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EXHIBIT 8
CUSTODIAN CONTRACT
This Contract between The Select Sector SPDR Trust, a business trust
organized and existing under the laws of the Commonwealth of Massachusetts,
having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, hereinafter called the "Trust", 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 Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Trust intends to initially offer shares (the "Shares") in
nine (9) series, The Basic Industries Select Sector SPDR Fund, The Consumer
Services Select Sector SPDR Fund, The Consumer Staples Select Sector SPDR Fund,
The Cyclical/Transportation Select Sector SPDR Fund, The Energy Select Sector
SPDR Fund, The Financial Select Sector SPDR Fund, The Industrial Select Sector
SPDR Fund, The Technology Select Sector SPDR Fund, and The Utilities Select
Sector SPDR Fund (such series together with all other series subsequently
established by the Trust and made subject to this Contract in accordance with
paragraph 17, being herein referred to as the "Fund(s)");
WHEREAS, the Trust will issue and redeem shares of each Fund only in
aggregations of shares known as "Creation Units" (currently 50,000 shares in the
case of each Fund) principally in kind for portfolio securities of the
respective Fund, as more fully described in the prospectus and statement of
additional information of the Trust (together, the "Prospectus") included in its
registration statement on Form N-1A (the "Registration Statement") (Reg. Nos.
333-57791; 811-08837);
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 Trust hereby employs the Custodian as the custodian of the assets
of the Funds of the Trust pursuant to the provisions of the Declaration of
Trust. The Trust on behalf of the Fund(s) agrees to deliver to the Custodian all
securities and cash of the Funds, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund(s) from time to time, and the consideration received by it for
such new or treasury Shares as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
4), the Custodian shall on
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behalf of the applicable Fund(s) from time to time employ one or more
sub-custodians, but only in accordance with an applicable vote by the Board of
Trustees of the Trust on behalf of the applicable Fund(s), and provided that the
Custodian shall have no more or less responsibility or liability to the Trust 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 Trust Held By
the Custodian
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 such Fund, other than (a) securities which are
maintained pursuant to Section 2.10 in a clearing agency registered
with the United States Securities and Exchange Commission (the "SEC")
under Section 17A of the Exchange Act, 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 (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 (the "Direct Paper System") of the Custodian pursuant to
Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by a Fund 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 Trust on behalf of the applicable Fund,
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 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 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Fund;
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 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Article 1; or
for exchange for a different number of
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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 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 Fund, but only against receipt of adequate collateral
as agreed upon from time to time by the Custodian and the
Trust on behalf of the Fund, 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 Trust on behalf of the Fund requiring a pledge of assets
by the Trust on behalf of the Fund, but only against receipt
of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Trust on behalf of the Fund, 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 of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the Fund
of the Trust;
13) For delivery in accordance with the provisions of any
agreement among the Trust on
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behalf of the Fund, 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 ("CFTC") and/or any contract market,
or any similar organization or organizations, regarding
account deposits in connection with transactions by the Fund
of the Trust;
14) Upon receipt of instructions from the transfer agent for the
Trust (the "Transfer Agent") 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 Prospectus, in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper trust purpose, but only upon receipt of
Proper Instructions from the Trust on behalf of the applicable
Fund specifying the securities of the Fund to be delivered,
setting forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper trust 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 (other
than bearer securities) shall be registered in the name of the Fund or
in the name of any nominee of the Trust on behalf of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively to
the Fund, unless the Trust 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 Fund, or in the
name or nominee name of any 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
Fund under the terms of this Contract shall be in "street name" or
other good delivery form. If, however, the Trust directs the Custodian
to maintain securities in "street name", the Custodian shall utilize
its best efforts only to timely collect income due the Trust on such
securities and to notify the Trust on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund of the Trust, 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 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 Fund be
approved by vote of a majority of the Board of Trustees of the Trust.
Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the
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Custodian only in that capacity.
2.5 Determination of Fund Deposit, etc. Subject to and in accordance with
the directions of the investment adviser for the Funds, the Custodian
shall determine for each Fund after the end of each trading day on the
New York Stock Exchange, in accordance with the respective Fund's
policies as adopted from time to time by the Board of Trustees and in
accordance with the procedures set forth in the Prospectus, (i) the
identity and weighting of the securities in the Deposit Securities and
the Fund Securities, (ii) the Cash Component (including the Dividend
Equivalent Amount), and (iii) the amount of cash redemption proceeds
(all as defined in the Registration Statement) required for the
issuance or redemption, as the case may be, of Shares in Creation Unit
aggregations of such Fund on such date. The Custodian shall provide or
cause to be provided this information to the Funds' distributor and
other persons according to the policy established by the Trust's Board
of Trustees and shall disseminate such information on each day that the
American Stock Exchange is open, including through the facilities of
the National Securities Clearing Corporation, prior to the opening of
trading on the American Stock Exchange.
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 securities held hereunder to which each 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 each Fund on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Trust. The
Custodian will have no duty or responsibility in connection therewith,
other than to provide the Trust with such information or data as may be
necessary to assist the Trust in arranging for the timely delivery to
the Custodian of the income to which the Fund is properly entitled.
2.7 Payment of Trust Monies. Upon receipt of Proper Instructions from the
Trust on behalf of the applicable Fund, 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 domestic securities, options, futures
contracts or options on futures contracts for the account of
the Fund 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 1940 Act, 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
U.S. Securities System, in accordance with the conditions set
forth in Section 2.10 hereof; (c)
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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 Trust on behalf of the 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 or (ii) 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 or (e) for transfer to a time deposit
account of the Trust 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 Trust as defined herein;
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 Creation Unit aggregations
of Shares issued as set forth in Article 4 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 fees, and operating
expenses of the Trust 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 declared pursuant
to the governing documents of the Trust;
6) For repayment of loans made to a Fund or upon redelivery of
collateral for loans of securities made by a Fund or for
payment in connection with a foreign exchange transaction;
7) For any other proper Trust purpose, but only upon receipt of
Proper Instructions from the Trust on behalf of the Fund
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 Trust purpose, and naming the person or
persons to whom such payment is to be made.
2.8 [Reserved].
2.9 Appointment of Agents. The Custodian may at any time or times, in
compliance with the 1940 Act, 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.
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2.10 Deposit of Trust Assets in U.S. Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Fund in a U.S. Securities
System in accordance with applicable Federal Reserve Board and SEC
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System (the "U.S. Securities System Account") which
account 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
Fund which are maintained in a U.S. 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 the Fund upon (i) receipt of advice from the U.S.
Securities System that such securities have been transferred
to the U.S. Securities System 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
the Fund upon (i) receipt of advice from the U.S. Securities
System that payment for such securities has been transferred
to the U.S. Securities System 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 Fund. Copies of
all advices from the U.S. Securities System of transfers of
securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be
provided to the Trust at its request. Upon request, the
Custodian shall furnish the Trust on behalf of the Fund
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 Trust on behalf of the Fund copies of daily
transaction sheets reflecting each day's transactions in the
U.S. Securities System for the account of the Fund;
4) The Custodian shall provide the Trust with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
5) The Custodian shall have received from the Trust on behalf of
the Fund the initial or annual certificate, as the case may
be, required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for the benefit of the
Fund for any loss or damage to the Fund resulting from use of
the U.S. 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 U.S. Securities System; at
the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any
claim against the U.S.
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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.
2.11 Trust Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by a Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Trust on behalf of the Fund;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in the
Direct Paper System Account which account 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
Fund which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the
account of the Fund 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 Fund. The Custodian shall
transfer securities sold for the account of the Fund 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
Fund;
5) The Custodian shall furnish the Trust on behalf of the Fund
confirmation of each transfer to or from the account of the
Fund, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and
shall furnish to the Trust on behalf of the Fund copies of
daily transaction sheets reflecting each day's transaction in
the Direct Paper System for the account of the Fund;
6) The Custodian shall provide the Trust on behalf of the Fund
with any report on its system of internal accounting control
as the Trust may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Trust on behalf of each applicable Fund establish
and maintain a segregated account or accounts for and on behalf of each
such 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 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Trust 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 CFTC or any registered contract market), or
of any similar
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organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Fund, (ii) for purposes of
segregating cash or 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 Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release of the SEC, or
interpretative opinion of the staff of the SEC relating to the
maintenance of segregated accounts by registered investment companies,
(iv) for purposes of segregating cash deposits, representing 115% of
missing Deposit Securities, made pending delivery of such missing
Deposit Securities and utilized by the Trust to cover costs of
acquiring such missing Deposit Securities as provided for in the
Prospectus, and (v) for other proper trust purposes, but only, in the
case of clause (v), upon receipt of Proper Instructions from the Trust
on behalf of the applicable Fund setting forth the purpose or purposes
of such segregated account and declaring such purpose to be a proper
trust purpose.
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 securities of each Fund held by it and in
connection with transfers of securities.
2.14 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 the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 Communications Relating to Fund Securities. Subject to the provisions
of Section 2.3, the Custodian shall transmit promptly to the Trust for
each Fund 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 Trust on behalf of any Fund and the maturity of
futures contracts purchased or sold by a Fund) received by the
Custodian from issuers of the securities being held for such Fund. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to a Fund all written information received by the Custodian
from issuers of the securities held by such Fund whose tender or
exchange is sought and from the party (or his agents) making the tender
or exchange offer. If the Trust desires to take action with respect to
any tender offer, exchange offer or any other similar transaction, the
Trust shall notify the Custodian at least three business days prior to
the date on which the Custodian is to take such action.
3. Payments for Repurchases or Redemptions and Sales of Shares of the
Trust
From such funds and securities 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 Trust pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds and securities
available for payment to, or in accordance with the instructions of, Authorized
Participants (as
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defined in the Prospectus) who have delivered to the Transfer Agent a Proper
Instructions for the redemption or repurchase of their Shares, in Creation Unit
aggregations, which shall have been accepted by the Transfer Agent, the
applicable Fund Securities (as defined in the Prospectus) (or such securities in
lieu thereof as may be designated by the investment adviser of the Trust in
accordance with the Prospectus) for such Fund and the cash redemption payment,
if applicable, less any applicable cash redemption transaction fee. The
Custodian will transfer the applicable Trust Securities to or on the order of
the Authorized Participant through the Clearing Process (as defined in the
Prospectus) or, at the election of the Authorized Participant, outside the
Clearing Process through the DTC system (as defined in the Prospectus). Any cash
redemption payment (less any applicable cash redemption transaction fees) due to
the Authorized Participant on redemption shall be effected through the Clearing
Process or through wire transfer in the case of redemptions effected outside of
the Clearing Process through the DTC system.
4. 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 Trust shall cause all oral instructions to be
confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Trust and the Custodian agree to security procedures, including but not limited
to, the security procedures selected by the Trust in the Funds Transfer Addendum
attached hereto. 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.
5. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Trust on behalf of each applicable Fund:
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 Trust on behalf of 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
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Fund except as otherwise directed by the Board of Trustees of
the Trust.
6. 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
Trust. The Custodian may receive and accept a certified copy of a vote of the
Board of Trustees of the Trust 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.
7. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value, Net Income and Other Information
The Custodian shall keep the books of account of each Fund and compute
the net asset value per Share of the outstanding Shares. The Custodian shall
transmit the net asset value per share of each Fund to the Transfer Agent, the
Distributor, the American Stock Exchange (the "AMEX") and to such other entities
as directed in writing by the Trust. If directed in writing by the Trust to do
so, the Custodian shall also calculate daily the net income of the Fund as
described in the Prospectus and shall advise the Trust, the Distributor and the
Transfer Agent daily of the total amounts of such net income and, if instructed
in writing by an officer of the Trust 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 income of each
Fund shall be made at the time or times described from time to time in the
Prospectus. The Custodian shall on each day a Fund is open for the purchase or
redemption of Shares of such Fund compute the number of Shares of each Deposit
Security (as defined in the Prospectus) to be included in the current Trust
Deposit, the Dividend Equivalent Payment (as defined in the Prospectus) and the
Fund Securities (as defined in the Prospectus) and shall transmit such
information to the AMEX.
8. Records
The Custodian shall with respect to each Fund create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Trust under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Trust 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 Trust and employees and
agents of the SEC. The Custodian shall, at the Trust's request, supply the Trust
with a tabulation of securities owned by each Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such compensation as shall
be agreed upon between the Trust and the Custodian, include certificate numbers
in such tabulations.
9. Opinion of Trust's Independent Accountant
The Custodian shall take all reasonable action, as the Trust on behalf
of each applicable Fund may
11
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from time to time request, to obtain from year to year favorable opinions from
the Trust's independent accountants with respect to its activities hereunder in
connection with the preparation of the Trust's Form N-1A, and Form N-SAR or
other annual reports to the SEC and with respect to any other requirements
thereof.
10. Report to Trust by Independent Public Accountants
The Custodian shall provide the Trust, on behalf of each of the Funds
at such times as the Trust may reasonably 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 U.S. 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 Trust 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.
11. Compensation of Custodian
The Custodian shall receive from the Trust such compensation for the
Custodian's services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties and
described in the then current Prospectus, and initially set forth as a "Unitary
Fee" in the Custody, Accounting, Transfer Agent, Stock Transfer, Fund
Administration and Advisory Fee Schedule to this Agreement.
12. 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
two-party or 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
Trust 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 Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
If the Trust on behalf of a Fund 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 Trust or the Fund being liable for the payment of
money or incurring liability of some other form, the Trust on behalf of the
Fund, 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.
12
13
If the Trust 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) 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 Fund shall be
security therefor and should the Trust fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of such
Fund's assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
13. 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) after the date of such delivery or mailing; provided, however
that the Custodian shall not with respect to a Fund 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 has approved the initial use of a
particular Securities System by such Fund, as required by Rule 17f-4 under the
1940 Act and that the Custodian shall not with respect to a Fund 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 has approved the initial use
of the Direct Paper System by such Fund; provided further, however, that the
Trust 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 Trust on behalf of one or more of the
Trust's may at any time by action of its Board (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 Agreement 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 Trust on behalf of each applicable
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
reasonable costs, expenses and disbursements.
14. Successor Custodian
If a successor custodian for one or more Funds shall be appointed by
the Board, 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 Fund then held by it hereunder and
shall transfer to an account of the successor custodian all of the securities of
each such Fund held in a Securities System.
13
14
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a Certified Resolution, deliver at the office of
the Custodian and transfer such securities, funds and other properties in
accordance with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution 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, or New York, New York, 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 Fund and all instruments held by the Custodian relative thereto and
all other property held by it under this Contract on behalf of each applicable
Fund and to transfer to an account of such successor custodian all of the
securities of each such Fund 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 Trust to procure the Certified Resolution 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.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Trust on behalf of each of the Funds, 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 Declaration of Trust of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
16. Additional Trusts
In the event that the Trust establishes one or more series of Shares in
addition to The Basic Industries Select Sector SPDR Fund, The Consumer Services
Select Sector SPDR Fund, The Consumer Staples Select Sector SPDR Fund, The
Cyclical/Transportation Select Sector SPDR Fund, The Energy Select Sector SPDR
Fund, The Financial Select Sector SPDR Fund, The Industrial Select Sector SPDR
Fund, The Technology Select Sector SPDR Fund, and The Utilities Select Sector
SPDR 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 Fund hereunder.
14
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17. 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.
18. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Trust on behalf of each of the Funds and the
Custodian relating to the custody of the Trust's assets.
18A. Notices
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set forth
herein during normal business hours or delivered prepaid registered mail or by
telex, cable or telecopy to the parties at the following addresses or such other
addresses as may be notified by any party from time to time.
To the Trust: The Select Sector SPDR Trust
c/o State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Telephone:
Telecopy:
To the Custodian: State Street Bank and Trust Company
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention:
Telephone:
Telecopy:
Such notice, instruction or other instrument shall be deemed to have been
served in the case of a registered letter at the expiration of five business
days after posting, in the case of cable twenty-four hours after dispatch and,
in the case of telex, immediately on dispatch and if delivered outside normal
business hours commence and in the case of cable, telex or telecopy on the
business day after the receipt thereof. Evidence that the notice was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.
15
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19. Reproduction of Documents
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
19A. Data Access Services Addendum
The Custodian and the Trust agree to be bound by the terms of the Data
Access Services Addendum attached hereto.
20. Shareholder Communications Election
SEC 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
Trust to indicate whether it authorizes the Custodian to provide the Trust's
name, address, and share position to requesting companies whose securities the
Trust owns. If the Trust tells the Custodian "no", the Custodian will not
provide this information to requesting companies. If the Trust tells the
Custodian "yes" or does not check either "yes" or "no" below, the Custodian is
required by the rule to treat the Trust as consenting to disclosure of this
information for all securities owned by the Trust or any funds or accounts
established by the Trust. For the Trust's protection, the Rule prohibits he
requesting company from using the Trust's name and address for any purpose other
than corporate communications. Please indicate below whether the Trust consents
or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Trust's
name, address, and share positions.
NO [ ] The Custodian is not authorized to release the Trust's
name, address, and share positions.
21. Limitation of Liability
The Declaration of Trust dated June 10, 1998, establishing the Trust,
which is hereby referred to and a copy of which is on file with the Secretary
of The Commonwealth of Massachusetts, provides that the name The select Sector
SPDR(R) Trust means the Trustees from time to time serving (as Trustees but not
personally) under such Declaration of Trust. It is expressly acknowledged and
agreed that the obligations of the Trust hereunder shall not be binding upon
any of the shareholders, Trustees, officers, employees or agents of the Trust,
personally, but shall bind only the trust property of the Trust, as provided in
its Declaration of Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of the Trust and signed by an officer of the
Trust, acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Trust as provided in its Declaration
of Trust.
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17
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 , 1998.
ATTEST
THE SELECT SECTOR SPDR TRUST
----------------------------
By
-------------------------
ATTEST
STATE STREET BANK AND TRUST COMPANY
----------------------------
By
-------------------------
Executive Vice President
18
FUNDS TRANSFER ADDENDUM
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's (as named below) account(s) upon the receipt of a payment order in
compliance with the selected Security Procedure chosen for funds transfer and in
the amount of money that State Street has been instructed to transfer. State
Street shall execute payment orders in compliance with the Security Procedure
and with the Client's instructions on the execution date provided that such
payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. All payment orders and
communications received after this time will be deemed to have been received on
the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client shall restrict access to
confidential information relating to the Security Procedure to authorized
persons as communicated in writing to State Street. The Client must notify State
Street immediately if it has reason to believe unauthorized persons may have
obtained access to such information or of any change in the Client's authorized
personnel. State Street shall verify the authenticity of all instructions
according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
4. REJECTION: State Street reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of State Street's receipt of such payment
order; (b) if initiating such payment order would cause State Street, in State
Street's sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers which are applicable to State
Street; or (c) if State Street, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When a
Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House
19
FUNDS TRANSFER ADDENDUM
Association, State Street will act as an Originating Depository Financial
Institution and/or Receiving Depository Institution, as the case may be, with
respect to such entries. Credits given by State Street with respect to an ACH
credit entry are provisional until State Street receives final settlement for
such entry from the Federal Reserve Bank. If State Street does not receive such
final settlement, the Client agrees that State Street shall receive a refund of
the amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of payment
orders shall ordinarily be provided within 24 hours notice which may be
delivered through State Street's proprietary information systems, such as, but
not limited to Horizon and GlobalQuest(R), or by facsimile or callback. The
Client must report any objections to the execution of a payment order within 30
days.
20
FUNDS TRANSFER ADDENDUM
Security Procedure(s) Selection Form
Please select one or more of the funds transfer security procedures indicated
below.
/ /SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions. Selection of this
security procedure would be most appropriate for existing SWIFT members.
/ /STANDING INSTRUCTIONS
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
/ /REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers. Clients selecting this option should have an existing
facility for completing CPU-CPU transmissions. This delivery mechanism is
typically used for high-volume business.
/ /GLOBAL HORIZON INTERCHANGE(SM) FUNDS TRANSFER SERVICE
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street. This delivery mechanism is most appropriate for
Clients with a low-to-medium number of transactions (5-75 per day), allowing
Clients to enter, batch, and review wire transfer instructions on their PC prior
to release to State Street.
/ /TELEPHONE CONFIRMATION (CALLBACK)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.
/ /REPETITIVE WIRES
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If
21
FUNDS TRANSFER ADDENDUM
the payment order exceeds the established limit, the instruction will be
confirmed by telephone prior to execution. Telephone confirmation is used to
establish this process. Repetitive wire instructions must be reconfirmed
annually.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts.
/ /TRANSFERS INITIATED BY FACSIMILE
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.
We provide this option for Clients who wish to batch wire instructions and
transmit these as a group to State Street Mutual Fund Services once or several
times a day.
/ /AUTOMATED CLEARING HOUSE (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. Clients using ACH must select one or more
of the following delivery options:
22
FUNDS TRANSFER ADDENDUM
/ /GLOBAL HORIZON INTERCHANGE AUTOMATED CLEARING HOUSE SERVICE
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.
/ /Transmission from Client PC to State Street Mainframe with Telephone Callback
/ /Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
/ /Transmission from DST Systems to State Street Mainframe with Encryption
/ /Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective _____________________ for
payment orders initiated by our organization.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
------------------------------------------- ----------------------------
Name Name
------------------------------------------- ----------------------------
Address Address
------------------------------------------- ----------------------------
City/State/Zip Code City/State/Zip Code
------------------------------------------- ----------------------------
Telephone Number Telephone Number
------------------------------------------- ----------------------------
Facsimile Number Facsimile Number
-------------------------------------------
SWIFT Number
-------------------------------------------
Telex Number
23
INSTRUCTION(S)
TELEPHONE CONFIRMATION
CLIENT The Select SPDR Trust
-------------------------------------------------------------------------
INVESTMENT MANAGER State Street Bank and Trust Company
-------------------------------------------------------------
AUTHORIZED INITIATORS
Please Type or Print
Please provide a listing of your staff members who are currently authorized to
INITIATE wire transfer instructions to State Street:
NAME TITLE (Specify whether position SPECIMEN SIGNATURE
is with Client or Investment
Manager)
------------------------- ------------------------- ---------------
------------------------- ------------------------- ---------------
------------------------- ------------------------- ---------------
------------------------- ------------------------- ---------------
------------------------- ------------------------- ---------------
------------------------- ------------------------- ---------------
AUTHORIZED VERIFIERS
Please Type or Print
Please provide a listing of your staff members who will be CALLED BACK to verify
the initiation of repetitive wires of $10 million or more and all non repetitive
wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
24
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
AGREEMENT between The Select Sector SPDR Trust (the "Customer") and
State Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of the Customer pursuant to a certain Custodian Agreement (the "Custodian
Agreement") dated as of ________________, 1998;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency
HORIZON(SM) Accounting System, in its role as custodian of the Customer, and
maintains certain Customer-related data ("Customer Data") in databases under the
control and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data
Access Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
(a) System. Subject to the terms and conditions of this Agreement,
State Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZON(SM) Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports and information, solely on computer hardware,
system software and telecommunication links as listed in Attachment B (the
"Designated Configuration") of the Customer, or certain third parties approved
by State Street that serve as independent auditors, investment advisors or
investment managers ("Investment Advisor"), or in other service capacities, of
the Customer or other third parties such as the Customer's independent auditors,
solely with respect to the Customer or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
(b) Data Access Services. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Agreement.
(c) Additional Services. State Street may from time to time agree to
make available to
25
the Customer additional Systems that are not described in the attachments to
this Agreement. In the absence of any other written agreement concerning such
additional systems, the term "System" shall include, and this Agreement shall
govern, the Customer's access to and use of any additional System made available
by State Street and/or accessed by the Customer.
2. NO USE OF THIRD PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the
Data Access Services provided under this Agreement, the Customer will have
access, through the Data Access Services, to Customer Data and to functions of
State Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment; Designated Location. The System and
the Data Access Services shall be used and accessed solely on and
through the Designated Configuration at the offices of the Customer or
the Investment Advisor located in Boston, Massachusetts ("Designated
Location").
b. Designated Configuration; Trained Personnel. State Street
shall be responsible for supplying, installing and maintaining the
Designated Configuration at the Designated Location. State Street and
the Customer agree that each will engage or retain the services of
trained personnel to enable both parties to perform their respective
obligations under this Agreement. State Street agrees to use
commercially reasonable efforts to maintain the System so that it
remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
c. Scope of Use. The Customer will use the System and the Data
Access Services only for the processing of securities transactions, the
keeping of books of account for the Customer and accessing data for
purposes of reporting and analysis. The Customer shall not, and shall
cause its employees and agents not to (i) permit any third party to use
the System or the Data Access Services, (ii) sell, rent, license or
otherwise use the System or the Data Access Services in the operation
of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data
Access Services for any fund, trust or other investment vehicle without
the prior written consent of State Street, (iv) allow access to the
System or the Data Access Services through terminals or any other
computer or telecommunications facilities located outside the
Designated Locations, (v) allow or cause any information (other than
Fund holdings, valuations of Fund holdings, and other information
reasonably necessary for the management or distribution of the assets
of the Customer) transmitted from State Street's databases, including
data from third party sources, available through use of the System or
the Data Access Services to be redistributed or retransmitted to
another computer, terminal or other device for other than use for or on
behalf of the Customer or (vi) modify the System in any way, including
without limitation, developing any software for or attaching any
devices or computer programs to any equipment, system, software or
database which forms a part of or is resident on the Designated
Configuration.
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d. Other Locations. Except in the event of an emergency or of
a planned System shutdown, the Customer's access to services performed
by the System or to Data Access Services at the Designated Location may
be transferred to a different location only upon the prior written
consent of State Street. In the event of an emergency or System
shutdown, the Customer may use any back-up site included in the
Designated Configuration or any other back-up site agreed to by State
Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data
Access Services through computer and telecommunications facilities or
devices complying with the Designated Configuration at additional
locations only upon the prior written consent of State Street and on
terms to be mutually agreed upon by the parties.
e. Title. Title and all ownership and proprietary rights to
the System, including any enhancements or modifications thereto,
whether or not made by State Street, are and shall remain with State
Street.
f. No Modification. Without the prior written consent of State
Street, the Customer shall not modify, enhance or otherwise create
derivative works based upon the System, nor shall the Customer reverse
engineer, decompile or otherwise attempt to secure the source code for
all or any part of the System.
g. Security Procedures. The Customer shall comply with data
access operating standards and procedures and with user identification
or other password control requirements and other security procedures as
may be issued from time to time by State Street for use of the System
on a remote basis and to access the Data Access Services. The Customer
shall have access only to the Customer Data and authorized transactions
agreed upon from time to time by State Street and, upon notice from
State Street, the Customer shall discontinue remote use of the System
and access to Data Access Services for any security reasons cited by
State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified
by the Customer) after such discontinuance, assume responsibility to
provide accounting services under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect
the use of the System and the Data Access Services by the Customer and
the Investment Advisor to ensure compliance with this Agreement. The
on-site inspections shall be upon prior written notice to the Customer
and the Investment Advisor and at reasonably convenient times and
frequencies so as not to result in an unreasonable disruption of the
Customer's or the Investment Advisor's business.
4. PROPRIETARY INFORMATION
a. Proprietary Information. The Customer acknowledges and
State Street represents that the System and the databases, computer
programs, screen formats, report formats, interactive design
techniques, documentation and other information made available to the
Customer by State Street as part of the Data Access Services and
through the use of
27
the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such
information provided by State Street to the Customer shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and
protect it in a manner consistent with its own procedures for the
protection of its own confidential information and to take appropriate
action by instruction or agreement with its employees who are permitted
access to the Proprietary Information to satisfy its obligations
hereunder. The Customer further acknowledges that State Street shall
not be required to provide the Investment Advisor with access to the
System unless it has first received from the Investment Advisor an
undertaking with respect to State Street's Proprietary Information in
the form of Attachment C to this Agreement. The Customer shall use all
commercially reasonable efforts to assist State Street in identifying
and preventing any unauthorized use, copying or disclosure of the
Proprietary Information or any portions thereof or any of the logic,
formats or designs contained therein.
b. Cooperation. Without limitation of the foregoing, the
Customer shall advise State Street immediately in the event the
Customer learns or has reason to believe that any person to whom the
Customer has given access to the Proprietary Information, or any
portion thereof, has violated or intends to violate the terms of this
Agreement, and the Customer will, at its expense, co-operate with State
Street in seeking injunctive or other equitable relief in the name of
the Customer or State Street against any such person.
c. Injunctive Relief. The Customer acknowledges that the
disclosure of any Proprietary Information, or of any information which
at law or equity ought to remain confidential, will immediately give
rise to continuing irreparable injury to State Street inadequately
compensable in damages at law. In addition, State Street shall be
entitled to obtain immediate injunctive relief against the breach or
threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive
the termination of this Agreement.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. The
Customer agrees that any liability of State Street to the Customer or
any third party arising out of State Street's provision of Data Access
Services or the System under this Agreement shall be limited to the
amount paid by the Customer for the preceding 24 months for such
services. In no event shall State Street be liable to the Customer or
any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Agreement may be brought by the
Customer more than two years after the Customer has knowledge that the
cause of action has arisen.
b. Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
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WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE
MADE BY STATE STREET.
c. Third-Party Data. Organizations from which State Street may
obtain certain data included in the System or the Data Access Services
are solely responsible for the contents of such data, and State Street
shall have no liability for claims arising out of the contents of such
third-party data, including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and the
Customer, the Customer shall be solely responsible for the accuracy of
any accounting statements or reports produced using the Data Access
Services and the System and the conformity thereof with any
requirements of law.
e. Force Majeure. Neither party shall be liable for any costs
or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including
without limitation, cessation of services hereunder or any damages
resulting therefrom to the other party, or the Customer as a result of
work stoppage, power or other mechanical failure, computer virus,
natural disaster, governmental action, or communication disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street
harmless from any loss, damage or expense including reasonable
attorney's fees, (a "loss") suffered by State Street arising from (i)
the negligence or willful misconduct in the use by the Customer of the
Data Access Services or the System, including any loss incurred by
State Street resulting from a security breach at the Designated
Location or committed by the Customer's employees or agents or the
Investment Advisor and (ii) any loss resulting from incorrect Client
Originated Electronic Financial Instructions. State Street shall be
entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without undertaking any further
inquiry as long as such instruction is undertaken in conformity with
security procedures established by State Street from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access
Services and related payment terms shall be as set forth in the Custody
Fee Schedule in effect from time to time between the parties (the "Fee
Schedule"). Any tariffs, duties or taxes imposed or levied by any
government or governmental agency by reason of the transactions
contemplated by this Agreement, including, without limitation, federal,
state and local taxes, use, value added and personal property taxes
(other than income, franchise or similar taxes which may be imposed or
assessed against State Street) shall be borne by the Customer. Any
claimed exemption from such tariffs, duties or taxes shall be supported
by proper documentary evidence delivered to State Street.
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8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a
designated State Street training facility or at the Designated
Location, to the Customer's personnel in connection with the use of the
System on the Designated Configuration. The Customer agrees that it
will set aside, during regular business hours or at other times agreed
upon by both parties, sufficient time to enable all operators of the
System and the Data Access Services, designated by the Customer, to
receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be
responsible for the technical installation and conversion
("Installation and Conversion") of the Designated Configuration. The
Customer shall have the following responsibilities in connection with
Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the
Data Access Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation
to enable both parties to perform their respective obligations
under this Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
a. Term of Agreement. This Agreement shall become effective on the date
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Either party may terminate this Agreement
(i) for any reason by giving the other party at least one-hundred and eighty
days' prior written notice in the case of notice of termination by State Street
to the Customer or thirty days' notice in the case of notice from the Customer
to State Street of termination; or (ii) immediately for failure of the other
party to comply with any material term and condition of the Agreement by giving
the other party written notice of termination. In the event the Customer shall
cease doing business, shall become subject to proceedings under the bankruptcy
laws (other than a petition for reorganization or similar proceeding) or shall
be adjudicated bankrupt, this Agreement and the rights granted hereunder shall,
at the option of State Street, immediately terminate with notice to the
Customer. This Agreement shall in any event terminate as to any Customer within
90 days after the termination of the Custodian Agreement applicable to such
Customer.
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c. Termination of the Right to Use. Upon termination of this
Agreement for any reason, any right to use the System and access to the
Data Access Services shall terminate and the Customer shall immediately
cease use of the System and the Data Access Services. Immediately upon
termination of this Agreement for any reason, the Customer shall return
to State Street all copies of documentation and other Proprietary
Information in its possession; provided, however, that in the event
that either party terminates this Agreement or the Custodian Agreement
for any reason other than the Customer's breach, State Street shall
provide the Data Access Services for a period of time and at a price to
be agreed upon by the parties.
11. MISCELLANEOUS
a. Assignment; Successors. This Agreement and the rights and
obligations of the Customer and State Street hereunder shall not be
assigned by either party without the prior written consent of the other
party, except that State Street may assign this Agreement to a
successor of all or a substantial portion of its business, or to a
party controlling, controlled by, or under common control with State
Street.
b. Survival. All provisions regarding indemnification,
warranty, liability and limits thereon, and confidentiality and/or
protection of proprietary rights and trade secrets shall survive the
termination of this Agreement.
c. Entire Agreement. This Agreement and the attachments hereto
constitute the entire understanding of the parties hereto with respect
to the Data Access Services and the use of the System and supersedes
any and all prior or contemporaneous representations or agreements,
whether oral or written, between the parties as such may relate to the
Data Access Services or the System, and cannot be modified or altered
except in a writing duly executed by the parties. This Agreement is not
intended to supersede or modify the duties and liabilities of the
parties hereto under the Custodian Agreement or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No
single waiver of any right hereunder shall be deemed to be a continuing
waiver.
d. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, unlawful, or unenforceable, the
validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired.
e. Governing Law. This Agreement shall be interpreted and
construed in accordance with the internal laws of The Commonwealth of
Massachusetts without regard to the conflict of laws provisions
thereof.
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ATTACHMENT A
Multicurrency HORIZON(SM) Accounting System
System Product Description
I. The Multicurrency HORIZON(SM) Accounting System is designed to provide lot
level Fund and general ledger accounting for SEC and ERISA type requirements and
includes the following services: 1) recording of general ledger entries; 2)
calculation of daily income and expense; 3) reconciliation of daily activity
with the trial balance, and 4) appropriate automated feeding mechanisms to (i)
domestic and international settlement systems, (ii) daily, weekly and monthly
evaluation services, (iii) Fund performance and analytic services, (iv)
customer's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest(R) is designed to provide customer access to the following
information maintained on The Multicurrency HORIZON(SM) Accounting System: 1)
cash transactions and balances; 2) purchases and sales; 3) income receivables;
4) tax reFund receivables; 5) daily priced positions; 6) open trades; 7)
settlement status; 8) foreign exchange transactions; 9) trade history, and 10)
daily, weekly and monthly evaluation services.
III. HORIZON(R) Gateway. HORIZON(R) Gateway provides customers with the ability
to (i) generate reports using information maintained on the Multicurrency
HORIZON(R) Accounting System which may be viewed or printed at the customer's
location; (ii) extract and download data from the Multicurrency HORIZON(R)
Accounting System; and (iii) access previous day and historical data. The
following information which may be accessed for these purposes: 1) holdings; 2)
holdings pricing; 3) transactions, 4) open trades; 5) income; 6) general ledger
and 7) cash.
IV. XxXxXx(SM). XxXxXx(SM) is designed to provide the customer with the ability
to prepare its own financial reports by permitting the customer to access
customer information maintained on the Multicurrency HORIZON(R) Accounting
System, to organize such information in a flexible reporting format and to have
such reports printed on the customer's desktop or by its printing provider.
V. State Street Interchange. State Street Interchange is an open information
delivery architecture wherein proprietary communication products, data formats
and workstation tools are replaced by industry standards and is designed to
enable the connection of State Street's network to customer networks, thereby
facilitating the sharing of information.
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ATTACHMENT B
DESIGNATED CONFIGURATION
ATTACHMENT B
ADVISOR/SUBADVISOR
STATE STREET [GRAPHIC]
BANK AND
TRUST
COMPANY
MULTICURRENCY HORIZON(R)
GLOBALQUEST(R),
HORIZON(R) GATEWAY, SOFTWARE IS INSTALLED FOR ACCESS.
INSIGHT(R) AND CLICK ON ICON FOR ACCESS.
XXXXXX(SM)
DIAL UP ACCESS
CONFIGURATION
33
ATTACHMENT C
UNDERTAKING
The Undersigned understands that in the course of its employment as
Investment Advisor to THE SELECT SECTOR SPDR TRUST (the "Customer") it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON(SM) Accounting System and other information systems (collectively, the
"System").
The Undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Customer and through the use of the System constitute copyrighted, trade secret,
or other proprietary information of substantial value to State Street. Any and
all such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
State Street Global Advisors, Inc.
By:
------------------------------------------
Title:
---------------------------------------
Date:
----------------------------------------
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ATTACHMENT D
SUPPORT
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's Multicurrency HORIZON(SM) Help Desk and Customer Assistance Center
between the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for
the purpose of obtaining answers to questions about the use of the System, or to
report apparent problems with the System. From time to time, the Customer shall
provide to State Street a list of persons, not to exceed five in number, who
shall be permitted to contact State Street for assistance (such persons being
referred to as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to
assist the Customer in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
support the Customer's use of the System: (i) for use on any computer equipment
or telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Agreement.
