CUSTODIAN CONTRACT
This Contract between Xxxxx Xxx Floating Rate Limited
Liability Company, a Delaware limited liability company having its
principal place of business at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 hereinafter called the "Fund", and State Street
Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, hereinafter called the "Custodian",
NOW THEREFORE, in consideration of the mutual covenants
and agreements hereinafter contained, the parties hereto
agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian
of the assets of the Fund, including securities which the
Fund desires to be held in places within the United
States ("domestic securities") and securities it desires to
be held outside the United States ("foreign securities")
pursuant to the provisions of the Declaration of Trust. The
Fund agrees to deliver to the Custodian all securities and
cash of the Fund, and all payments of income, payments of
principal or capital distributions received by it with
respect to all securities owned by the Fund from time to
time, and the cash consideration received by it for such new
or treasury shares of beneficial interest of the Fund
representing interests in the Fund, ("Shares") as may be
issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held or received by
the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the
meaning of Article 5), the Custodian shall on behalf of the
Fund from time to time employ one or more sub-custodians,
located in the United States but only in accordance with an
applicable vote by the Board of Trustees of the Fund, and
provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than
any such sub-custodian has to the Custodian. The Custodian
may employ as sub-custodian for the Fund's foreign
securities the foreign banking institutions and foreign
securities depositories designated in Schedule A hereto but
only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the
Fund Held By the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and
physically segregate for the account of the Fund
all non-cash property, to be held by it in the United
States including all domestic securities owned by
the Fund, other than (a) securities which are
maintained pursuant to Section 2.10 in a clearing
agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of
the Treasury (each, a U.S. Securities System") and (b)
commercial paper of an issuer for which State Street
Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained
in the Direct Paper System of the Custodian (the
"Direct Paper System") pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release
and deliver domestic securities owned by the Fund held
by the Custodian or in a U.S. Securities System account
of the Custodian or in the Custodian's Direct Paper
book entry system account ("Direct Paper System
Account") only upon receipt of Proper Instructions from
the Fund, 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 U.S.
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 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 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 Fund requiring a pledge of assets
by the Fund, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of
any agreement among the 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 Fund;
13) For delivery in accordance with the provisions of
any agreement among 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 and/or any Contract Market, or any
similar organization or organizations, regarding
account deposits in connection with transactions by
the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to
such Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be
described from time to time in the currently
effective prospectus and statement of additional
information of the Fund, related to the Fund
("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only
upon receipt of, in addition to Proper Instructions
from the Fund, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee
signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying
the securities of the Fund to be delivered, setting
forth the purpose for which such delivery is to be
made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons
to whom delivery of such securities shall be made.
2.3 Registration of Securities. Domestic securities held
by the Custodian (other than bearer securities) shall
be registered in the name of the Fund or in the name
of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively
to the Fund, unless the Fund has authorized in writing
the appointment of a nominee to be used in common with
other registered investment companies having the same
investment adviser as the 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 Fund
directs the Custodian to maintain securities in "street
name", the Custodian shall utilize its best efforts
only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts
basis only of relevant corporate actions including,
without limitation, pendency of calls, maturities,
tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States
in the name of the Fund, subject only to draft or order
by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by
it from or for the account of the 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. Funds held by the
Custodian for the 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 Investment Company Act of 1940 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
the Fund be approved by vote of a majority of the Board
of Trustees of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement
between the Fund and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the
Fund, make federal funds available to the Fund as of
specified times agreed upon from time to time by the
Fund and the Custodian in the amount of checks received
in payment for Shares of the Fund which are deposited
into the Fund's account.
2.6 Collection of Income. Subject to the provisions of
Section 2.3, the Custodian shall collect on a timely
basis all income and other payments with respect to
registered domestic securities held hereunder to which
the Fund shall be entitled either by law or
pursuant to custom in the securities business, and
shall collect on a timely basis all income and other
payments with respect to bearer domestic securities if,
on the date of payment by the issuer, such securities
are held by the Custodian or its agent thereof and
shall credit such income, as collected, to 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 the Fund on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be
the responsibility of the Fund. The Custodian will
have no duty or responsibility in connection therewith,
other than to provide the Fund with such information or
data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of
the income to which the Fund is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper
Instructions from the Fund, which may be continuing
instructions when deemed appropriate by the parties,
the Custodian shall pay out monies of the 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
Investment Company Act of 1940, as amended, to act
as a custodian and has been designated by the
Custodian as its agent for this purpose) registered
in the name of the 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) in the case of a purchase
involving the Direct Paper System, in accordance
with the conditions set forth in Section 2.11; (d)
in the case of repurchase agreements entered into
between the Fund 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 Fund in
any bank, whether domestic or foreign; such transfer
may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in
Article 5;
2) In connection with conversion, exchange or surrender
of securities owned by the Fund as set forth in
Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by
the Fund 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
Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the
Fund declared pursuant to the governing documents of
the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short;
7) For any other proper purpose, but only upon receipt
of, in addition to Proper Instructions from the
Fund, a certified copy of a resolution of the Board
of Trustees or of the Executive Committee of the
Fund signed by an officer of the Fund and certified
by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth
the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is
to be made.
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased. Except as specifically stated
otherwise in this Contract, in any and every case where
payment for purchase of domestic securities for the
account of the Fund is made by the Custodian in
advance of receipt of the securities purchased in the
absence of specific written instructions from the Fund
to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same
extent as if the securities had been received by the
Custodian.
2.9 Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any time
remove) any other bank or trust company which is itself
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian, as its agent to carry
out such of the provisions of this Article 2 as the
Custodian may from time to time direct; provided,
however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or
liabilities hereunder.
2.10 Deposit of Fund Assets in U.S. Securities Systems.
The Custodian may deposit and/or maintain securities
owned by the Fund in a clearing agency registered
with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934,
which acts as a securities depository, or in the book-
entry system authorized by the U.S. Department of the
Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in
accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and
regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in
a U.S. Securities System provided that such
securities are represented in an account ("Account")
of the Custodian in the U.S. Securities System which
shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to
securities of the 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 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 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 Fund at its request. Upon request,
the Custodian shall furnish 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 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 Fund 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 Fund on
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 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 Fund, it
shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the
U.S. 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 Fund Assets Held in the Custodian's Direct Paper
System. The Custodian may deposit and/or maintain
securities owned by the 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 Fund;
2) The Custodian may keep securities of the Fund in
the Direct Paper System only if such securities are
represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not
include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian with respect to
securities of the 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 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 Fund copies of
daily transaction sheets reflecting each day's
transaction in the U.S. Securities System for the
account of the Fund;
6) The Custodian shall provide the Fund with any report
on its system of internal accounting control as the
Fund may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt
of Proper Instructions from the Fund establish and
maintain a segregated account or accounts into which
account or accounts may be transferred cash and/or
securities, including securities maintained in an
account by the Custodian pursuant to Section 2.10
hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and a broker-
dealer registered under the Exchange Act and a member
of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating
to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission
or any registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions by
the Fund, (ii) for purposes of segregating cash or
government securities in connection with options
purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold
by the Fund, (iii) for the purposes of compliance by
the Fund with the procedures required by Investment
Company Act Release No. 10666, or any subsequent
release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv)
for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to
Proper Instructions from the Fund, a certified copy of
a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Fund
and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to
be proper corporate purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in
connection with receipt of income or other payments
with respect to domestic securities of the Fund held by
it and in connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the
domestic securities held hereunder, cause to be
promptly executed by the registered holder of such
securities, if the securities are registered otherwise
than in the name of the 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 Portfolio Securities.
Subject to the provisions of Section 2.3, the Custodian
shall transmit promptly to the Fund for the Fund
all written information (including, without limitation,
pendency of calls and maturities of domestic securities
and expirations of rights in connection therewith and
notices of exercise of call and put options written by
the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the
Custodian from issuers of the securities being held for
the Fund. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Fund all
written information received by the Custodian from
issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer
or any other similar transaction, the Fund shall notify
the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
3. Duties of the Custodian with Respect to Property of the
Fund Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Custodian to employ as
sub-custodians for the Fund 's securities and other
assets maintained outside the United States the foreign
banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper
Instructions", as defined in Section 5 of this
Contract, together with a certified resolution of the
Fund's Board of Trustees, the Custodian and the Fund
may agree to amend Schedule A hereto from time to time
to designate additional foreign banking institutions
and foreign securities depositories to act as sub-
custodian. Upon receipt of Proper Instructions, the
Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining
custody of the Fund 's assets.
3.2 Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody
of the foreign sub-custodians to: (a) "foreign
securities", as defined in paragraph (c)(1) of Rule
17f-5 under the Investment Company Act of 1940, and (b)
cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably
necessary to effect the Fund 's foreign securities
transactions. The Custodian shall identify on its
books as belonging to the Fund, the foreign securities
of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Systems. Except as may otherwise be
agreed upon in writing by the Custodian and the Fund,
assets of the Fund shall be maintained in a
clearing agency which acts as a securities depository
or in a book-entry system for the central handling of
securities located outside the United States (each a
"Foreign Securities System") only through arrangements
implemented by the foreign banking institutions serving
as sub-custodians pursuant to the terms hereof (Foreign
Securities Systems and U.S. Securities Systems are
collectively referred to herein as the "Securities
Systems"). Where possible, such arrangements shall
include entry into agreements containing the provisions
set forth in Section 3.5 hereof.
3.4 Holding Securities. The Custodian may hold securities
and other non-cash property for all of its customers,
including the Fund, with a Foreign Sub-custodian in a
single account that is identified as belonging to the
Custodian for the benefit of its customers, provided
however, that (i) the records of the Custodian with
respect to securities and other non-cash property of
the Fund which are maintained in such account shall
identify by book-entry those securities and other non-
cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-
cash property so held by the foreign sub-custodian be
held separately from any assets of the foreign sub-
custodian or of others.
3.5 Agreements with Foreign Banking Institutions. Each
agreement with a foreign banking institution shall
provide that: (a) the assets of the Fund will not
be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign
banking institution or its creditors or agent, except a
claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets
of the Fund will be freely transferable without the
payment of money or value other than for custody or
administration; (c) adequate records will be maintained
identifying the assets as belonging to the Fund; (d)
officers of or auditors employed by, or other
representatives of the Custodian, including to the
extent permitted under applicable law the independent
public accountants for the Fund, will be given access
to the books and records of the foreign banking
institution relating to its actions under its agreement
with the Custodian; and (e) assets of the Fund s held
by the foreign sub-custodian will be subject only to
the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon
request of the Fund, the Custodian will use its best
efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records
of any foreign banking institution employed as a
foreign sub-custodian insofar as such books and records
relate to the performance of such foreign banking
institution under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the
Fund from time to time, as mutually agreed upon,
statements in respect of the securities and other
assets of the Fund held by foreign sub-custodians,
including but not limited to an identification of
entities having possession of the Fund securities and
other assets and advices or notifications of any
transfers of securities to or from each custodial
account maintained by a foreign banking institution for
the Custodian on behalf of the Fund indicating, as to
securities acquired for the Fund, the identity of the
entity having physical possession of such securities.
3.8 Transactions in Foreign Custody Account. (a) Except as
otherwise provided in paragraph (b) of this Section
3.8, the provision of Sections 2.2 and 2.7 of this
Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States
by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to
the contrary, settlement and payment for securities
received for the account of the Fund and delivery of
securities maintained for the account of the Fund may
be effected in accordance with the customary
established securities trading or securities processing
practices and procedures in the jurisdiction or market
in which the transaction occurs, including, without
limitation, delivering securities to the purchaser
thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the
expectation of receiving later payment for such
securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such
entity's nominee to the same extent as set forth in
Section 2.3 of this Contract, and the Fund agrees to
hold any such nominee harmless from any liability as a
holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement
pursuant to which the Custodian employs a foreign
banking institution as a foreign sub-custodian shall
require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and
hold harmless, the Custodian and the Fund from and
against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the
institution's performance of such obligations. At the
election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect
to any claims against a foreign banking institution as
a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund
has not been made whole for any such loss, damage,
cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable
for the acts or omissions of a foreign banking
institution to the same extent as set forth with
respect to sub-custodians generally in this Contract
and, regardless of whether assets are maintained in the
custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as
contemplated by paragraph 3.13 hereof, the Custodian
shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from
nationalization, expropriation, currency restrictions,
or acts of war or terrorism or any loss where the sub-
custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this
paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relieved
of any responsibility to the Fund for any loss due to
such delegation, except such loss as may result from
(a) political risk (including, but not limited to,
exchange control restrictions, confiscation,
expropriation, nationalization, insurrection, civil
strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street
London Ltd. not caused by political risk) due to Acts
of God, nuclear incident or other losses under
circumstances where the Custodian and State Street
London Ltd. have exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the
Custodian to advance cash or securities for any purpose
for the benefit of Fund including the purchase or
sale of foreign exchange or of contracts for foreign
exchange, or in the event that the Custodian or its
nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in
connection with the performance of this Contract,
except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful
misconduct, any property at any time held for the
account of the Fund shall be security therefor and
should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available
cash and to dispose of the Fund's assets to the extent
necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall
furnish annually to the Fund, during the month of June,
information concerning the foreign sub-custodians
employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund
in connection with the initial approval of this
Contract. In addition, the Custodian will promptly
inform the Fund in the event that the Custodian learns
of a material adverse change in the financial condition
of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-
custodian not the subject of an exemptive order from
the Securities and Exchange Commission is notified by
such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity
has declined below $200 million (in each case computed
in accordance with generally accepted U.S. accounting
principles).
3.13 Branches of U.S. Banks. (a) Except as otherwise set
forth in this Contract, the provisions hereof shall not
apply where the custody of the Fund's assets are
maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the
qualification set forth in Section 26(a) of said Act.
The appointment of any such branch as a sub-custodian
shall be governed by paragraph 1 of this Contract.
(b) Cash held for the Fund in the
United Kingdom shall be maintained in an interest
bearing account established for the Fund with the
Custodian's London branch, which account shall be
subject to the direction of the Custodian, State Street
London Ltd. or both.
3.14 Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed
on the Fund or the Custodian as custodian of the Fund
by the tax law of the United States of America or any
state or political subdivision thereof. It shall be
the responsibility of the Fund to notify the Custodian
of the obligations imposed on the Fund or the Custodian
as custodian of the Fund by the tax law of
jurisdictions other than those mentioned in the above
sentence, including responsibility for withholding and
other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax
law shall be to use reasonable efforts to assist the
Fund with respect to any claim for exemption or refund
under the tax law of jurisdictions for which the Fund
has provided such information.
4. Payments for Sales or Repurchases or Redemptions of
Shares of the Fund
The Custodian shall receive from the distributor for
the Shares or from the Transfer Agent of the Fund and
deposit into the account of the Fund such payments
as are received for Shares of the Fund issued or sold
from time to time by the Fund. The Custodian will provide
timely notification to the Fund and the Transfer Agent of
any receipt by it of payments for Shares of the Fund.
From such funds as may be available for the purpose but
subject to the limitations of the Declaration of Trust and
any applicable votes of the Board of Trustees of the Fund
pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available
for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of
their Shares. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian is
authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection
with the redemption or repurchase of Shares of the Fund, the
Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the
Custodian in accordance with such procedures and controls as
are mutually agreed upon from time to time between the Fund
and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract
means a writing signed or initialled by one or more person
or persons as the Board of Trustees shall have from time to
time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved,
including a specific statement of the purpose for which such
action is requested. Oral instructions will be considered
Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The
Fund shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or
an Assistant Secretary as to the authorization by the Board
of Trustees of the Trust accompanied by a detailed
description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices
provided that the Board of Trustees and the Custodian are
satisfied that such procedures afford adequate safeguards
for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which
requires a segregated asset account in accordance with
Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express
authority from the 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
Fund;
2) surrender securities in temporary form for
securities in definitive form;
3) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details
in connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the
securities and property of the Fund except as
otherwise directed by the Board of Trustees of the
Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any
instructions, notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have
been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote
of the Board of Trustees of the 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.
8. Duties of Custodian with Respect to the Books of
Account and Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board
of Trustees of the Fund to keep the books of account of the
Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to
do so by the Fund, shall itself keep such books of account
and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net
income of the Fund as described in the Fund's currently
effective prospectus related to the Fund and shall advise
the Fund and the Transfer Agent daily of the total amounts
of such net income and, if instructed in writing by an
officer of the Fund to do so, shall advise the Transfer
Agent periodically of the division of such net income among
its various components. The calculations of the net asset
value per share and the daily income of Fund shall be made
at the time or times described from time to time in the
Fund's currently effective prospectus related to the Fund.
9. Records
The Custodian shall with respect to the 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 Fund under the Investment
Company Act of 1940, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder. All such
records shall be the property of the Fund and shall at all
times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees
or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian
and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and
the Custodian, include certificate numbers in such
tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the
Fund may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent
accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-1A, and
Form N-SAR or other annual reports to the Securities and
Exchange Commission and with respect to any other
requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as
the Fund 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 Securities System, relating to the services provided
by the Custodian under this Contract; such reports, shall be
of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed
by such examination, and, if there are no such inadequacies,
the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian, as
agreed upon from time to time between the Fund and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise
of reasonable care, the Custodian shall not be responsible
for the title, validity or genuineness of any property or
evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in
acting upon any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and
to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of
a three-party futures or options agreement. The Custodian
shall be held to the exercise of reasonable care in carrying
out the provisions of this Contract, but shall be kept
indemnified by and shall be without liability to the Fund
for any action taken or omitted by it in good faith without
negligence. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on
all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence
or willful misconduct or the negligence or willful
misconduct of a sub-custodian or agent, the Custodian shall
be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or
circumstances beyond the reasonable control of the Custodian
or any sub-custodian or Securities System or any agent or
nominee of any of the foregoing, including, without
limitation, nationalization or expropriation, imposition of
currency controls or restrictions, the interruption,
suspension or restriction of trading on or the closure of
any securities market, power or other mechanical or
technological failures or interruptions, computer viruses or
communications disruptions, acts of war or terrorism, riots,
revolutions, work stoppages, natural disasters or other
similar events or acts; (ii) errors by the Fund or the
Investment Advisor in their instructions to the Custodian
provided such instructions have been in accordance with this
Contract; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any delay or failure of any broker,
agent or intermediary, central bank or other commercially
prevalent payment or clearing system to deliver to the
Custodian's sub-custodian or agent securities purchased or
in the remittance or payment made in connection with
securities sold; (v) any delay or failure of any company,
corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, the
Fund, the Custodian's sub-custodians, nominees or agents or
any consequential losses arising out of such delay or
failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or
benefits; (vi) delays or inability to perform its duties due
to any disorder in market infrastructure with respect to any
particular security or Securities System; and (vii) any
provision of any present or future law or regulation or
order of the United States of America, or any state thereof,
or any other country, or political subdivision thereof or of
any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions
of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this
Contract.
If the Fund requires the Custodian to take any action
with respect to securities, which action involves the
payment of money or which action may, in the opinion of the
Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or
incurring liability of some other form, 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.
If the Fund requires the Custodian, its affiliates,
subsidiaries or agents, to advance cash or securities for any
purpose (including but not limited to securities settlements,
foreign exchange contracts and assumed settlement) 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 Fund shall be security therefor and should the Fund
fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect,
special or consequential damages.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its
execution, shall continue in full force and effect until
terminated as hereinafter provided, may be amended at any
time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.10
hereof in the absence of receipt of an initial certificate
of the Secretary or an Assistant Secretary that the Board
of Trustees of the Fund has approved the initial use of a
particular Securities System by the Fund, as required by
Rule 17f-4 under the Investment Company Act of 1940, as
amended and that the Custodian shall not with respect to the
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 of Trustees has approved the
initial use of the Direct Paper System by the Fund; provided
further, however, that the Fund shall not amend or terminate
this Contract in contravention of any applicable federal or
state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund may at any time
by action of its Board of Trustees (i) substitute another
bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately
terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller
of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to
the Custodian such compensation as may be due as of the date
of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund shall be
appointed by the Board of Trustees of the Fund, the
Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and
in the form for transfer, all securities of the Fund then
held by it hereunder and shall transfer to an account of the
successor custodian all of the securities of the Fund held
in a Securities System.
If no such successor custodian shall be appointed, the
Custodian shall, in like manner, upon receipt of a certified
copy of a vote of the Board of Trustees of the Fund, deliver
at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a
successor custodian or certified copy of a vote of the Board
of Trustees shall have been delivered to the Custodian on or
before the date when such termination shall become
effective, then the Custodian shall have the right to
deliver to a bank or trust company, which is a "bank" as
defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection,
having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less
than $25,000,000, all securities, funds and other properties
held by the Custodian on behalf of the Fund and all
instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to
transfer to an account of such successor custodian all of
the securities of the 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 Fund
to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the
Custodian shall be entitled to fair compensation for its
services during such period as the Custodian retains
possession of such securities, funds and other properties
and the provisions of this Contract relating to the duties
and obligations of the Custodian shall remain in full force
and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the
Custodian and the Fund 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 Fund. No
interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of
this Contract.
17. Additional Funds
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions
thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
19. Prior Contracts
This Contract supersedes and terminates, as of the date
hereof, all prior contracts between the Fund and the
Custodian relating to the custody of the Fund's assets.
20. 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.
21. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires
banks which hold securities for the account of customers to
respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of
that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In
order to comply with the rule, the Custodian needs the Fund
to indicate whether it authorizes the Custodian to provide
the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund
tells the Custodian "no", the Custodian will not provide
this information to requesting companies. If the Fund tells
the Custodian "yes" or does not check either "yes" or "no"
below, the Custodian is required by the rule to treat the
Fund as consenting to disclosure of this information for all
securities owned by the Fund or accounts established by the
Fund. For the Fund's protection, the Rule prohibits the
requesting company from using the Fund's name and address
for any purpose other than corporate communications. Please
indicate below whether the Fund consents or objects by
checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's
name, address, and share positions.
NO [X] The Custodian is not authorized to release the
Fund's name, address, and share positions.
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 XXXXX XXX FLOATING RATE LIMITED
LIABILITY COMPANY
______________________ By_________________________________
Assistant Secretary President
ATTEST STATE STREET BANK AND TRUST COMPANY
By _______________________________
Vice President
Schedule A
The following foreign banking institutions and foreign
securities depositories have been approved by the Board of
Trustees of Xxxxx Xxx Trust for use as sub-custodians for the
Fund's securities and other assets:
(Insert banks and securities depositories)
