft or order by State
Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant
to the terms of this Agreement to hold cash received by or from or for
the account of the Portfolio. Cash
18
maintained on the books of State Street (including its branches,
subsidiaries and affiliates), regardless of currency denomination, is
maintained in bank accounts established under, and subject to the laws
of, The Commonwealth of Massachusetts.
7. Collection of Income. State Street shall use reasonable commercial
efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolio shall be entitled
and shall credit such income, as collected, to the Portfolio. In the
event that extraordinary measures are required to collect such income,
the Fund and State Street shall consult as to such measures and as to
the compensation and expenses of State Street relating to such
measures.
8. Shareholder Rights. With respect to the foreign securities held
pursuant to this Agreement, State Street will use reasonable
commercial efforts to facilitate the exercise of voting and other
shareholder rights, subject always to the laws, regulations and
practical constraints that may exist in the country where such
securities are issued. The Fund acknowledges that local conditions,
including lack of regulation, onerous procedural obligations, lack of
notice and other factors may have the effect of severely limiting the
ability of the Fund to exercise shareholder rights.
9. Communications Relating to Foreign Securities. State Street shall
transmit promptly to the Fund written information with respect to
materials received by State Street via the Foreign Sub-Custodians from
issuers of the foreign securities being held for the account of the
Portfolio (including, without limitation, pendency of calls and
maturities of foreign securities and expirations of rights in
connection therewith). With respect to tender or exchange offers,
State Street shall transmit promptly to the Fund written information
with respect to materials so received by State Street from issuers of
the foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer. Absent
State Street's negligence, misfeasance or misconduct, State Street
shall not be liable for any untimely exercise of any tender, exchange
or other right or power in connection with foreign securities or other
property of the Portfolio at any time held by it unless (i) State
Street or the respective Foreign Sub-Custodian is in actual possession
of such foreign securities or property and (ii) State Street receives
Instructions with regard to the exercise of any such right or power,
and both (i) and (ii) occur at least three business days prior to the
date on which State Street is to take action to exercise such right or
power.
10. Liability of Foreign Sub-Custodians. Each agreement pursuant to
which State Street employs a Foreign Sub-Custodian shall, to the
extent possible, require the Foreign Sub-Custodian to exercise
reasonable care in the performance of its duties, and to indemnify,
and hold harmless, State Street, and the Fund and the Portfolio from
and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Sub-Custodian's
performance of such obligations. At the Fund's election, the Portfolio
shall be entitled to be subrogated to the rights of State Street with
respect to any claims against a Foreign Sub-Custodian as a consequence
of any such loss, damage, cost, expense,
19
liability or claim if and to the extent that the Fund and the
Portfolio have not been made whole for any such loss, damage, cost,
expense, liability or claim.
11. Tax Law. State Street shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund, the
Portfolio or State Street as custodian of the Portfolio by the tax law
of the United States or of any state or political subdivision thereof
unless and to the extent that such liability or obligation arises due
to State Street's negligence, misfeasance or misconduct. It shall be
the responsibility of the Fund to notify State Street of the
obligations imposed on the Fund with respect to its Portfolio or State
Street as custodian of the Portfolio by the tax law of countries other
than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole
responsibility of State Street with regard to such tax law shall be to
use reasonable efforts to assist the Fund with respect to any claim
for exemption or refund under the tax law of countries for which the
Fund has provided such information.
12. Liability of Custodian. Except as may arise from State Street's
own negligence, misfeasance or willful misconduct or the negligence,
misfeasance or willful misconduct of a Foreign Sub-Custodian, State
Street shall be without liability to the Fund for any loss, liability,
claim or expense to the extent that such loss, liability, claim or
expense results directly from or is caused directly by Country Risk.
State Street shall be liable for the acts or omissions of a Foreign
Sub-Custodian to the same extent as set forth with respect to
sub-custodians generally in this Agreement and, regardless of whether
assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, State Street 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, or any other loss where the Sub-Custodian has otherwise
acted with reasonable care.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which State Street reasonably believes were given by a
designated representative of Fund. Fund will deliver to State Street,
prior to delivery of any Assets to State Street and thereafter from
time to time as changes therein are necessary, written Instructions
naming one or more designated representatives to give Instructions in
the name and on behalf of Fund, which Instructions may be received and
accepted by State Street as conclusive evidence of the authority of
any designated representative to act for the Fund and may be
considered to be in full force and effect until receipt by State
Street of notice to the contrary. Unless such written Instructions
delegating authority to any person to give Instructions specifically
limit such authority to specific matters or require that the approval
of anyone else will first have been obtained, State Street will be
under no obligation to inquire into the right of such person, acting
alone, to give any Instructions whatsoever. If Fund fails to provide
State Street any such Instructions naming designated representatives,
any Instructions received by State Street from a person reasonably
believed to be an
20
appropriate representative of Fund will constitute valid and proper
Instructions hereunder. "Designated representatives" may include the
Fund's or the Portfolio's employees and agents, including investment
managers and their employees.
B. No later than the next business day immediately following each oral
Instruction, Fund will send State Street written confirmation of such
oral Instruction. At State Street's sole discretion, State Street may
record on tape, or otherwise, any oral Instruction whether given in
person or via telephone, each such recording identifying the date and
the time of the beginning and ending of such oral Instruction.
C. Fund will provide, upon State Street's request, a certificate signed
by an officer or designated representative of Fund, as conclusive
proof of any fact or matter required to be ascertained from Fund
hereunder. Fund will also provide State Street Instructions with
respect to any matter concerning this Agreement requested by State
Street. If State Street reasonably believes that it could not
prudently act according to the Instructions, or the instruction or
advice of Fund's or the Portfolio's accountants or counsel, it may in
its discretion, with notice to Fund, not act according to such
Instructions.
5. LIMITATION OF LIABILITY OF STATE STREET.
A. State Street shall at all times use reasonable care and due diligence
and act in good faith in performing its duties under this Agreement.
Fund is not responsible or liable for, and State Street will indemnify
and hold Fund harmless from and against, any and all costs, expenses,
losses, damages, charges, counsel fees, payments and liabilities which
may be asserted against or incurred by Fund or for which Fund may be
held to be liable, arising out of or attributable to State Street's
failure to comply with the terms of this Agreement or arising out of
State Street's (or its agents' or delegees') negligence, willful
misconduct, or bad faith.
B. State Street is not responsible or liable for, and Fund will indemnify
and hold State Street harmless from and against, any and all costs,
expenses, losses, damages, charges, counsel fees, payments and
liabilities which may be asserted against or incurred by State Street
or for which State Street may be held to be liable, arising out of or
attributable to:
1. State Street's action or omission to act pursuant hereto; provided
that State Street has acted or failed to act in good faith and with
due diligence and reasonable care; and provided further, that neither
party is liable to the other for consequential, special, or punitive
damages in any event.
2. State Street's payment of money as requested by Fund, or the taking
of any action which might make it or its nominee liable for payment of
monies or in any other way; provided, however, that nothing herein
obligates State Street to take any such action or expend its own
monies in its sole discretion.
3. State Street's action or omission to act hereunder in reasonable
reliance upon any Instructions, advice, notice, request, consent,
certificate or other
21
instrument or paper appearing to it to be genuine and to have been
properly executed, including any Instructions, communications, data or
other information received by State Street by means of the Systems, as
hereinafter defined, or any electronic system of communication.
4. State Street's action or omission to act in good faith reliance on
the advice or opinion of counsel for Fund or of its own counsel with
respect to questions or matters of law, which advice or opinion may be
obtained by State Street from counsel for Fund at the expense of Fund
or from State Street's counsel at its own expense, or on the
Instructions, advice or statements of any officer or employee of Fund,
or the Fund's accountants or other authorized individuals, and other
persons believed by it in good faith to be expert in matters upon
which they are consulted.
5. The purchase or sale of any securities or foreign currency
positions. Without limiting the generality of the foregoing, State
Street is under no duty or obligation to inquire into:
a. The validity of the issue of any securities purchased by or
for any Portfolio, or the legality of the purchase thereof or of
foreign currency positions, or evidence of ownership required by
Fund to be received by State Street, or the propriety of the
decision to purchase or the amount paid therefor;
b. The legality of the sale of any securities or foreign currency
positions by or for the Portfolio, or the propriety of the amount
for which the same are sold; or
c. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor, the legality
of the repurchase or redemption of any Fund Shares, or the
propriety of the amount to be paid therefor, or the legality of
the declaration of any dividend by either Fund, or the legality
of the issue of any Fund Shares in payment of any stock dividend.
6. Any error, omission, inaccuracy or other deficiency in the
Portfolio's accounts and records or other information provided by or
on behalf of the Portfolio to State Street, including the accuracy of
the prices quoted by the Pricing Sources or for the information
supplied by Fund to price the Assets, or the failure of Fund to
provide, or provide in a timely manner, any accounts, records, or
information needed by State Street to perform hereunder.
7. Fund's refusal or failure to comply with the terms hereof
(including without limitation Fund's failure to pay or reimburse State
Street on behalf of the Portfolio under Section 5 or 6 hereof), Fund's
negligence or willful misconduct, or the failure of any representation
or warranty of Fund hereunder to be and remain true and correct in all
respects at all times.
8. The use or misuse, whether authorized or unauthorized, of the
Systems or any electronic system of communication used hereunder, by
Fund or by any
22
person who acquires access to the Systems or such other systems
through the terminal device, passwords, access instructions or other
means of access to such Systems or such other system which are
utilized by, assigned to or otherwise made exclusively available to
Fund, except to the extent attributable to any negligence or willful
misconduct by State Street.
9. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the payment
of money to be received by State Street on behalf of the Portfolio
until actually received; provided, however, that State Street will
advise Fund promptly if it fails to receive any such money in the
ordinary course of business and will cooperate with Fund toward the
end that such money is received.
10. Except as provided in Section 3.P hereof, and subject to Section
5.B.1 hereof, loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other person
with whom State Street may deal.
11. The failure or delay in performance of its obligations hereunder,
or those of any entity for which it is responsible hereunder, arising
out of or caused, directly or indirectly, by circumstances beyond the
affected entity's reasonable control or ability to take preemptive
measures against, including, without limitation: any interruption,
loss or malfunction of any utility, transportation, computer (hardware
or software) or communication service; inability to obtain labor,
material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, State Street
will be paid the compensation set forth in a separate fee schedule,
incorporated herein by this reference, to be agreed to by Fund and State
Street from time to time, and reimbursement for State Street's cash
disbursements and reasonable out-of-pocket costs and expenses, including
attorney's fees, incurred by State Street in connection with the
performance of services hereunder, on demand. State Street, subject to
Section 10 hereof, may charge such compensation against monies held by it
for the accounts of the Portfolio following notice to Fund. State Street
will, subject to Section 10 hereof, be entitled to charge against any
monies held by it for the accounts of the Portfolio the amount of any loss,
damage, liability, advance, overdraft or expense for which it is entitled
to reimbursement from Fund. State Street will be entitled to reimbursement
by the Fund on behalf of the Portfolio for the losses, damages,
liabilities, advances, overdrafts and expenses of Subcustodians only to the
extent that (a) State Street would have been entitled to reimbursement
hereunder if it had incurred the same itself directly, and (b) State Street
is obligated to reimburse the Subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement is for a period of
one (1) year. Thereafter, Fund or State Street may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other party
and received not less than sixty (60) days prior to the date upon which
such termination will take effect. Upon
23
termination hereof:
A. Fund will pay State Street its fees and compensation due hereunder and
its reimbursable disbursements, costs and expenses paid or incurred to
such date;
B. Fund will designate a successor investment accounting and
recordkeeping agent (which may be Fund) by Instruction to State
Street;
C. Fund will designate a successor custodian by Instruction to State
Street. In the event no such Instruction has been delivered to
State Street on or before the date when such termination becomes
effective, then State Street may, at its option, (i) choose as
successor custodian a bank or trust company meeting the
qualifications for custodian set forth in the 1940 Act and having
not less than Two Million Dollars ($2,000,000) aggregate capital,
surplus and undivided profits, as shown by its last published
report, or (ii) apply to a court of competent jurisdiction for
the appointment of a successor or other proper relief, or take
any other lawful action under the circumstances; provided,
however, that Fund will reimburse State Street for its costs and
expenses, including reasonable attorney's fees, incurred in
connection therewith; and
D. State Street will, upon payment of all sums due to State Street
from Fund hereunder, deliver at State Street's office (i) all
accounts and records to the successor investment accounting and
recordkeeping agent or, if none, to Fund; and (ii) all Assets,
duly endorsed and in form for transfer, to the successor
custodian, or as specified by the court. State Street will
cooperate in effecting changes in book-entries at all
Depositories. Upon delivery to a successor or as specified by the
court, State Street will have no further obligations or
liabilities hereunder. Thereafter such successor will be the
successor hereunder and will be entitled to reasonable
compensation for its services.
In the event that accounts, records or Assets remain in the possession
of State Street after the date of termination hereof for any reason
other than State Street's failure to deliver the same, State Street is
entitled to compensation as provided in the then-current fee schedule
for its services during such period, and the provisions hereof
relating to the duties and obligations of State Street will remain in
full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed
to Fund at the address set forth above, or at such other address as
Fund may have designated to State Street in writing, will be deemed to
have been properly given to Fund hereunder. Notices, requests,
Instructions and other writings addressed to State Street at 000
Xxxxxxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Custody
Department, or to such other address as it may have designated to the
Fund in writing, will be deemed to have been properly given to State
Street hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
A. If State Street provides Fund direct access to the computerized
investment portfolio custody, recordkeeping and accounting
systems used by State Street ("Systems") or if State Street and
Fund agree to utilize any electronic system of
24
communication, Fund agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or
improper access to or use of the Systems or such other system.
B. Fund will preserve the confidentiality of the Systems and the
tapes, books, reference manuals, instructions, records, programs,
documentation and information of, and other materials relevant
to, the Systems and the business of State Street ("Confidential
Information"). Fund agrees that it will not voluntarily disclose
any such Confidential Information to any other person other than
its own employees who reasonably have a need to know such
information pursuant hereto. Fund will return all such
Confidential Information to State Street upon termination or
expiration hereof.
C. Fund has been informed that the Systems are licensed for use by
State Street from one or more third parties ("Licensors"), and
Fund acknowledges that State Street and Licensors have
proprietary rights in and to the Systems and all other State
Street or Licensor programs, code, techniques, know-how, data
bases, supporting documentation, data formats, and procedures,
including without limitation any changes or modifications made at
the request or expense or both of Fund (collectively, the
"Protected Information"). Fund acknowledges that the Protected
Information constitutes confidential material and trade secrets
of State Street and Licensors. Fund will preserve the
confidentiality of the Protected Information, and Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or
taking of Protected Information, residing or existing internal or
external to a computer, computer system, or computer network, or
the knowing and unauthorized accessing or causing to be accessed
of any computer, computer system, or computer network, may be
subject to civil liabilities and criminal penalties under
applicable law. Fund will so inform employees and agents who have
access to the Protected Information or to any computer equipment
capable of accessing the same. Licensors are intended to be and
are third party beneficiaries of Fund's obligations and
undertakings contained in this Section.
D. Fund hereby represents and warrants to State Street that it has
determined to its satisfaction that the Systems are appropriate
and suitable for its use. THE SYSTEMS ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. State Street EXPRESSLY DISCLAIMS ALL
WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
E. State Street agrees to defend at its own expense any claim or
action brought against Fund on the issue of infringement of any
United States patent, copyright, trade secret or trademark by the
Systems as used within the scope of this Agreement, and to
indemnify Fund against all damages and costs, which may be
assessed against them under any such claim or action.
10. ADDITIONAL PORTFOLIOS. Fund may appoint State Street as its
custodian and investment accounting and recordkeeping agent under
this Agreement for additional series of the Fund ("Additional
Portfolio") from time to time by written
25
notice, provided that State Street consents to such addition.
Rates or charges for each Additional Portfolio will be as agreed
upon by State Street and Fund in writing. If Additional
Portfolios are added to this Agreement, each portfolio will be
regarded for all purposes hereunder as a separate party apart
from each other portfolio. Unless the context otherwise requires,
with respect to every transaction covered hereby, every reference
herein to the Portfolio is deemed to relate solely to the
particular portfolio to which such transaction relates. Under no
circumstances will the rights, obligations or remedies with
respect to a particular portfolio constitute a right, obligation
or remedy applicable to any other portfolio. The use of this
single document to memorialize the separate agreement of each
portfolio is understood to be for clerical convenience only and
will not constitute any basis for joining portfolios for any
reason.
11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights and
liabilities of the parties hereto will be governed by, the laws of the
Commonwealth of Massachusetts without reference to the choice of laws
principles thereof.
B. All terms and provisions hereof will be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
C. The representations and warranties, the indemnifications extended
hereunder, and the provisions of Section 9 hereof are intended to and
will continue after and survive the expiration, termination or
cancellation hereof.
D. No provisions hereof may be amended or modified in any manner except
by a written agreement properly authorized and executed by each party
hereto.
E. The failure of any party to insist upon the performance of any terms
or conditions hereof or to enforce any rights resulting from any
breach of any of the terms or conditions hereof, including the payment
of damages, will not be construed as a continuing or permanent waiver
of any such terms, conditions, rights or privileges, but the same will
continue and remain in full force and effect as if no such forbearance
or waiver had occurred. No waiver, release or discharge of any party's
rights hereunder will be effective unless contained in a written
instrument signed by the party sought to be charged.
F. The captions herein are included for convenience of reference only,
and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts, each of
which is deemed an original but all of which together constitute one
and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be
26
considered severable and will not be affected thereby, and every
remaining provision hereof will remain in full force and effect and
will remain enforceable to the fullest extent permitted by applicable
law.
I. This Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
J. Neither the execution nor performance hereof will be deemed to create
a partnership or joint venture by and between State Street and Fund or
the Portfolio.
K. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder will not
affect any rights or obligations of the other parties hereunder.
L. Notice is hereby given that this Agreement has been executed on behalf
of the Fund by the undersigned duly authorized representative of Fund
in his/her capacity as such and not individually; and that the
obligations of this Agreement are binding only upon the assets and
property of Fund and not upon any trustee, officer of shareholder of
Fund individually.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Title: Senior Vice President
---------------------------
FIXED INCOME SHARES
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Title: President/CEO
---------------------------
27
FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company and affiliates
("SSB") is authorized to promptly debit Client's account(s) upon the receipt of
a payment order in compliance with any of the Security Procedures chosen by the
Client, from those offered on the attached selection form (and any updated
selection forms hereafter executed by the Client), for funds transfers and in
the amount of money that SSB has been instructed to transfer. SSB is hereby
instructed to accept funds transfer instructions only via the delivery methods
and Security Procedures indicated on the attached selection form (and any
updated selection forms hereafter executed by the Client). The Client agrees
that the Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted by SSB
after being confirmed by any of the selected Security Procedures. The Client
also agrees to be bound by any other valid and authorized payment order accepted
by SSB. SSB shall execute payment orders in compliance with the selected
Security Procedures and with the Client's/Investment Manager's instructions on
the execution date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order specifies a
later time. SSB will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable to
execute any such payment order on the execution date, such payment order will be
deemed to have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB will also rely on any financial
institution identification numbers included in any payment order, regardless of
any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's sole judgment, to
exceed any applicable volume, aggregate dollar, network, time, credit or similar
limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB's reasonable efforts.
6. ERRORS: SSB shall assume no responsibility for failure to detect any
erroneous payment order provided that SSB complies with the payment order
instructions as received and SSB complies with the selected Security Procedures.
The Security Procedures are established for the purpose of authenticating
payment orders only and not for the detection of errors in payment orders.
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
the Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the Mid-America Payment Exchange or other similar body, SSB or its
28
agent will act as an Originating Depository Financial Institution and/or
Receiving Depository Financial Institution, as the case may be, with respect to
such entries. Credits given with respect to an ACH credit entry are provisional
until final settlement for such entry is received from the Federal Reserve Bank.
If such final settlement is not received, the Client agrees to promptly refund
the amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute
payment orders, and any payment order carried in whole or in part through
Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
11. Liability on Foreign Accounts: State Street shall not be required to repay
any deposit made at a non-U.S. branch of State Street, or any deposit made with
State Street and denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or (c) the closure of a non-U.S. branch of State Street in
order to prevent, in the reasonable judgment of State Street, harm to the
employees or property of State Street. The obligation to repay any such deposit
shall not be transferred to and may not be enforced against any other branch of
State Street.
The foregoing provisions constitute the disclosure required by Massachusetts
General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at a non-U.S.
branch or any deposit denominated in a non-U.S. currency during the period in
which its repayment has been prevented, prohibited or otherwise blocked, State
Street will repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist
29
SECURITY PROCEDURES SELECTION FORM
Please select at least two of the funds transfer security procedures indicated
below.
[ ] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages.
Selection of this security procedure would be most appropriate for
existing SWIFT members.
[ ] REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and SSB and/or
its agent. Security procedures include encryption and/or the use of a test key
by those individuals authorized as Automated Batch Verifiers or a callback
procedure to those individuals.
Clients selecting this option should have an existing facility for
completing CPU-CPU transmissions. This delivery mechanism is typically used for
high-volume business such as shareholder redemptions and dividend payments.
[ ] AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the
initiation of payment (credit) or collection (debit) transactions through the
ACH network. The transactions contained on each transmission or tape must be
authenticated by the Client. The transmission is sent from the Client's or its
agent's system to SSB's or its agent's system with encryption.
[ ] REPETITIVE WIRES
For situations where funds are transferred periodically from an existing
authorized account to the same payee (destination bank and account number) and
only the date and currency amount are variable, a repetitive wire may be
implemented. Repetitive wires will be subject to a $10 million limit. If the
payment order exceeds the $10 million limit, the instruction will be confirmed
by Telephone Confirmation (Call Back) or Test Key prior to execution. Repetitive
wire instructions must be reconfirmed annually. Clients may establish Repetitive
Wires by following the agreed upon security procedures as described by Telephone
Confirmation (Call Back) or Test Key.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts. IF THIS OPTION IS SELECTED, CHOOSE EITHER
TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER
$10 MILLION.
[ ] STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the dollar
amount are variable. Clients may establish Standby Instructions by following the
agreed upon security procedures as described by Telephone Confirmation (Call
Back) or Test Key. Additional paperwork will be required from insurance Clients
using 1031 drawdowns.
This option is used for transactions that include but are not limited to
Foreign Exchange Contracts, Time Deposits and Tri-Party Repurchase Agreements.
IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE CONFIRMATION OR TEST KEY TO
BE USED AS A SECONDARY PROCEDURE WHEN OVER $10 MILLION.
[ ] TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of the
payment order, will contact someone other than the originator at the Client's
location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have
the capability to use other security procedures. PLEASE COMPLETE THE TELEPHONE
CONFIRMATION INSTRUCTIONS ATTACHED AS A SCHEDULE HERETO.
[ ] TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide test
keys if this option is chosen. SSB will verify that the instruction contains the
signature of an authorized person and prior to execution of the payment order,
will authenticate the test key provided with the corresponding test key at SSB.
Selection of this alternative is appropriate for Clients who do not have
the capability to use other security procedures.
The individual signing below must be authorized to sign contract on behalf of
the client. The execution of payment orders under the selected Security
Procedures is governed by the Funds Transfer Operating Guidelines, which are
incorporated by reference.
FIXED INCOME SHARES
By:
-------------------------------------
Authorized Signature
-----------------------------------------
Type or Print Name
-----------------------------------------
Title
-----------------------------------------
Date
30
SCHEDULE TO FUNDS TRANSFER OPERATING GUIDELINES
AND SECURITY PROCEDURES SELECTION FORM
CLIENT/INVESTMENT MANAGER:
------------------------------------------------------
Company Name
ACCOUNT NUMBER(S):
--------------------------------------------------------------
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
Name Name
Address Address
City/State/Zip Code City/State/Zip Code
Telephone Number Telephone Number
Facsimile Number Facsimile Number
SWIFT Number
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
------------------------- ------------------------- -------------------------
-------------------------------------------- -------------------------
APPROVAL (FOR STATE STREET USE ONLY) DATE
31
SCHEDULE A: STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Benin via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Canada State Street Trust Company Canada
Cayman Islands Bank of Nova Scotia Trust Company (Cayman) Ltd.
Chile BankBoston, N.A.
People's Republic Hongkong and Shanghai Banking Corporation Limited,
of China Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus Cyprus Popular Bank Ltd.
Czech Republic Eeskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt HSBC Bank Egypt S.A.E.
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Estonia Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
32
SCHEDULE A: STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Hong Kong Standard Chartered Bank
Hungary HVB Bank Hungary Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
Hongkong and Shanghai Banking Corporation Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
Japan Mizuho Corporate Bank Ltd.
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Hongkong and Shanghai Banking Corporation Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Mauritius Hongkong and Shanghai Banking Corporation Limited
Mexico Banco Nacional de Mexico S.A.
33
SCHEDULE A: STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited -
Netherlands KAS BANK N.V.
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Nigeria Stanbic Bank Nigeria Limited
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Romania ING Bank N.V.
Russia ING Bank (Eurasia) ZAO, Moscow
Senegal via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Singapore The Development Bank of Singapore Limited
Slovak Republic Eeskoslovenska Obchodni Banka, A.S., pobocka zahranicnej banky v SR
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Nedcor Bank Limited
Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka Hongkong and Shanghai Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
34
SCHEDULE A: STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Togo via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Uganda Barclays Bank of Uganda Limited
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
35
SCHEDULE B: STATE STREET GLOBAL CUSTODY NETWORK DEPOSITORIES
OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Austria Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division)
Bahrain Exchange Clearing, Settlement, and Depository System of the Bahrain Stock
Belgium Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A.
Banque Nationale de Belgique
Benin Depositaire Central - Banque de Reglement
Bermuda Bermuda Securities Depository
Brazil Central de Custodia e de Liquidacao Financeira de Titulos Privados (CETIP)
Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia (SELIC)
Bulgaria Bulgarian National Bank
Central Depository AD
Burkina Faso Depositaire Central - Banque de Reglement
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic China Securities Depository and Clearing Corporation Limited
of China Shanghai Branch
China Securities Depository and Clearing Corporation Limited Shenzhen Branch
Colombia Deposito Central de Valores
Deposito Centralizado de Valores de Colombia S..A. (DECEVAL)
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
Cyprus Central Depository and Central Registry
Czech Republic Czech National Bank
Stredisko cennych papiru - Ceska republika
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository S.A.E.
Estonia Eesti Vaartpaberikeskus
Finland Suomen Arvopaperikeskus (Finnish Central Securities Depository)
France Euroclear France
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SCHEDULE B: STATE STREET GLOBAL CUSTODY NETWORK DEPOSITORIES
OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Germany Clearstream Banking AG, Frankfurt
Greece Apothetirion Titlon AE - Central Securities Depository
Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry
Form
Guinea-Bissau Depositaire Central - Banque de Reglement
Hong Xxxx Xxxxxxx Xxxxxxxxxxxx Xxxx
Xxxx Xxxx Securities Clearing Company Limited
Hungary Kozponti Elszamolohaz es Ertektar (Budapest) Rt. (KELER)
Iceland Iceland Securities Depository Limited
India Central Depository Services India Limited
National Securities Depository Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Bank of Japan - Net System
Japan Securities Depository Center (JASDEC) Incorporated
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of Financial Instruments for
Lebanon and the Middle East (Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia
Mali Depositaire Central - Banque de Reglement
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
37
SCHEDULE B: STATE STREET GLOBAL CUSTODY NETWORK DEPOSITORIES
OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Mexico S.D. Indeval, S.A. de C.V.
Morocco Maroclear
Netherlands NECIGEF) Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.
New Zealand New Zealand Central Securities Depository Limited
Niger Depositaire Central - Banque de Reglement
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central Securities Depository)
Oman Muscat Depository & Securities Registration Company, SAOC
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a department of the
Palestine Stock Exchange
Panama Central Latinoamericana de Valores, S.A. (LatinClear)
Peru Caja de Valores y Liquidaciones, Institucion de
Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX) of the Bureau of Treasury
Poland Krajowy Depozyt Papierow Wartosciowych S.A.(National Depository of Securities)
Central Treasury Bills Registrar
Portugal INTERBOLSA - Sociedade Gestora de Sistemas de Liquidacao e de
Sistemas Centralizados de Valores Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR), a
department of the Doha Securities Market
Romania Bucharest Stock Exchange Registry Division
National Bank of Romania
National Securities Clearing, Settlement and Depository Company
Russia Vneshtorgbank, Bank for Foreign Trade of the Russian Federation
Senegal Depositaire Central - Banque de Reglement
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic National Bank of Slovakia
Stredisko cennych papierov SR, a.s.
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SCHEDULE B: STATE STREET GLOBAL CUSTODY NETWORK DEPOSITORIES
OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Slovenia KDD - Centralna klirinsko depotna xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic (STRATE) Ltd.
Spain Banco de Espana
Servicio de Compensacion y Liquidacion de Valores, S.A.
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Company Limited
Thailand Bank of Thailand
Thailand Securities Depository Company Limited
Togo Depositaire Central - Banque de Reglement
Trinidad and Tobago Trinidad and Tobago Central Bank
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs Mobilieres (STICODEVAM)
Turkey Central Bank of Turkey
Takas ve Saklama Bankasi A.S. (TAKASBANK)
Uganda Bank of Uganda
Ukraine Mizhregionalny Fondovy Souz
National Bank of Ukraine
United Arab Emirates Clearing and Depository System, a department of theDubai Financial Market
Venezuela Banco Central de Venezuela
Vietnam Securities Registration, Clearing and Settlement,
Depository Department of the Securities Trading Center
Zambia Bank of Zambia
XxXX Central Shares Depository Limited
TRANSNATIONAL
Euroclear
Clearstream Banking AG
39
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
(SCHEDULED FREQUENCY)
The Guide to Custody in World Markets An overview of settlement and safekeeping procedures,
(hardcopy annually and regular custody practices and foreign investor considerations for the
website updates) markets in which State Street offers custodial services.
Global Custody Network Review Information relating to Foreign Sub-Custodians in State Street's Global
(annually) Custody Network. The Review stands as an integral part of the materials
that State Street provides to its U.S. mutual fund clients to assist
them in complying with SEC Rule 17f-5. The Review also gives insight
into State Street's market expansion and Foreign Sub-Custodian
selection processes, as well as the procedures and controls used to
monitor the financial condition and performance of our Foreign
Sub-Custodian banks.
Securities Depository Review Custody risk analyses of the Foreign Securities Depositories presently
(annually) operating in Network markets. This publication is an integral part
of the materials that State Street provides to its U.S. mutual fund
clients to meet informational obligations created by SEC Rule 17f-7.
Global Legal Survey With respect to each market in which State Street offers custodial
(annually) services, opinions relating to whether local law restricts (i) access
of a fund's independent public accountants to books and records of a
Foreign Sub-Custodian or Foreign Securities System, (ii) a fund's
ability to recover in the event of bankruptcy or insolvency of a
Foreign Sub-Custodian or Foreign Securities System, (iii) a fund's
ability to recover in the event of a loss by a Foreign Sub-Custodian or
Foreign Securities System, and (iv) the ability of a foreign investor
to convert cash and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the contracts that State Street has entered into with each
(annually) Foreign Sub-Custodian that maintains U.S. mutual fund assets in the
markets in which State Street offers custodial services.
Global Market Bulletin Information on changing settlement and custody conditions in markets
(daily or as necessary) where State Street offers custodial services. Includes changes in
market and tax regulations, depository developments, dematerialization
information, as well as other market changes that may impact State
Street's clients.
Foreign Custody Advisories For those markets where State Street offers custodial services that
(as necessary) exhibit special risks or infrastructures impacting custody, State
Street issues market advisories to highlight those unique market
factors which might impact our ability to offer recognized custody
service levels.
Material Change Notices Informational letters and accompanying materials confirming State
(presently on a quarterly Street's foreign custody arrangements, including a summary of material
basis or as otherwise necessary) changes with Foreign Sub-Custodians that have occurred during the
previous quarter. The notices also identify any material changes in the
custodial risks associated with maintaining assets with Foreign
Securities Depositories.
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