CUSTODIAN CONTRACT
Between
XXXXXXXX XXXXXXXX/XXXXXX, XXXXXXX INVESTMENT TRUST II
and
STATE STREET BANK AND TRUST COMPANY
Global/Series/Trust
2lE593
TABLE OF CONTENTS
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
in the United States.......................................................................................2
2.1 Holding Investments.............................................................................2
2.2 Delivery of Securities..........................................................................2
2.3 Registration of Securities......................................................................4
2.4 Bank Accounts...................................................................................5
2.5 Availability of Federal Funds...................................................................5
2.6 Collection of Income............................................................................5
2.7 Payment of Fund Monies..........................................................................6
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.............................7
2.9 Appointment of Agents...........................................................................7
2.10 Deposit of Fund Assets in Securities Systems....................................................7
2.11 Fund Assets Held in the custodian's Direct Paper System.........................................8
2.12 Segregated Account..............................................................................9
2.13 Ownership Certificates for Tax Purposes........................................................10
2.14 Proxies........................................................................................10
2.15 Communications Relating to Portfolio Securities................................................10
3. Duties of the Custodian with Respect to Property of the Fund Held Outside of the
United States.............................................................................................11
3A. Interim Provisions.............................................................................11
3A.1 Appointment of IFTC and Chase as Sub-Custodian.................................................11
3A.2 Standard of Care; Liability....................................................................11
3A.3 Trust's Responsibility for Rules and Regulations...............................................11
3B. Post-Conversion Provisions.....................................................................12
3B.1 Appointment of Foreign Sub-Custodians..........................................................12
3B.2 Assets to be Held..............................................................................12
3B.3 Foreign Securities Systems.....................................................................12
3B.4 Holding Securities.............................................................................12
3B.5 Agreements with Foreign Banking Institutions...................................................13
3B.6 Access of Independent Accountants of the Fund..................................................13
3B.7 Reports by Custodian...........................................................................13
3B.8 Transactions in Foreign Custody Account........................................................13
3B.9 Liability of Foreign Sub-Custodians............................................................14
3B.10 Liability of Custodian.........................................................................14
3B.11 Reimbursement for Advances.....................................................................14
3B.12 Monitoring Responsibilities....................................................................15
3B.13 Branches of U.S. Banks.........................................................................15
3B.14 Tax Law........................................................................................15
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund....................................16
5. Proper Instructions.......................................................................................16
6. Actions Permitted without Express Authority...............................................................17
7. Evidence of Authority.....................................................................................17
8. Duties of Custodian with Respect to the Books of Account and Calculation of Net
Asset Value and Net Income................................................................................17
9. Records...................................................................................................18
10. Opinion of Fund's Independent Accountants.................................................................18
11. Reports to Fund by Independent Public Accountants.........................................................18
12. Compensation of Custodian.................................................................................18
13. Responsibility of Custodian...............................................................................19
14. Effective Period, Termination and Amendment...............................................................20
15. Successor Custodian.......................................................................................21
16. Interpretive and Additional Provisions....................................................................21
17. Additional Funds..........................................................................................22
18. Massachusetts Law to Apply................................................................................22
19. Prior Contracts...........................................................................................22
20. Shareholder Communications Election.......................................................................22
CUSTODIAN CONTRACT
This Contract between Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Investment
Trust II, a business trust organized and existing under the laws of
Massachusetts, having its principal place of business at 0000 Xxxxxx xx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 hereinafter called the "Fund", and State
Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
00000, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund 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 Fund intends to initially offer shares in two series,
the Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Emerging Markets Equity Fund and
Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Municipal Bond Fund (such series together
with all other series subsequently established by the Fund and made subject to
this Contract in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, 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
The Fund hereby employs the Custodian as the custodian of the assets
of the Portfolios of the Fund, including securities which the Fund, on behalf
of the applicable Portfolio desires to be held in places within the United
States ("domestic securities") and securities it desires to be held outside
the United States ("foreign securities") pursuant to the provisions of the
Declaration of Trust. The Fund on behalf of the Portfolio(s) agrees to deliver
to the Custodian all securities and cash of the Portfolios, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of
beneficial interest of the Fund representing interest in the Portfolios,
("Shares") as may be issued or sold from time to time. The Custodian shall not
be responsible for any property of a Portfolio held or received by the
Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only
in accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), 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. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities
1
depositories designated in Schedule A hereto but only in accordance with the
provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States
2.1 Holding Investments. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash
property, to be held by it in the United States including
all domestic securities owned by such Portfolio, other than
(a) securities which are maintained pursuant to Section 2 10
in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department
of the Treasury and certain federal agencies, (each, a "U.S.
Securities System") and (b) commercial paper of an issuer
for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited
and/or maintained in the Direct Paper System of the
Custodian (the "Direct Paper System") pursuant to Section
2.11.
2.2 Delivery of Securities. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the
Custodian or in a Securities System account of the Custodian
or in the Custodian's Direct Paper book entry system account
("Direct Paper System Account") only upon receipt of Proper
Instructions from the Fund on behalf of the applicable
Portfolio, 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
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities
entered into by the Portfolio;
3) In the case of a sale effected through a Securities
System, in accordance with the provisions of
Section 2 10 hereof;
4) To the depository agent in connection with tender
or other similar offers for securities of the
Portfolio;
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 Portfolio 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 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to
Article l; or for exchange for a different number
of bonds,
2
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 Portfolio, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery" custom; provided that in any
such case, the 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 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, rights or similar
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; 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 the Portfolio, but only against
receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund on
behalf of the Portfolio, 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 Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any
borrowings by the Fund on behalf of the Portfolio
requiring a pledge of assets by the Fund on behalf
of the Portfolio, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of
any agreement among the Fund on behalf of the
Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of
1934 (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
3
of any similar organization or organizations,
regarding escrow or other arrangements in
connection with transactions by the Portfolio of
the Fund;
13) For delivery in accordance with the provisions of
any agreement among the Fund on behalf of the
Portfolio, the Custodian, and a Futures Commission
Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in
connection with transactions by the Portfolio on
the Fund;
14) 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 currently
effective prospectus and statement of additional
information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only
upon receipt of, in addition to Proper Instructions
from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the
board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying
the securities of the Portfolio 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. Domestic securities held by the
Custodian (other than bearer securities) shall be registered
in the name of the Portfolio or in the name of any nominee
of the Fund on behalf of the Portfolio or on any Nominee of
the Custodian which nominee shall be assigned exclusively to
the Portfolio, unless the Fund has authorized in writing the
appointment of a nominee to be used in common with other
registered investment companies having the same investment
adviser as the Portfolio, or in the name or nominee name of
an agent appointed pursuant to Section 2.9 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 the Portfolio under the terms of this Contract
shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its
best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts
basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or
exchange offers.
4
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in
the name of each Portfolio of the 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 Portfolio,
other than cash maintained by the Portfolio in a bank
account established and used in accordance with Rule 17f-3
under the Investment Company Act of 1940. Funds held by the
Custodian for a Portfolio 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 Investment Company
Act of l940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company
shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Trustees of the Fund.
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 Availability of Federal Funds. Upon mutual agreement between
the Fund on behalf of each applicable Portfolio and the
Custodian, the Custodian shall, upon the receipt of Proper
Instructions from the Fund on behalf of a Portfolio, make
federal funds available to such Portfolio as of specified
times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for
Shares of such Portfolio which are deposited into the
Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all
income and other payments with respect to registered
domestic securities held hereunder to which each Portfolio
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 domestic
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
Portfolio'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 each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty
or responsibility in connection therewith, other than to
provide the Fund with such information 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
Portfolio is properly entitled.
5
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions
from the Fund on behalf of the applicable Portfolio, which
may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options,
futures contracts or options on futures contracts
for the account of the Portfolio but only (a)
against the delivery of such securities or evidence
of title to such options, futures contracts or
options on futures 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 Company 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 Portfolio 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 2.10 hereof; (c) in
the case of a purchase involving the Direct Paper
System, in accordance with the conditions set forth
in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf
of the Portfolio 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 or (ii) against delivery of
the receipt evidencing purchase by the Portfolio of
securities owned by the Custodian along with
written evidence of the agreement by the Custodian
to repurchase such securities from the Portfolio or
(e) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable
bank pursuant to Proper Instructions from the Fund
as defined in Article 5;
2) In connection with conversion, exchange or
surrender of securities owned by the Portfolio as
set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued
by the Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability
incurred by the Portfolio, including but not
limited to the following payments for the account
of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal 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 on Shares of the
Portfolio declared pursuant to the governing
documents of the Fund;
6
6) For payment of the amount of dividends received in
respect of securities sold short; and
7) For any other proper purpose, but only upon receipt
of, in addition to Proper Instructions from the
Fund on behalf of the Portfolio, a certified copy
of a resolution of the Board of Trustees or of the
Executive Committee of the Fund 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
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. Except as specifically stated otherwise in this
Contract, in any and every case where payment for purchase
of domestic securities for the account of a Portfolio is
made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio 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.
2.9 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 Investment Company Act of 1940, as amended, 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.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian
may deposit and/or maintain securities owned by a Portfolio
in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, which acts as a securities depository,
or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in
accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if
any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio
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;
2) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
a Securities System shall identify by book-entry
those securities belonging to the Portfolio;
7
3) The Custodian shall pay for securities purchased
for the account of the Portfolio 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 Portfolio. The Custodian
shall transfer securities sold for the account of
the Portfolio 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 the Portfolio. Copies of all advices
from the Securities System of transfers of
securities for the account of the Portfolio shall
identify the Portfolio, be maintained for the
Portfolio by the Custodian and be provided to the
Fund at its request. Upon request, the Custodian
shall furnish the Fund on behalf of the Portfolio
confirmation on each transfer to or from the
account of the Portfolio in the form of a written
advice or notice and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction
sheets selecting each day's transactions in the
Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund for the
Portfolio 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 from the Fund on
behalf of the Portfolio the initial or annual
certificate, as the case may be, required by
Article 14 hereof; and
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to
the Fund for the benefit of the Portfolio for any
loss or damage to the Portfolio 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 Fund, it shall be entitled to
be subrogated to the rights of the Custodian with
respect to any claim against 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 Portfolio has not been made
whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The
Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper system of the Custodian
subject to the following provisions:
8
1) No transaction relating to securities in the Direct
Paper System will be effected in the absence of
Proper Instructions from the Fund on behalf of the
Portfolio;
2) The Custodian may keep securities of the Portfolio
in the Direct Paper System only if such securities
are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the Portfolio which are maintained in
the Direct Paper System shall identify by
book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased
for the account of the Portfolio upon the making of
an entry on the records of the Custodian to reflect
such payment and transfer of securities to the
account of the Portfolio. The Custodian shall
transfer securities sold for the account of the
Portfolio upon the making of an entry on the
records of the Custodian to reflect such transfer
and receipt of payment for the account of the
Portfolio;
5) The Custodian shall furnish the Fund on behalf of
the Portfolio confirmation of each transfer to or
from the account of the Portfolio, in the form or a
written advice or notice, of Direct Paper on the
next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio
copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the
account of the Portfolio; and
6) The Custodian shall provide the Fund on behalf of
the Portfolio with any report on its system of
internal accounting control as the Fund may
reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of
Proper Instructions from the Fund on behalf of each
applicable Portfolio establish and maintain a segregated
account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof,
(i) in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, 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
9
Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased,
sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the
Portfolio, (iii) for the purpose of compliance by the
Portfolio with the procedures required by Investment Company
Act Release No 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but
only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of
the applicable Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee
signed by an officer of the Fund 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.
2.13 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 domestic
securities of each Portfolio held by it and in connection
with transfers of securities
2.14 Proxies. The Custodian shall, with respect to the domestic
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 the Portfolio
or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Portfolio such
proxies, all proxy soliciting materials and all notices
relating to such securities;
2.15 Communications Relating to Portfolio Securities. Subject to
the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund for each Portfolio all written
information (including, without limitation, pendency of
calls and maturities of domestic securities and expirations
of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the
Portfolio and the maturity of futures contracts purchased or
sold by the Portfolio) received by the Custodian from
issuers of the securities being held for the Portfolio. With
respect to tender or exchange offers, the Custodian shall
transmit promptly to the Portfolio 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
Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business
days prior to the date on which the Custodian is to take
such action.
10
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States
3A. Interim Provisions. The provisions of this Article 3A shall
apply to the duties of the Custodian as they relate to
foreign securities held outside of the United States until
the Custodian and the Fund acknowledge and agree in writing
that the foreign assets of the Fund have been effectively
transferred to foreign sub-custodians in the Custodian's
sub-custodian network. The Custodian and the Fund anticipate
that this transfer shall occur on or before August 30, 1995.
3A.1 Appointment of IFTC and Chase as Sub-Custodian. The
Custodian is authorized and instructed by the Fund to employ
Investors Fiduciary Trust Company ("IFTC") as sub-custodians
for the sole purpose of maintaining in place IFTC's
appointment, at the Fund's request, of Chase Manhattan Bank
N.A. ("Chase") as sub-custodian for the Fund's foreign
securities (including cash incidental to transactions in
such securities) on the terms and conditions set forth in
the Subcustody Contract between IFTC and Chase which is
attached hereto as Exhibit A (the "Subcustody Contract").
IFTC acknowledges that the Subcustody Contract shall remain
in effect with respect to the Fund for the interim period
contemplated above and hereby agrees to continue, for such
interim period, to provide such services to the Fund and in
accordance with such Subcustody Contract as necessary for
foreign custody services to be provided pursuant thereto.
3A.2 Standard of Care; Liability. Notwithstanding anything to the
contrary in this Contract, neither IFIC nor the Custodian
shall be liable to the Fund for any loss, damage, cost,
expense, liability or claim arising out of or in connection
with the maintenance or custody of the Fund's foreign
securities by Chase or by any other banking institution or
securities depository employed pursuant to the terms of the
Subcustody Contract, except that the Custodian shall be
liable for any such loss, damage, expense, liability or
claim directly resulting from the failure of the Custodian
to exercise reasonable care in the performance of its duties
hereunder. At the election of the Fund, the Fund shall be
entitled to be subrogated to the rights of IFTC under the
Subcustody Contract with respect to any claim arising
hereunder against Chase or any other banking institution or
securities depository employed by Chase if and to the extent
that the Fund has not been made whole therefor.
3A.3 Trust's Responsibility for Rules and Regulations. As between
IFTC, the Custodian and the Fund, the Fund shall be solely
responsible to assure that the maintenance of foreign
securities and cash pursuant to the terms of the Subcustody
Contract comply with all applicable rules, regulations,
interpretations and orders of the Securities and Exchange
Commission, and neither IFTC nor the Custodian assumes any
responsibility or makes any representations as to such
compliance.
11
3B. Post-Conversion Provisions. The provisions of this Article
3B shall apply to the duties of the Custodian as they relate
to foreign securities held outside of the United States
after the effective date of the transfer of the Fund's
foreign assets from the Chase sub-custodian network to the
Custodian's sub-custodian's network.
3B.1 Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instruct the Custodian to employ as
sub-custodians for the Portfolio's securities and other
assets maintained outside the United States the foreign
banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians").
Upon receipt of "Proper Instructions", as defined in Section
5 of this Contract, together with a certified resolution of
the Fund's Board of Trustees, the Custodian and the Fund may
agree to amend Schedule A hereto from time to time to
designate additional foreign banking institutions and
foreign securities depositories to act as sub-custodian.
Upon receipt of Proper Instructions, the Fund may instruct
the Custodian to cease the employment of any one or more
such sub-custodians for maintaining custody of the
Portfolio's assets.
3B.2 Assets to be Held. The Custodian shall limit the securities
and other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company
Act of 1940, and (b) cash and cash equivalents in such
amount as the Custodian or the Fund may determine to be
reasonably necessary to effect the Portfolio's foreign
securities transactions. The Custodian shall identify on its
books as belonging to the Fund, the foreign securities of
the Fund held by each foreign sub-custodian.
3B.3 Foreign Securities Systems. Except as may otherwise be
agreed upon in writing by the Custodian and the Fund, assets
of the Portfolios shall be maintained in a clearing agency
which acts as a securities depository or in a book-entry
system for the central handling of securities located
outside of the United States (each a "Foreign Securities
System") only through arrangements implemented by the
foreign banking institutions serving as sub-custodians
pursuant to the terms hereof (Foreign Securities Systems and
U.S. Securities Systems are collectively referred to herein
as the "Securities Systems"). Where possible, such
arrangements shall include entry into agreements containing
the provisions set forth in Section 3B.5 hereof.
3B.4 Holding Securities. The Custodian may hold securities and
other non-cash property for all of its customers, including
the Fund, with a Foreign Sub-Custodian in a single account
that is identified as belonging to the Custodian for the
benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and
other non-cash property of the Fund which are maintained in
such account shall identify by book-entry those securities
and other non-cash property belonging to the Fund and (ii)
the Custodian shall
12
require that securities and other non-cash property so held
by the Foreign Sub-Custodian be held separately from any
assets of the Foreign Sub-Custodian or of others.
3B.5 Agreements with Foreign Banking Institutions. Each agreement
with a foreign banking institution shall provide that: (a)
the assets of each Portfolio will not be subject to any
right, charge, security interest, lien or claim of any kind
in favor of the foreign banking institution or its creditors
or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets
of each Portfolio will be freely transferable without the
payment of money or value other than for custody or
administration; (c) adequate records will be maintained
identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent
permitted under applicable law the independent public
accountants for the Fund, will be given access to the books
and records of the foreign banking institution relating to
its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian
will be subject only to the instructions of the Custodian or
its agents.
3B.6 Access of Independent Accountants of the Fund. Upon request
of the Fund, the Custodian will use its best efforts to
arrange for the independent accountants of the Fund to be
afforded access to the books and records of any foreign
banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance
of such foreign banking institution under its agreement with
the Custodian.
3B.7 Reports by Custodian. The Custodian will supply to the Fund
from time to time, as mutually agreed upon, statements in
respect of the securities and other assets of the
Portfolio(s) held by foreign sub-custodians, including but
not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets
and advices or notifications of any transfers of securities
to or from each custodial account maintained by a foreign
banking institution for the Custodian on behalf of each
applicable Portfolio indicating, as to securities acquired
for a Portfolio, the identity of the entity having physical
possession of such securities.
3B.8 Transactions in Foreign Custody Account. (a) Except as
otherwise provided in paragraph (b) of this Section 3B.8,
the provision of Sections 2.2 and 2.7 of this Contract shall
apply, mutatis mutandis to the foreign securities of the
Fund held outside the United States by foreign
sub-custodians.
(b) Notwithstanding any provision of this Contract to
the contrary, settlement and payment for securities
received for the account of each applicable
Portfolio and delivery of securities maintained for
the account of each applicable Portfolio may be
effected in accordance with the customary
established securities trading or securities
processing practices and
13
procedures in the jurisdiction or market in which
the transaction occurs, including, without
limitation, delivering securities to the purchaser
thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with
the expectation of receiving later payment for such
securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such
entity's nominee to the same extent as set forth in
Section 2.3 of this Contract, and the Fund agrees
to hold any such nominee harmless from any
liability as a holder of record of such securities.
3B.9 Liability of Foreign Sub-Custodians. Each agreement pursuant
to which the Custodian employs a foreign banking institution
as a foreign sub-custodian shall require the institution to
exercise reasonable care in the performance of its duties
and to indemnify, and hold harmless, the Custodian and the
Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the
institution's performance of such obligations. At the
election of the Fund, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claims
against a foreign banking institution as a consequence of
any such loss, damage, cost, expense, liability or claim if
and to the extent that the Fund has not been made whole for
any such loss, damage, cost, expense, liability or claim.
3B.10 Liability of Custodian. The Custodian shall be liable for
the acts or omissions of a foreign banking institution to
the same extent as set forth with respect to sub-custodians
generally in this Contract and, regardless of whether assets
are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of
a U.S. bank as contemplated by paragraph 3B.13 hereof, the
Custodian 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 loss where the sub-custodian has otherwise
exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3B.10, in delegating custody
duties to State Street London Ltd., the Custodian shall not
be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from
(a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed
hostilities) or (b) other losses (excluding a bankruptcy or
insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or
other losses under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.
3B.11 Reimbursement for Advances. If the Fund requires the
Custodian to advance cash or securities for any purpose for
the benefit of a Portfolio including the purchase
14
or sale of foreign exchange or of contracts for foreign
exchange, 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, any property at any time held
for the account of the applicable Portfolio shall be
security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to
utilize available cash and to dispose of such Portfolio's
assets to the extent necessary to obtain reimbursement.
3B.12 Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June, information
concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and
scope to that furnished to the Fund in connection with the
initial approval of this Contract. In addition, the
Custodian will promptly inform the Fund in the event that
the Custodian learns of a material adverse change in the
financial condition of a foreign sub-custodian or any
material loss of the assets of the Fund or in the case of
any foreign sub-custodian not the subject of an exemptive
order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to
be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in
accordance with generally accepted U.S. accounting
principles).
3B.13 Branches of U.S. Banks.
(a) Except as otherwise set forth in this Contract, the
provisions hereof shall not apply where the custody
of the Portfolios assets are maintained in a
foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said
Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of
this Contract.
(b) Cash held for each Portfolio of the Fund in the
United Kingdom shall be maintained in an interest
bearing account established for the Fund with the
Custodian's London branch, which account shall be
subject to the direction of the Custodian, State
Street London Ltd. or both.
3B.14 Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on
the Fund or the Custodian as custodian of the Fund by the
tax law for the United States of America or any state or
political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the
obligations imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of jurisdictions other
than those mentioned in
15
the above sentence, including responsibility for withholding
and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole
responsibility of the Custodian 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 jurisdictions for which the Fund has provided such
information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or
from the Transfer Agent of the Fund and deposit into the account of the
appropriate Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The Custodian will
provide timely notification to the Fund on behalf of each such Portfolio and
the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose but subject to
the limitations of the Declaration of Trust and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a
request for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of a Portfolio, 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. 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, when
presented to the Custodian in accordance with such procedures and controls as
are mutually agreed upon from time to time between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Trustees
shall 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. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the Board of
Trustees of the Fund accompanied by a detailed description of procedures
approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied
that such procedures afford adequate safeguards for the Portfolios' assets.
For purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which requires
a segregated asset account in accordance with Section 2.12.
16
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from
the Fund on behalf of each applicable Portfolio:
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 on behalf of the Portfolio;
2) surrender securities in temporary form for securities
in definitive form;
3) endorse for collection, in the name of the Portfolio,
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 Portfolio except as
otherwise directed by the Board of Trustees of the
Fund.
7. 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 the
Fund. The Custodian may receive and accept a certified copy of a vote of the
Board of Trustees of the Fund as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any determination or
of any action by the Board of Trustees pursuant to the Declaration of Trust as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and
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 Trustees of the Fund to
keep the books of account of each Portfolio and/or compute the net asset value
per share of the outstanding shares of each Portfolio or, if directed in
writing to do so by the Fund on behalf of the Portfolio, shall itself keep
such books of account and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net income of the
Portfolio as described in the Fund's currently effective prospectus related to
such Portfolio and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an officer
of the Fund 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 share and the daily
17
income of each Portfolio shall be made at the time or times described from
time to time in the Fund's currently effective prospectus related to such
Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and
maintain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31
thereof and Rules 31a-1 and 31a-2 thereunder. 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 Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall
be agreed upon between the Fund and the Custodian, include certificate numbers
in such tabulations.
10. Opinion of Fund's Independent Accountants
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from
year to year favorable opinions from the Fund's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Fund'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.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonable require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, 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 Fund to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.
18
13. 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,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. 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 Fund
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 Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence or willful
misconduct, the Custodian shall be without liability to the Fund for any loss,
liability, claim or expense resulting from or caused by: (i) events or
circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, nationalization or expropriation,
imposition of currency controls or restrictions, the interruption, suspension
or restriction of trading on or the closure of any securities market, power or
other mechanical or technological failures or interruptions, computer viruses
or communications disruptions, acts of war or terrorism, riots, revolutions,
work stoppages, natural disasters or other similar events or acts; (ii) errors
by the Fund or the Investment Advisor in their instructions to the Custodian;
(iii) the insolvency of or acts or omissions by a Securities System; (iv) any
delay or failure of any broker, agent or intermediary, central bank or other
commercially prevalent payment or clearing system to deliver to the
Custodian's sub-custodian or agent securities purchased or in the remittance
or payment made in connection with securities sold; (v) any delay or failure
of any company, corporation, or other body in charge or registering or
transferring securities in the name of the Custodian, the Fund, the
Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System;
and (vii) any provision of any present or future law or regulation or order of
the United States of America, or any state thereof, or any other country, or
political subdivision thereof or of any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.
If the Fund on behalf of a Portfolio requires the Custodian to take
any action with respect to securities, 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 or the Portfolio being liable
for the payment of money or incurring liability of some other form, the Fund
on behalf of
19
the Portfolio, 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 Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) for the benefit of a Portfolio including the purchase or sale of
foreign exchange or of contracts for foreign exchange 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, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available cash
and to dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
14. 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 parties hereto 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 with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System by such Portfolio,
as required by Rule 17f-4 under the Investment Company Act of 1940, as amended
and that the Custodian shall not with respect to a Portfolio act under Section
2.11 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees has approved
the initial use of the Direct Paper System by such Portfolio; provided
further, however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Fund on behalf of
one or more of the Portfolios may at any time by action of its Board of
Trustees (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, the Fund on behalf of each
applicable Portfolio 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.
20
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the
Portfolios shall be appointed by the Board of Trustees of the Fund, 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 of each applicable Portfolio then held by it hereunder and shall
transfer to an account of the successor all of the securities of each such
Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Trustees of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian
or certified copy of a vote of the Board of Trustees 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 Investment Company Act of
1940, 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 on behalf of each applicable Portfolio
and all instruments held by the Custodian relative thereto and all other
property held by it under this Contract on behalf of each applicable Portfolio
and to transfer to an account of such successor custodian all of the
securities of each such Portfolio held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the Custodian under this
Contract.
In the event that securities, funds and other properties remain in
the possession of the Custodian after the date of termination hereof owing to
failure of the fund to procure the certified copy of the vote referred to or
of the Board of Trustees 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.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, 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 provisions of the Declaration of Trust of
the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
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17. Additional Funds
In the event that the Fund establishes one or more series of Shares
in addition to Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Emerging Markets Equity Fund
and Xxxxxxxx Xxxxxxxx/Xxxxxx, Xxxxxxx Municipal Bond Fund with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
18. 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.
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
20. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which
hold securities for the account of customers to respond to requests by issuers
of securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If the Fund tells the
Custodian "no", the Custodian will not provide this information to requesting
companies. If the Fund tells the Custodian "yes" or does not check either
"yes" or "no" below, the Custodian is required by the rule to treat the Fund
as consenting to disclosure of this information for all securities owned by
the Fund or any funds or accounts established by the Fund. For the Fund's
protection, the Rule prohibits the requesting company from using the Fund's
name and address for any purpose other than corporate communications. Please
indicate below whether the Fund consents or objects by checking one of the
alternatives below.
YES [ ] The Custodian is authorized to release
the Fund's name, address, and shares
positions.
NO [ ] The Custodian is not authorized to
release the Fund's name, address, and
share positions.
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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 ______ day of _____________,
199___.
ATTEST XXXXXXXX XXXXXXXX/XXXXXX,
PEABODY INVESTMENT TRUST II
_________________________________ By _____________________________
ATTEST STATE STREET BANK AND TRUST
COMPANY
_________________________________ By _____________________________
Executive Vice President
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