CUSTODIAN CONTRACT
Between
XXXX XXXXX INCOME TRUST, INC.
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
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Page
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1. Employment of Custodian and Property to be Held By
It...................................................................1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian....................................1
2.1 Holding Securities..........................................1
2.2 Delivery of Securities......................................1
2.3 Registration of Securities..................................4
2.4 Bank Accounts...............................................4
2.5 Payments for Shares.........................................4
2.6 Investment and Availability of Federal Funds................5
2.7 Collection of Income........................................5
2.8 Payment of Fund Monies......................................5
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased.............................6
2.10 Payments for Repurchases or Redemptions
of Shares of the Fund.......................................6
2.11 Appointment of Agents.......................................7
2.12 Deposit of Fund Assets in Securities System.................7
2.13 Segregated Account..........................................8
2.14 Ownership Certificates for Tax Purposes.....................9
2.15 Proxies.....................................................9
2.16 Communications Relating to Fund
Portfolio Securities........................................9
2.17 Proper Instructions.........................................9
2.18 Actions Permitted Without Express Authority................10
2.19 Evidence of Authority......................................10
3. Duties of Custodian With Respect to the Books
of Account and Calculation of Net Asset Value
and Net Income......................................................10
4. Records.............................................................11
5. Opinion of Corporation's Independent Certified Public Accountants...11
6. Reports to Corporation by Independent Certified Public Accountants..11
7. Compensation of Custodian...........................................11
8. Responsibility of Custodian.........................................12
9. Effective Period, Termination and Amendment.........................12
10. Successor Custodian.................................................13
11. Interpretive and Additional Provisions..............................13
12. Massachusetts Law to Apply..........................................14
13. Additional Funds....................................................14
14. Prior Contracts.....................................................14
15. Headings............................................................14
16. Notices.............................................................15
CUSTODIAN CONTRACT
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This Contract between Xxxx Xxxxx Income Trust, Inc., a Maryland
corporation having its principal place of business at 0 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 ("Corporation'), on behalf of Xxxx Xxxxx U.S.
Government Intermediate-Term Portfolio and Xxxx Xxxxx Investment Grade Income
Portfolio (collectively, the "Funds"), and State Street Bank and Trust Company,
a Massachusetts trust company, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000 ("Custodian"),
WITNESSETH, that in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
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The Corporation hereby employs the Custodian as the custodian of its
assets of each Fund pursuant to the provisions of the Corporation's Articles of
Incorporation and By-Laws and the terms and conditions hereof. Each Fund agrees
to deliver to the Custodian all securities and cash owned by the Fund, and all
payments of income, payments of principal or capital distributions received by
the Fund with respect to all securities owned by the Fund from time to time, and
the cash consideration received by the Fund for such new or treasury shares of
the common
stock ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-custodians,
but only after the prior express written consent of the Corporation in
accordance with an applicable vote by the Board of Directors of the Corporation,
and provided that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By
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the Custodian
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2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Fund all non-cash property, including all
securities owned by the Fund, other than securities which are
maintained pursuant to Section 2.12 in a clearing agency registered
with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934 ("Exchange Act") which acts as a
securities depository or in a book-entry system authorized
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by the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as a "Securities System."
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by each Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of full payment in connection with any
repurchase agreement related to such securities entered into
by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
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5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee or nominees
of the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.11 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
provided that in such case, the Custodian shall have no
responsibility or liability for any loss arising from such
delivery of such securities prior to
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receiving payment for such securities except as may arise from
the Custodian's own negligence or willful misconduct;
8) 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;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, options, rights or similar
securities, the surrender thereof in the exercise of such
warrants, options, rights or similar securities or the
surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the
new securities and cash, if any, are to be delivered to the
Custodian;
10) For delivery in connection with any loans of securities made
by a Fund, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the
Corporation,
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which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral
is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Fund prior to the receipt
of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Corporation on behalf of a Fund, the
Custodian and a broker-dealer registered under the Exchange
Act and a member of the National Association of Securities
Dealers, Inc. ("NASD"), relating to compliance with the rules
of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization
or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
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13) For delivery in accordance with the provisions of any
agreement among the Corporation on behalf of the Fund, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to the compliance with
the rules of the Commodity Futures Trading Commission and/or
any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund;
14) For release of securities to designated brokers under covered
call options; provided however, that such securities shall be
released only upon payment to the Custodian of monies for the
premium due and a receipt for the securities which are to be
held in escrow. Upon the exercise of the option, or at
expiration, the Custodian will receive from brokers the
securities previously deposited. The Custodian will act
strictly in accordance with Proper Instructions in the
delivery of securities to be held in escrow and will have no
responsibility or liability for any such securities which are
not returned promptly when due other than to make proper
request for such return;
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15) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the Fund's currently effective prospectus and statement of
additional information ("prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption;
and
16) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian on behalf
of a Fund (other than bearer securities) shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any
nominee of the
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Custodian which nominee shall be assigned exclusively to the Fund,
unless the Corporation has authorized in writing as to a Fund the
appointment of a nominee to be used in common with other registered
investment companies having the same investment adviser as the Fund, or
in the name or nominee name of any agent appointed pursuant to Section
2.11 or in the name or nominee name of any sub-custodian appointed
pursuant to Article 1. All securities accepted by the Custodian on
behalf of a Fund under the terms of this Contract shall be in "street
name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company Act
of 1940, as amended (the "1940 Act"). Funds held by the Custodian for a
Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to
act as a custodian under the 1940 Act
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and that each such bank or trust company and the funds to be deposited
with each such bank or trust company shall be approved by vote of a
majority of the Board of Directors of the Corporation. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the distributor
for each Fund's Shares or from the Transfer Agent for the Fund and
deposit into such Fund's account such payments as are received for
Shares of the Fund issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Corporation with
respect to each Fund and the Transfer Agent of any receipt by it of
payments for Shares of the Fund.
2.6 Investment and Availability of Federal Funds. Upon mutual agreement
between the Corporation on behalf of the Fund and the Custodian, the
Custodian shall, upon the receipt of Proper Instructions:
1) invest, in such instruments as may be set forth in such
instructions on the same day as received, all federal funds
received prior to the time agreed upon between the Custodian
and the Corporation; and
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2) make federal funds available to the Fund as of specified times
agreed upon from time to time by the Corporation and the
Custodian in the amount of checks received in payment for
Shares of the Fund which are deposited into the Fund's
account.
2.7 Collection of Income. The Custodian shall collect on a timely basis all
income and other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or pursuant
to custom in the securities business, and shall collect on a timely
basis all income and other payments with respect to bearer securities
if, on the date of payment by the issuer, such securities are held by
the Custodian or its agent thereof and shall credit such income, as
collected, to such Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for
payment all coupons and other income items requiring presentation as
and when they become due and shall collect interest when due on
securities held hereunder. Income due a Fund on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Corporation on behalf of such Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Corporation with such information
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or data as may be necessary to assist the Fund in arranging for the
timely delivery to the Custodian of the income to which the Fund is
properly entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of a Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options for the account of the Fund but only (a) against the
delivery of such securities to the Custodian or evidence of
title to options, future contracts or options on future
contracts, to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad
which is qualified under the Investment Fund Act of 1940, as
amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the
name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth
in Section 2.12 hereof; (c) in the case of repurchase
agreements entered into between the
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Fund and the Custodian, or another bank, or a broker-dealer
which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank
with such securities (notwithstanding that the written
agreement to repurchase will be received subsequently) or (ii)
if the agreement is with the Custodian, against delivery of
the receipt evidencing purchase by the Fund of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares of the Fund issued
by the Corporation as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal
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fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Corporation;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee of the Corporation signed by an officer of the Fund
and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased. In
any and every case where payment for purchase of securities for the
account of a Fund is made by the Custodian in advance of receipt of the
securities purchased
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in the absence of specific written instructions from the Fund to so pay
in advance, the Custodian shall be absolutely liable to the Fund for
such securities to the same extent as if the securities had been
received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of the Fund. From
such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and By-Laws of the
Corporation and any applicable votes of the Board of Directors pursuant
thereto, the Custodian shall, upon receipt of instructions from the
Transfer Agent, make funds available for payment to holders of Shares
or their authorized agents who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares and for payment to
the distributor of the Fund's Shares for its repurchase of Shares as
agent for the Fund. In connection with the redemption or repurchase of
Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders or by the
distributor of the Fund's Shares. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, which checks have been
furnished by a holder of Shares, when
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presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between the
Corporation and the Custodian.
2.11 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Fund in a Securities System in
accordance with applicable rules and regulations, if any, of the
Federal Reserve Board, Securities and Exchange Commission and U.S.
Department of the Treasury and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
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2) The records of the Custodian with respect to securities of a
Fund which are maintained in a Securities System shall
identify by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the
account of a Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities
sold for the account of a Fund upon (i) receipt of advice from
the Securities System that payment for such securities has
been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer
and payment for the account of a Fund. Copies of all advices
from the Securities System of transfers of securities for the
account of a Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be provided to the Corporation
at its request. Upon request, the Custodian shall furnish the
Corporation confirmation of each transfer to or from the
account of the Fund in the form of a written advice or notice
and shall furnish to the
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Corporation copies of daily transaction sheets reflecting each
day's transactions in the Securities System for the account of
the Fund, on the next business day.
4) The Custodian shall provide the Corporation with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures
for safeguarding securities deposited in the Securities
System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to a Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their employees or
from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Corporation, a Fund shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against
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the Securities System or any other person which the Custodian
may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any such
loss or damage.
2.13 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the Corporation
on behalf of the Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Fund or
commodity futures contracts or options thereon purchased or sold by the
Fund, (iii) for the purposes of compliance by the
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Corporation with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Board of Directors or of the Executive Committee
signed by an officer of the Corporation and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper
corporate purposes.
2.14 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of a Fund held by it and in
connection with transfers of securities.
2.15 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of a Fund or a nominee of the Fund, all proxies, without
indication of the manner
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in which such proxies are to be voted, and shall promptly deliver to
the Corporation such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.16 Communications Relating to Fund Portfolio Securities. The Custodian
shall transmit promptly to the Corporation all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund) received
by the Custodian from issuers of the securities being held for the
Fund. With respect to tender or exchange offers, the Custodian shall
transmit promptly to the Corporation as to each Fund all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Corporation desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, it shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.17 Proper Instructions. Proper Instructions as used throughout this
Article 2 means a writing signed or initialed by one or more person or
persons as the Board of Directors shall
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have from time to time authorized. Each such writing shall set forth
the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested.
Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. Each Fund shall cause all oral instructions to be confirmed
in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary of the Corporation as to the authorization by the
Board of Directors of the Corporation accompanied by a detailed
description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford
adequate safeguards for each Fund's assets.
2.18 Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Corporation with respect
to a Fund:
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1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, provided that all such payments
shall be accounted for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Board of
Directors of the Corporation.
2.19 Evidence of Authority. The Custodian shall be protected in acting upon
any instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been
properly executed by or on behalf of a Fund. The Custodian may receive
and accept a certified copy of a vote of the Board of Directors of the
Corporation as conclusive evidence (a) of the authority of
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any person to act in accordance with such resolution (b) of any
determination or of any action by the Board of Directors pursuant to
the Articles of Incorporation or By-Laws of the Corporation as
described in such vote or resolution, and such vote or resolution may
be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
3. Duties of Custodian with Respect to the Books of Account and
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Calculation of Net Asset Value and Net Income
---------------------------------------------
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Corporation to
keep the books of account of each Fund and/or compute the net asset value per
share of the outstanding shares of each Fund or, if directed in writing to do so
by the Corporation, shall itself keep such books of account and/or compute such
net asset value per share of the Funds. If so directed, the Custodian shall also
calculate daily the net income of each Fund including the calculation of
distribution and advisory fees, all as described in the Fund's currently
effective Prospectus and Statement of Additional Information and shall advise
the Fund and the Transfer Agent daily of the total amounts of such fees and net
income and, if instructed in writing by an officer of the Corporation to do so,
shall advise the Transfer Agent periodically of the division of such net income
among its various components. The calculations of the net asset value per
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share and the daily income of each Fund shall be made at the time or times
described from time to time in the Fund's currently effective Prospectus and
Statement of Additional Information and in accordance with the requirements of
the 1940 Act and the rules thereunder.
4. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of each Fund under the 1940 Act, with particular attention to
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder applicable federal and
state tax laws and any other law or administrative rules or procedures which may
be applicable to the Funds. All such records shall be the property of the Fund
and shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of the
Corporation and employees and agents of the Securities and Exchange Commission.
The Custodian shall, at the Corporation's request, supply a Fund with a
tabulation of securities owned by the Fund and held by the Custodian and shall,
when requested to do so by or on behalf of the Fund and for such compensation as
shall be agreed upon between the Corporation and the Custodian, include
certificate numbers in such tabulations.
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5. Opinion of Corporation's Independent Certified Public Accountant
----------------------------------------------------------------
The Custodian shall take all reasonable action, as the Corporation may
from time to time request, to obtain from year to year favorable opinions from
the Corporation's independent certified public accountants with respect to its
activities hereunder in connection with the preparation of the Corporation's
Form N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
6. Reports to Corporation by Independent Certified Public Accountants
------------------------------------------------------------------
The Custodian shall provide the Corporation, at such times as the
Corporation may reasonably require, with reports by independent certified public
accountants on the accounting system, internal accounting control and procedures
for safeguarding securities including securities deposited and/or maintained in
a Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Corporation, and shall provide
reasonable
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assurance that any material inadequacies would be disclosed by such examination,
and, if there are no such inadequacies, the reports shall so state.
7. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation from each
Fund for its services and expenses as Custodian for such Fund, as agreed upon
from time to time between the Corporation and the Custodian.
8. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Corporation for any action taken or omitted by it in
good faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Corporation) on all matters, and
shall be without
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liability for any action reasonably taken or omitted pursuant to such advice.
Notwithstanding the foregoing the responsibility of the Custodian with respect
to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Corporation.
If the Corporation requires the Custodian to take any action with
respect to securities of a Fund, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund being liable for the payment of money or
incurring liability of some other form, the Corporation, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form satisfactory to it.
If the Corporation requires the Custodian to advance cash or securities
with respect to a Fund for any purpose or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, it shall be reimbursed by the
Fund for such advances or other costs within a reasonable time after the receipt
of written notice requesting reimbursement and any property at any time held for
the account of the Fund shall be security therefor and should the Fund fail
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to repay the Custodian within a reasonable time after receipt of written notice,
the Custodian shall be entitled to utilize available cash and to dispose of Fund
assets to the extent necessary to obtain reimbursement.
9. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the Custodian and the Corporation
and may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect not
sooner than thirty (30) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under Section 2.12 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary of the Corporation that the Board of Directors of the
Corporation has approved the initial use of a particular Securities System and
the receipt of an annual certificate of such Secretary or an Assistant Secretary
that the Board of Directors has reviewed the use of each Fund of such Securities
System, as required by Rule 17f-4 under the 1940 Act; provided further, however,
that the Corporation shall not amend or terminate this Contract in contravention
of any applicable federal or state regulations, or any provision of the Articles
of Incorporation or By-Laws of the Corporation, and
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further provided, that a Fund may at any time by action of its Board of
Directors of the Corporation (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, a Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements as
contemplated by this Contract.
10. Successor Custodian
-------------------
If a successor custodian for a Fund shall be appointed by the Board of
Directors of the Corporation, the Custodian shall, upon termination, deliver to
such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities then held by it hereunder and shall
transfer to an account of the successor custodian all of the Fund's securities
held in a Securities System.
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If this Contract is terminated with respect to a Fund and no such
successor custodian shall be appointed, the Custodian shall, in like manner, as
directed by vote of the holders of a majority of the outstanding Shares of the
Fund or upon receipt of a certified copy of a vote or resolution of the Board of
Directors of the Corporation, deliver at the office of the Custodian and
transfer such securities, funds and other properties of the Fund then held by it
hereunder and in accordance with such vote or resolution.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian
and all instruments held by the Custodian relative thereto and all other
property held by it under this Contract and to transfer to an account of such
successor custodian all of the Fund's securities held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
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In the event that securities, funds and other properties of a Fund
remain in the possession of the Custodian after the date of termination hereof
owing to failure of the Corporation to deliver to the Custodian the written
order or certified copy referred to above, or of the Corporation's Board of
Directors to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Contract relating to the duties and obligations of the Custodian shall
remain in full force and effect.
11. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and
the Corporation may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Contract as may in their joint opinion
be consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation or By-Laws of the Corporation. No interpretive or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Contract.
- 32 -
12. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
13. Additional Funds
----------------
In the event that the Corporation establishes series of Shares other
than the Funds, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, each such additional
series of Shares shall become a Fund hereunder.
14. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Corporation and the Custodian relating to the
custody of the Fund's assets. This Contract may not be assigned by the
Custodian, except as expressly provided in Section 10 hereof, without the prior
written consent of the Corporation.
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15. Headings
--------
The headings of the sections of this Contract are inserted for
reference and convenience only, and shall not affect the construction of this
Contract.
16. Notices
-------
Any notices shall be sufficiently given when sent by overnight,
registered or certified mail to the other party at the address of such party set
forth above or at such other address as such party may from time to time specify
in writing to the other party.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 19th day of June, 1987.
ATTEST XXXX XXXXX INCOME TRUST, INC.
/s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxxx
_____________________________ By ________________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ X. XxXxxxx /s/ X.X. Xxxxxx, Xx.
_____________________________ By ________________________________
Assistant Secretary Vice President
- 34 -
