TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 19th day of August, 2002, by and between Fresco'sm'
Index Shares Funds, a Massachusetts business trust, having its principal office
and place of business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Trust"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, having its principal office and place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Bank").
WHEREAS, the Trust is registered as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Trust intends to initially offer shares in two series, the
Fresco'sm' Dow Xxxxx STOXX 50'sm' Fund and the Fresco'sm' Dow Xxxxx Euro STOXX
50'sm' Fund (each such series, together with all other series subsequently
established by the Trust and made subject to this Agreement in accordance with
Section 10, being herein referred to as a "Fund", and collectively as the
"Funds"); and
WHEREAS, the Trust will issue and redeem shares of each Fund only in
aggregations of shares known as "Creation Units" (currently 50,000 shares in the
case of each Fund) (each a "Creation Unit") principally in kind for portfolio
securities of the respective Fund, as more fully described in the prospectus and
statement of additional information of the Trust (together, the "Prospectus")
included in its registration statement on Form N-1A (the "Registration
Statement") Registration Nos. 811-21145 and 333-92106; and
WHEREAS, the shares of each Fund have been approved for listing on the New York
Stock Exchange (the "Exchange"), subject to notice of issuance; and
WHEREAS, The Depository Trust Company, a limited purpose trust company organized
under the laws of the State of New York ("DTC"), or its nominee, will be the
initial record or registered owner (the "Shareholder") of all shares; and
WHEREAS, the Trust, on behalf of the Funds, desires to appoint the Bank as its
transfer agent, dividend disbursing agent, and agent in connection with certain
other activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
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l. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the Trust,
on behalf of the Funds, hereby employs and appoints the Bank to act as, and
the Bank agrees to act as its transfer agent for the authorized and issued
shares of beneficial interest, $ 0.01 par value of each Fund listed on
Annex A hereto ("Shares"), and as the Trust's dividend disbursing agent.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Trust on behalf of each of the Funds, as
applicable, and the Bank, the Bank shall:
(i) Review upon receipt from the Trust's distributor (the
"Distributor") orders from Authorized Participants (as defined in
the Prospectus) for the purchase of Creation Units which have
been submitted to the Distributor and based on its records and
the records of DTC determine whether the order if accepted will
result in the depositor of the Fund Deposit owning or appearing
to own eighty percent (80%) of the outstanding Shares of such
Fund and provide advice of the same to the Distributor;
(ii) Receive from the Distributor purchase orders from Authorized
Participants (as defined in the Prospectus) for Creation Units
received in good form and accepted by or on behalf of the Trust
by the Distributor; generate and transmit or cause to be
generated and transmitted confirmation of receipt of such
purchase orders to the Authorized Participants submitting the
same; transmit appropriate trade instructions to the National
Securities Clearance Corporation, if applicable, and pursuant to
such orders issue the appropriate number of Shares of the
applicable Fund and hold such Shares in the account of the
Shareholder for each of the respective Funds of the Trust;
(iii) Receive from Authorized Participants redemption requests;
deliver the appropriate documentation thereof to the authorized
custodian of the Trust (the "Custodian"); generate and transmit
or cause to be generated and transmitted confirmation of receipt
of such redemption requests to the Authorized Participants
submitting the same; transmit appropriate trade instructions to
the National Securities Clearance Corporation, if applicable; and
redeem the appropriate number of Creation Units held in the
account of the Shareholder and, at the appropriate time, cause to
be paid over in the appropriate manner monies to the redeeming
party.
(iv) Prepare and transmit by means of DTC's book-entry system payments
for dividends and distributions declared by the Trust on behalf
of the applicable Fund;
(v) Maintain the record of the name and address of the Shareholder
and the
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number of Shares issued by each Fund of the Trust and held by the
Shareholder;
(vi) Record the issuance of Shares of the Trust and maintain pursuant
to SEC Rule 17Ad-10(e) a record of the total number of Shares of
the Trust, and of each Fund, which are authorized, based upon
data provided to it by the Trust, and issued and outstanding. The
Bank shall also provide the Trust on a regular basis with the
total number of Shares of each Fund which are authorized and
issued and outstanding and shall have no obligation, when
recording the issuance of Shares, to monitor the issuance of such
Shares or to take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the sole
responsibility of the Trust.
(vii) Prepare and transmit to the Trust and the Administrator all
information with respect to purchases and redemptions of Shares
as may be required to be reported to the Exchange and any other
applicable securities exchange;
(viii) On days that a Fund may accept orders for purchases or
redemptions, calculate and transmit to the Custodian and the
Trust's administrator the number of outstanding Shares for each
Fund;
(ix) On days that a Fund may accept orders for purchases or
redemptions, transmit to the Custodian, the Trust and DTC the
amount of Shares purchased or redeemed for such Fund;
(x) Confirm to DTC the number of Shares evidenced by each global
certificate in registered form (the "Global Certificate") issued
to the Shareholder, as DTC may reasonably request;
(xi) Prepare and deliver other reports, information and documents to
DTC as DTC may reasonably request;
(xii) Extend the voting rights to the Shareholder and/or beneficial
owners of Shares in accordance with the policies and procedures
of DTC for book-entry only securities;
(xiii) Create and maintain all necessary books and records of the
Trust, including those that are specified in this Agreement, in
accordance with applicable laws, rules and regulations,
including, but not limited to records required by Section 31(a)
of the 1940 Act and the rules promulgated thereunder, and those
records pertaining to the various functions performed the Bank
hereunder. All records shall be available upon reasonable notice
and at reasonable times for inspection and authorized use by the
Trust and its agents and, where applicable, all records shall be
maintained by the Bank for the periods and in the places required
by Rule 31a-2 under the 1940 Act.
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(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), the Bank shall: perform
the customary services of a transfer agent and dividend disbursing
agent including but not limited to: maintaining the account of the
Shareholder, obtaining a list of DTC participants holding interests in
the Global Certificate at the request of the Trust, mailing of
proxies, receiving proxies, withholding taxes on all accounts,
including non-resident alien accounts, mailing shareholder reports,
prospectuses, including any amendments and supplements thereto and
other shareholder communications to the Shareholder or DTC
participants or beneficial owners of Shares at the request of the
Trust and providing Shareholder account information.
(c) For so long as Shares are represented by Global Certificates, the
following shall be delivered to DTC for delivery to beneficial owners
in accordance with the procedures for book-entry only securities of
DTC:
(i) Annual and semi-annual reports of the Trust;
(ii) Prospectus and amendments and supplements to the Prospectus,
including stickers; and
(iii) Other communications as may be required by law or reasonably
requested by the Trust.
(d) The Bank shall provide additional services on behalf of the Trust
(i.e., escheatment services) which may be agreed upon in writing
between the Trust and the Bank.
2. Fees and Expenses
2.1 The Bank shall receive from the Trust such compensation for the Transfer
Agent's services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties, and
initially set forth in the fee schedule as agreed to by the parties and as
amended from time to time, which represents the combined fee schedule for
custody, administration and transfer agency services to be provided by the
Bank and its affiliates to the Trust. The fees are accrued daily and billed
monthly and shall be due and payable upon receipt of the invoice. Upon the
termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to
the proportion which such part bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
2.2 In addition to the fee paid under Section 2.1 above, the Trust agrees on
behalf of each of the Funds to reimburse the Bank for reasonable
out-of-pocket expenses, set forth in the Fee Schedule agreed to in
connection with this Agreement. In addition, any other reasonable expenses
incurred by the Bank at the request or with the consent of the Trust, will
be reimbursed by the Trust on behalf of the applicable Fund.
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2.3 The Trust agrees on behalf of each of the Funds to pay all fees and
reimbursable expenses within five days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies, Trust
reports and other mailings to all shareholder accounts shall be advanced to
the Bank by the Trust at least three (3) days prior to the mailing date of
such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Trust that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
3.2 It is in full compliance with all applicable federal, state and local laws
with respect to its duties under this Agreement.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to act
as transfer agent and dividend disbursing agent and to enter into and
perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. Representations and Warranties of the Trust
The Trust represents and warrants to the Bank that:
4.1 It is a Massachusetts Business Trust duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts.
4.2 It is empowered under applicable laws and by its Declaration of Trust and
By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Declaration of Trust and By-Laws
have been taken to authorize it to enter into and perform this Agreement.
4.4 It is an open-end management investment company registered under the 0000
Xxx.
4.5 A registration statement under the Securities Act of 1933, as amended, on
behalf of each of the Funds will be effective as of the first date that
each Fund offers shares and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of the Trust being offered for sale.
5. Data Access and Proprietary Information
5.1 The Trust acknowledges that the data bases, computer programs, screen
formats, report
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formats, interactive design techniques, and documentation manuals furnished
to the Trust by the Bank as part of the Trust's ability to access certain
Trust-related data ("Customer Data") maintained by the Bank on data bases
under the control and ownership of the Bank or other third party ("Data
Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of
substantial value to the Bank or other third party. In no event shall
Proprietary Information be deemed Customer Data. The Trust agrees to treat
all Proprietary Information as proprietary to the Bank and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder and as may be required in
the ordinary course of the Trust's business. Without limiting the
foregoing, the Trust agrees for itself and its employees and agents:
(a) to access Customer Data solely from locations as may be designated in
writing by the Bank and solely in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform the Bank in a timely manner of such fact upon discovery of
such unauthorized access and dispose of such information in accordance
with the Bank's instructions;
(d) to refrain from causing or allowing the Proprietary Information
acquired hereunder from being retransmitted to any other computer
facility or other location, except as may be required in the ordinary
course of the Trust's business with the prior written consent of the
Bank;
(e) that the Trust shall have access only to those authorized transactions
[in Proprietary Information?] agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to protect
at the Bank's expense the rights of the Bank in Proprietary
Information at common law, under federal copyright law and under other
federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section 5.1
shall survive any earlier termination of this Agreement.
5.2 If the Trust notifies the Bank that any of the Data Access Services do not
operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely manner
to correct such failure. Organizations from which the Bank may obtain
certain data included in the Data Access Services are solely responsible
for the contents of such data and the Trust agrees to make no claim against
the Bank arising out of the contents of such third-party data, including,
but not limited to, the accuracy thereof. DATA ACCESS SERVICES AND ALL
COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION
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THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE BANK 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.
5.3 If the transactions available to the Trust include the ability to originate
electronic instructions to the Bank in order to (i) effect the transfer or
movement of cash or Shares or (ii) transmit Shareholder information or
other information, then in such event the Bank shall be entitled to rely on
the validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity
with security procedures established by the Bank from time to time.
6. Responsibility and Liability of the Trust and the Bank
6.1 The Bank shall not be responsible for, and the Trust shall on behalf of the
applicable Fund indemnify and hold the Bank harmless from and against, any
and all losses, damages, action, suits, claims, costs, charges, payments,
expenses, including reasonable counsel fees, and liability (collectively,
"Losses") arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken
in good faith and without negligence or willful misconduct.
(b) The Trust's negligence, willful misconduct or lack of good faith which
arise out of the breach of any representation or warranty of the Trust
hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors of
information, records, documents or services which (i) are received by
the Bank or its agents or subcontractors, and (ii) have been prepared,
maintained or performed by the Trust or any other person or firm on
behalf of the Trust.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Trust on behalf
of the applicable Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
6.2 The Trust, its Board of Trustees, officers and agents shall not be liable
for any Losses that arise out of the negligent acts or omissions, bad
faith, willful misconduct or material breach of this Agreement by the Bank,
its officers, directors or employees or any of its agents or subcustodians
in connection with the activities undertaken pursuant to this Agreement.
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6.3 At any time the Bank may apply to any officer of the Trust for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under
this Agreement. The Bank, its agents and subcontractors shall be entitled
to rely upon any paper or document, reasonably believed to be genuine and
to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided the Bank or
its agents or subcontractors by machine readable input, telex, CRT data
entry or other similar means authorized by the Trust, and shall not be held
to have notice of any change of authority of any person, until receipt of
written notice thereof from the Trust.
6.4 In order that the indemnification provisions contained in Section 6.1 shall
apply, upon the assertion of a claim for which the Trust may be required to
indemnify the Bank, the Bank shall promptly notify the Trust of such
assertion, and shall keep the Trust advised with respect to all
developments concerning such claim. The Trust shall have the option to
participate with the Bank in the defense of such claim or to defend against
said claim in its own name or in the name of the Bank. The Bank shall in no
case confess any claim or make any compromise in any case in which the
Trust may be required to indemnify the Bank except with the Trust's prior
written consent, which consent shall not be unreasonably withheld.
7. Standard of Care
The Bank shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not
be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct or that of its employees.
8. Covenants of the Trust and the Bank
8.1 The Trust shall on behalf of each of the Funds promptly furnish to the Bank
the following:
(a) A certified copy of the resolution of the Board of Trustees of the
Trust authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto.
8.2 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the 1940 Act, and the Rules thereunder, the Bank
agrees that all such records prepared or maintained by the Bank relating to
the services to be performed by the Bank hereunder are the property of the
Trust and will be preserved, maintained and made available in accordance
with such Section and Rules, and will be surrendered promptly to the Trust
on and in accordance with its request.
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8.3 The Bank and the Trust agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
8.4.1 The bank affirms that it has procedures in place reasonably designed to
protect the privacy of non-public personal consumer/customer financial
information.
8.5 In case of any requests or demands for the inspection of the Shareholder
records of the Trust, the Bank will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder
records to such person.
9. Termination of Agreement
9.1 This Agreement may be terminated by either party upon ninety (90) days
written notice to the other.
9.2 Should the Trust exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Trust on behalf of the applicable Fund(s). Additionally, the
Bank reserves the right to charge for any other reasonable expenses
associated with such termination.
10. Additional Series
In the event that the Trust establishes one or more series of Shares
in addition to the Funds with respect to which it desires to have the
Bank render services as transfer agent under the terms hereof, it
shall so notify the Bank in writing, and if the Bank agrees in writing
to provide such services, such series of Shares shall become a Fund
hereunder.
11. Assignment
11.1 Except as provided in Section 11.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
11.3 The Bank may, without further consent on the part of the Trust,
subcontract for the performance, in whole or in part, of this Agreement
with (i) Boston Financial Data Services, Inc., a Massachusetts
corporation ("BFDS") which is duly registered as a transfer agent
pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended ("Section 17A(c)(2)"), (ii) a BFDS subsidiary duly registered as
a transfer agent pursuant to Section 17A(c)(2), (iii) a BFDS affiliate or
(iv) Boston EquiServe Trust Company, N.A.; provided, however, that the
Bank shall be as fully responsible to
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the Trust for the acts and omissions of any subcontractor as it is for its
own acts and omissions.
12. Amendment
This Agreement may be amended or modified by a written agreement executed
by both parties and authorized or approved by a resolution of the Board of
Trustees of the Trust.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts,
without regard to its conflict of laws provisions.
14. Force Majeure
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to perform
or otherwise from such causes.
15. Consequential Damages
Neither party to this Agreement shall be liable to the other party or any
third party for consequential damages in connection with this Agreement or
for any consequential damages arising out of any act or failure to act
hereunder.
16. Merger of Agreement
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
17. Limitations of Liability of the Trustees and Shareholders
17.1 The Declaration of Trust, dated February 13, 2002, which is hereby referred
to and a copy of which is on file with the Secretary of The Commonwealth of
Massachusetts, provides that the name "Fresco'sm' Index Shares Funds" means
the Trustees from time to time serving (as Trustees but not personally)
under such Declaration of Trust. It is expressly acknowledged and agreed
that the obligations of the Trust hereunder shall not be binding upon any
of the shareholders, Trustees, officers, employees or agents of the Trust
personally, but shall bind only the trust property of the Trust, as
provided in the Declaration of Trust. The execution and delivery of this
Agreement have been authorized by the Trustees of the Trust and signed by
an officer of the Trust, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property
of
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the Trust as provided in the Declaration of Trust.
17.2 This Agreement is an agreement entered into between the Bank and the Trust
with respect to each Fund. With respect to any obligation of the Trust, on
behalf of any Fund arising out of this Agreement, the Bank shall look for
payment or satisfaction of such obligation solely to the assets of the Fund
to which such obligation relates as though the Bank had separately
contracted with the Trust by separate written instrument with respect to
each Fund.
18. Notices
Any notice or other communication authorized or required by this Agreement
to be given to either party shall be in writing and deemed to have been
given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other):
if to the Trust, on behalf of a Fund:
Fresco'sm' Index Shares Funds
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Fax number (000) 000-0000
Attention: Xxx X. Doberman, Esq.
if to the Bank:
State Street Bank and Trust Company
One Federal Street
Mail Stop, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
19. Severability
In the event any provision of this Agreement shall be held unenforceable or
invalid for any reason, the remainder of the Agreement shall remain in full
force and effect.
20. Counterparts
This Agreement may be executed by the parties hereto in any number of
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
21. Reproduction of Documents
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties
hereto all/each agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or
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administrative proceeding, whether or not the original is in existence and
whether or not such reproduction was made by a party in the regular course
of business, and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
FRESCO'sm' INDEX SHARES FUNDS
BY: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
BY: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
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ANNEX A
Fresco'sm' Dow Xxxxx STOXX 50'sm' Fund
Fresco'sm' Dow Xxxxx Euro STOXX 50'sm' Fund
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