Custodian Agreement
This Agreement between Alliance National Municipal Fund,
Inc. a corporation organized and existing under the laws of
Maryland (the "Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company (the "Custodian").
Witnesseth that in consideration of the mutual
covenants and agreements hereinafter contained, the parties
hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its
assets, 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"). The Fund agrees to deliver to the
Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions
received by it from time to time, and the cash consideration
received by it for such new or treasury shares of beneficial
interest of 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" (as such term is defined in
Section 6 hereof), the Custodian shall 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 Directors
of the Fund (the "Board"), 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 subcustodian 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 Schedules A and B hereto,
but only in accordance with the applicable provisions of Sections
3 and 4.
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 2.9 in a clearing agency
which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury and certain
federal agencies (each, a "U.S. Securities System") and (b)
commercial paper of an issuer for which the Custodian 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 2.10.
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 (the "Direct Paper System Account") only upon receipt of
Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the
Fund and receipt of payment therefor;
2) Upon the receipt of 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 2.9 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 2.8 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
2
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
3
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;
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 ("CFTC") 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 (the "Transfer Agent") for the Fund, for
delivery to such Transfer Agent or to the holders
of shares in connection with distributions in kind,
as may be described from time to time in the Fund's
currently effective prospectus and statement of
additional information (the "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 Proper Instructions, 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 advisor as the Fund, or in the name or nominee name of
any agent appointed pursuant to Section 2.8 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 Agreement 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,
4
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 Agreement, 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").
Monies 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 1940 Act and that each such bank or
trust company and the monies to be deposited with each such bank
or trust company shall be approved by vote of a majority of the
Board. Such monies 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, 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 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 the 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
5
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, 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 1940 Act 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 2.9
hereof; (c) in the case of a purchase involving the
Direct Paper System, in accordance with the
conditions set forth in Section 2.10; (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 6;
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
as set forth in Article 5 hereof;
6
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 declared
pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in
respect of securities sold short; and
7) For any other proper purpose, but only upon receipt
of Proper Instructions 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 Appointment of Agents. The Custodian may at any
time or times in its discretion appoint (and may at any time
remove) any other bank or trust company which is itself qualified
under the 1940 Act to act as a custodian, as its agent to carry
out such of the provisions of this Article 2 as the Custodian may
from time to time direct; provided, however, that the appointment
of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.9 Deposit of Securities in U.S. Securities Systems.
The Custodian may deposit and/or maintain domestic 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 domestic 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;
7
2) The records of the Custodian with respect to
domestic 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 domestic 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 domestic 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 domestic 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;
and
5) Anything to the contrary in this Agreement
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
8
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.
2.10 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;
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; and
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.
9
2.11 Segregated Account. The Custodian shall upon
receipt of Proper Instructions establish and maintain a
segregated account or accounts for and on behalf of the 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 2.9 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 Commodities 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 U.S.
Securities and Exchange Commission (the "SEC"), or interpretative
opinion of the staff of the SEC, 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 Proper Instructions setting forth
the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
2.12 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 such securities.
2.13 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.
2.14 Communications Relating to Fund Securities.
Subject to the provisions of Section 2.3, the Custodian shall
transmit promptly to 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
10
and the maturity of futures contracts purchased or sold by the
Fund) received by the Custodian from issuers of the domestic
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 domestic securities whose tender or exchange is
sought and from the party (or its 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. Provisions Relating to Rules 17f-5 and 17f-7
3.1 Definitions. As used throughout this Agreement,
the capitalized terms set forth below shall have the indicated
meanings:
"Country Risk" means all factors reasonably related to the
systemic risk of holding Foreign Assets in a particular country
including, but not limited to, such country's political
environment, economic and financial infrastructure (including any
Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and
laws and regulations applicable to the safekeeping and recovery
of Foreign Assets held in custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section
(a)(1) of Rule 17f-5, including a majority-owned or indirect
subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank
holding company meeting the requirements of an Eligible Foreign
Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the U.S. Securities and Exchange Commission (the
"SEC")), or a foreign branch of a Bank (as defined in Section
2(a)(5) of the 0000 Xxx) meeting the requirements of a custodian
under Section 17(f) of the 1940 Act; the term does not include
any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in
section (b)(1) of Rule 17f-7.
"Foreign Assets" means any of the Fund's investments (including
foreign currencies) for which the primary market is outside the
United States and such cash and cash equivalents as are
reasonably necessary to effect the Fund's transactions in such
investments.
"Foreign Custody Manager" has the meaning set forth in section
(a)(3) of Rule 17f-5.
11
3.2 The Custodian as Foreign Custody Manager.
3.2.1 Delegation to the Custodian as Foreign Custody
Manager. The Fund, by resolution adopted by the Board, hereby
delegates to the Custodian, in accordance with Section (b) of
Rule 17f-5, the responsibilities set forth in this Section 3.2
with respect to Foreign Assets held outside the United States,
and the Custodian hereby accepts such delegation as Foreign
Custody Manager of the Fund.
3.2.2 Countries covered. The Foreign Custody Manager
shall be responsible for performing the delegated
responsibilities defined below only with respect to the countries
and custody arrangements for each such country listed on Schedule
A to this Agreement, which list of countries may be amended from
time to time by the Fund with the agreement of the Foreign
Custody Manager. The Foreign Custody Manager shall list on
Schedule A the Eligible Foreign Custodians selected by the
Foreign Custody Manager to maintain the Fund's assets, which list
of Eligible Foreign Custodians may be amended from time to time
in the sole discretion of the Foreign Custody Manager. The
Foreign Custody Manager will provide amended versions of Schedule
A in accordance with Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper
Instructions to open an account or to place or maintain Foreign
Assets in a country listed on Schedule A, and the fulfillment by
the Fund, of the applicable account opening requirements for such
country, the Foreign Custody Manager shall be deemed to have been
delegated by the Board responsibility as Foreign Custody Manager
with respect to that country and to have accepted such
delegation. Execution of this Amendment by the Fund shall be
deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each country listed on Schedule A
in which the Custodian has previously placed or currently
maintains Foreign Assets pursuant to the terms of the Agreement.
Following the receipt of Proper Instructions directing the
Foreign Custody Manager to close the account of the Fund with the
Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board to
the Custodian as Foreign Custody Manager for that country shall
be deemed to have been withdrawn and the Custodian shall
immediately cease to be the Foreign Custody Manager of the Fund
with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of
delegated responsibilities with respect to a designated country
upon written notice to the Fund. Sixty (60) days (or such longer
period to which the parties agree in writing) after receipt of
any such notice by the Fund, the Custodian shall have no further
responsibility in its capacity as Foreign Custody Manager to the
12
Fund with respect to the country as to which the Custodian's
acceptance of delegation is withdrawn.
3.2.3. Scope of Delegated Responsibilities:
(a) Selection of Eligible Foreign Custodians. Subject
to the provisions of this Section 3.2, the Foreign Custody
Manager may place and maintain the Foreign Assets in the care of
the Eligible Foreign Custodian selected by the Foreign Custody
Manager in each country listed on Schedule A, as amended from
time to time. In performing its delegated responsibilities as
Foreign Custody Manager to place or maintain Foreign Assets with
an Eligible Foreign Custodian, the Foreign Custody Manager shall
determine that the Foreign Assets will be subject to reasonable
care, based on the standards applicable to custodians in the
country in which the Foreign Assets will be held by that Eligible
Foreign Custodian, after considering all factors relevant to the
safekeeping of such assets, including, without limitation the
factors specified in Rule 17f-5(c)(1).
(b) Contracts With Eligible Foreign Custodians. The
Foreign Custody Manager shall determine that the contract
governing the foreign custody arrangements with each Eligible
Foreign Custodian selected by the Foreign Custody Manager will
satisfy the requirements of Rule 17f-5(c)(2).
(c) Monitoring. In each case in which the Foreign
Custody Manager maintains Foreign Assets with an Eligible Foreign
Custodian selected by the Foreign Custody Manager, the Foreign
Custody Manager shall establish a system to monitor in accordance
with Rule 17f-5(c)(3), (i) the appropriateness of maintaining the
Foreign Assets with such Eligible Foreign Custodian and (ii) the
contract governing the custody arrangements established by the
Foreign Custody Manager with the Eligible Foreign Custodian. In
the event the Foreign Custody Manager determines that the custody
arrangements with an Eligible Foreign Custodian it has selected
are no longer appropriate, the Foreign Custody Manager shall
notify the Board in accordance with Section 3.2.5 hereunder. In
such event where the Foreign Custody Manager has selected an
alternative Eligible Foreign Custodian in accordance with Section
3.2.3(a) herein, the Foreign Custody Manager will arrange the
transfer of the affected Foreign Assets to such Eligible Foreign
Custodian as soon as reasonably practicable.
3.2.4 Guidelines for the Exercise of Delegated
Authority. For purposes of this Article 3, the Foreign Custody
Manager shall have no responsibility for such Country Risk as is
incurred by placing and maintaining the Foreign Assets in each
country for which the Custodian is serving as Foreign Custody
Manager of the Fund.
13
3.2.5 Reporting Requirements. The Foreign Custody
Manager shall report the withdrawal of the Foreign Assets from an
Eligible Foreign Custodian and the placement of such Foreign
Assets with another Eligible Foreign Custodian by providing to
the Board and upon Proper Instructions to the Fund's investment
adviser an amended Schedule A at the end of the calendar quarter
in which an amendment to such Schedule has occurred. The Foreign
Custody Manager shall make written reports notifying the Board
and upon Proper Instructions the Fund's investment adviser of any
other material change in the foreign custody arrangements of the
Fund described in this Section 3.2 after the occurrence of the
material change.
3.2.6 Standard of Care as Foreign Custody Manager of
the Fund. In performing the responsibilities delegated to it,
the Foreign Custody Manager agrees to exercise reasonable care,
prudence and diligence such as a person having responsibility for
the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
3.2.7 Representations with Respect to Rule 17f-5. The
Foreign Custody Manager represents to the Fund that it is a U.S.
Bank as defined in section (a)(7) of Rule 17f-5. The Fund
represents to the Custodian that the Board has determined that it
is reasonable for the Board to rely on the Custodian to perform
the responsibilities delegated pursuant to this Contract to the
Custodian as the Foreign Custody Manager of the Fund.
3.2.8 Effective Date and Termination of the Custodian
as Foreign Custody Manager. The Board's delegation to the
Custodian as Foreign Custody Manager of the Fund shall be
effective as of the date hereof and shall remain in effect until
terminated at any time, without penalty, by written notice from
the terminating party to the non-terminating party. Termination
will become effective sixty (60) days after receipt by the non-
terminating party of such notice. The provisions of Section
3.2.2 hereof shall govern the delegation to and termination of
the Custodian as Foreign Custody Manager of the Fund with respect
to designated countries.
3.3 Eligible Securities Depositories.
3.3.1 Analysis and Monitoring. The Custodian shall (a)
provide the Fund (or its duly-authorized investment manager or
investment adviser) with a list of Eligible Securities
Depositories on Schedule B hereto, as amended from time to time
by the Custodian and with an analysis of the custody risks
associated with maintaining assets with the Eligible Securities
Depositories set forth on Schedule B hereto in accordance with
section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on
a continuing basis, and promptly notify the Fund (or its duly-
14
authorized investment manager or investment adviser) of any
material change in such risks, in accordance with section
(a)(1)(i)(B) of Rule 17f-7. The risk analysis provided by the
Custodian may include consideration of the following, as deemed
appropriate and relevant by the Custodian: a depository's
expertise and market reputation, the quality of its services, its
financial strength (including the level of settlement guarantee
funds, collateral requirements, lines of credit, or insurance as
compared with participants' daily settlement obligations), any
insurance or indemnification arrangements, the extent and quality
of regulation and independent examination of the depository, its
standing in published ratings, its internal controls and other
procedures for safeguarding investments, and any related legal
protections.
3.3.2 Standard of Care. The Custodian agrees to
exercise reasonable care, prudence and diligence in performing
the duties set forth in Section 3.3.1.
4. Duties of the Custodian with Respect to Fund Property
Held Outside the United States.
4.1 Definitions. As used throughout this Agreement,
the capitalized terms set forth below shall have the indicated
meanings:
"Foreign Securities System" means an Eligible Securities
Depository listed on Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution
serving as an Eligible Foreign Custodian.
4.2. Holding Securities. The Custodian shall identify
on its books as belonging to the Fund the foreign securities held
by each Foreign Sub-Custodian or Foreign Securities System. The
Custodian may hold foreign securities for all of its customers,
including the Fund, with any Foreign Sub-Custodian in an 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 foreign securities of the Fund which
are maintained in such account shall identify those securities as
belonging to the Fund and (ii), to the extent permitted and
customary in the market in which the account is maintained, the
Custodian shall require that securities so held by the Foreign
Sub-Custodian be held separately from any assets of such Foreign
Sub-Custodian or of other customers of such Foreign Sub-
Custodian.
4.3. Foreign Securities Systems. Foreign securities
shall be maintained in a Foreign Securities System in a
designated country through arrangements implemented by the
15
Custodian or a Foreign Sub-Custodian, as applicable, in such
country.
4.4. Transactions in Foreign Custody Account.
4.4.1. Delivery of Foreign Assets. The Custodian or a
Foreign Sub-Custodian shall release and deliver foreign
securities of the Fund held by the Custodian or such Foreign Sub-
Custodian, or in a Foreign Securities System account, only upon
receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon the sale of such foreign securities for the
Fund in accordance with commercially reasonable
market practice in the country where such foreign
securities are held or traded, including, without
limitation: (A) delivery against expectation of
receiving later payment; or (B) in the case of a
sale effected through a Foreign Securities
System, in accordance with the rules governing
the operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement
related to foreign securities;
(iii) to the depository agent in connection with tender
or other similar offers for foreign securities of
the Fund;
(iv) to the issuer thereof or its agent when such
foreign securities are called, redeemed, retired
or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer
into the name of the Custodian (or the name of
the respective Foreign Sub-Custodian or of any
nominee of the Custodian or such Foreign Sub-
Custodian) or for exchange for a different number
of bonds, certificates or other evidence
representing the same aggregate face amount or
number of units;
(vi) to brokers, clearing banks or other clearing
agents for examination or trade execution in
accordance with market custom; provided that in
any such case the Foreign Sub-Custodian shall
have no responsibility or liability for any loss
arising from the delivery of such securities
prior to receiving payment for such securities
16
except as may arise from the Foreign Sub-
Custodian's own negligence or willful misconduct;
(vii) 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;
(viii) in the case of warrants, rights or similar
foreign 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;
(ix) for delivery as security in connection with any
borrowing by the Fund requiring a pledge of
assets by the Fund;
(x) in connection with trading in options and futures
contracts, including delivery as original margin
and variation margin;
(xi) in connection with the lending of foreign
securities; and
(xii) for any other purpose, but only upon receipt of
Proper Instructions specifying the foreign
securities to be delivered and naming the person
or persons to whom delivery of such securities
shall be made.
4.4.2. Payment of Fund Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall pay out, or
direct the respective Foreign Sub-Custodian or the respective
Foreign Securities System to pay out, monies of the Fund in the
following cases only:
(i) upon the purchase of foreign securities for the
Fund, unless otherwise directed by Proper
Instructions, by (A) delivering money to the
seller thereof or to a dealer therefor (or an
agent for such seller or dealer) against
expectation of receiving later delivery of such
foreign securities; or (B) in the case of a
purchase effected through a Foreign Securities
System, in accordance with the rules governing
the operation of such Foreign Securities System;
17
(ii) in connection with the conversion, exchange or
surrender of foreign securities of the Fund;
(iii) for the payment of any expense or liability of
the Fund, including but not limited to the
following payments: interest, taxes, investment
advisory fees, transfer agency fees, fees under
this Agreement, legal fees, accounting fees, and
other operating expenses;
(iv) for the purchase or sale of foreign exchange or
foreign exchange contracts for the Fund,
including transactions executed with or through
the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures
contracts, including delivery as original margin
and variation margin;
(vi) for payment of part or all of the dividends
received in respect of securities sold short;
(vii) in connection with the borrowing or lending of
foreign securities; and
(viii) for any other purpose, but only upon receipt of
Proper Instructions specifying the amount of such
payment setting forth the purpose of such
payment, declaring such purpose to be a proper
corporate purpose, and naming the person or
persons to whom such payment is to be made.
4.4.3. Market Conditions. Notwithstanding any
provision of this Agreement to the contrary, settlement and
payment for Foreign Assets received for the account of the Fund
and delivery of Foreign Assets maintained for the account of the
Fund may be effected in accordance with the customary established
securities trading or processing practices and procedures in the
country or market in which the transaction occurs that have been
generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or
to a dealer therefor (or an agent for such purchaser or dealer)
with the expectation of receiving later payment for such Foreign
Assets from such purchaser or dealer. For purposes of this
Agreement, the term "Institutional Clients" means U.S. registered
investment companies or major U.S. commercial banks, insurance
companies, pension funds or substantially similar institutions
which as part of their ordinary business operations purchase or
sell securities and make use of global custody services.
18
The Custodian shall provide to the Board the information with
respect to custody and settlement practices in countries in which
the Custodian employs a Foreign Sub-Custodian described on
Schedule C hereto at the time or times set forth on such
Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being
provided with substantively less information than had been
previously provided hereunder.
4.5. Registration of Foreign Securities. The foreign
securities maintained in the custody of a Foreign Sub-Custodian
(other than bearer securities) shall be registered in the name of
the Fund or in the name of the Custodian or in the name of any
Foreign Sub-Custodian or in the name of any nominee of the
foregoing, and the Fund on agrees to hold any such nominee
harmless from any liability as a holder of record of such foreign
securities except to the extent the Fund incurs loss or damage
due to the failure of such nominee to meet its standard of care
set forth in the relevant contract. The Custodian or a Foreign
Sub-Custodian shall not be obligated to accept securities on
behalf of the Fund under the terms of this Agreement unless the
form of such securities and the manner in which they are
delivered are in accordance with reasonable market practice.
4.6 Bank Accounts. The Custodian shall identify on its
books as belonging to the Fund cash (including cash denominated
in foreign currencies) deposited with the Custodian. Where the
Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts shall be opened and
maintained outside the United States on behalf of the Fund with a
Foreign Sub-Custodian. All accounts referred to in this Section
shall be subject only to draft or order by the Custodian (or, if
applicable, such Foreign Sub-Custodian) acting pursuant to the
terms of this Agreement to hold cash received by or from or for
the account of the Fund. Cash maintained on the books of the
Custodian (including its branches, subsidiaries and affiliates),
regardless of currency denomination, is maintained in bank
accounts established under, and subject to the laws of, The
Commonwealth of Massachusetts.
4.7. Collection of income. The Custodian shall use
reasonable commercial efforts to collect all income and other
payments with respect to the Foreign Assets held hereunder to
which the Fund shall be entitled and shall credit such income, as
collected, to the Fund. In the event that extraordinary measures
are required to collect such income, the Fund and the Custodian
shall consult as to such measures and as to the compensation and
expenses of the Custodian relating to such measures.
19
4.8 Shareholder Rights. With respect to the foreign
securities held pursuant to this Article 4, the Custodian will
use reasonable commercial efforts to facilitate the exercise of
voting and other shareholder rights, subject always to the laws,
regulations and practical constraints that may exist in the
country where such securities are issued. The Fund acknowledges
that local conditions, including lack of regulation, onerous
procedural obligations, lack of notice and other factors may have
the effect of severely limiting the ability of the Fund to
exercise shareholder rights.
4.9. Communications Relating to Foreign Securities. The
Custodian shall transmit promptly to the Fund written information
with respect to materials received by the Custodian via the
Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of the Fund (including, without
limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith).
With respect to tender or exchange offers, the Custodian shall
transmit promptly to the Fund written information with respect to
materials so received by the Custodian from issuers of the
foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer.
Subject to the standard of care to which the Custodian is held
hereunder, the Custodian shall not be liable for any untimely
exercise of any tender, exchange or other right or power in
connection with foreign securities or other property of the Fund
at any time held by it unless (i) the Custodian or the respective
Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or
power, and both (i) and (ii) occur at least three business days
prior to the date on which the Custodian is to take action to
exercise such right or power.
4.10. Liability of Foreign Sub-Custodians. Each
agreement pursuant to which the Custodian employs a Foreign Sub-
Custodian shall, to the extent possible, require the Foreign Sub-
Custodian to exercise reasonable care in the performance of its
duties, and to indemnify, and hold harmless, the Custodian from
and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Sub-Custodian's
performance of such obligations. At the Fund's election, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claims against a Foreign Sub-Custodian 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.
4.11 Tax Law. Except to the extent that imposition of
any tax liability arises from the Custodian's failure to perform
20
in accordance with the terms of this section 4.11, 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 or of 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 countries other than the United States, 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 countries for which the Fund has provided such
information.
4.12. Liability of Custodian. Except as may arise from
the Custodian's own negligence or willful misconduct, or the
negligence or willful misconduct of a Sub-Custodian, the
Custodian shall be without liability to the Fund for any loss,
liability, claim or expense resulting from or caused by anything
which is part of Country Risk.
The Custodian shall be liable for the acts or omissions of a
Foreign Sub-Custodian to the same extent as set forth with
respect to sub-custodians generally in the Agreement and,
regardless of whether assets are maintained in the custody of a
Foreign Sub-Custodian or a Foreign Securities System, 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 4.12, (i) 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; and (ii) the
delegation by State Street Bank and Trust Company to its
affiliate, State Street Trust Company Canada, of sub-custody
duties in Canada shall not relieve State Street Bank and Trust
Company of any responsibility for any loss due to the delegation
to State Street Trust Company Canada, except (a) such loss as may
result from political risk (e.g., exchange control restrictions,
confiscation, expropriation, nationalization, insurrection, civil
21
strife or armed hostilities) and (b) other losses (excluding
losses resulting from a bankruptcy or insolvency of State Street
Trust Company Canada not caused by political risk) under
circumstances where State Street Bank and Trust Company and State
Street Trust Company Canada have exercised reasonable care
(including, without limitation, Acts of God, nuclear incident and
the like).
5. Payments for Repurchases or Redemptions and Sales
of Shares
From such funds as may be available for the purpose, but subject
to the limitations of the Articles of Incorporation and By Laws
and any applicable votes of the Board 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 Fun, 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, 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.
The Custodian shall receive from the distributor for the Fund's
Shares or from the Transfer Agent and deposit into the Fund's
account such payments as are received for Shares thereof 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.
6. Proper Instructions
Proper Instructions as used herein means a writing signed or
initialed by one or more person or persons as the Board 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. Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the
instructions are consistent with the security procedures agreed
22
to by the Fund and the Custodian including, but not limited to,
the security procedures selected by the Fund on the Funds
Transfer Addendum to this Agreement. 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
2.11.
7. 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 Agreement,
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.
8. 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 Directors
of the Fund as conclusive evidence (a) of the authority of any
person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Directors of the
Fund pursuant to the Articles of Incorporation and By Laws 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.
23
9. 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 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 currently
effective prospectus 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 the Fund shall
be made at the time or times described from time to time in the
currently effective Prospectus.
10. Records
The Custodian shall create and maintain all records relating to
its activities and obligations under this Agreement in such
manner as will meet the obligations of the Fund 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 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 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.
11. 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 Exchange Commission and with respect to any other
requirements of such Commission.
24
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
Agreement 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 Agreement,
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 or 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 Agreement; (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,
25
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 Sub-Custodian to the same extent as set forth with
respect to sub-custodians generally in this Agreement.
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 Agreement, 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.
In no event shall the Custodian be liable for indirect, special
or consequential damages.
14. Effective Period, Termination and Amendment
This Agreement 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;
26
provided, however, that the Fund shall not amend or terminate
this Agreement in contravention of any applicable federal or
state regulations, or any provision of the Articles of
Incorporation and By Laws, and further provided, that the Fund
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 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 Agreement, 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, 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, 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 shall have
been delivered to the Custodian on or before the date when such
termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts, of its own selection, having an aggregate capital,
surplus, and undivided profits, as shown by its last published
report, of not less than $25,000,000, all securities, funds and
other properties held by the Custodian hereunder and all
instruments held by the Custodian relative thereto and all other
property held by it under this Agreement on behalf of the Fund,
and to transfer to an account of such successor custodian all of
the Fund's securities held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the
Custodian under this Agreement.
27
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 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 Agreement 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 Agreement, the Custodian
and the Fund may from time to time agree on such provisions
interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the
general tenor of this Agreement. 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
Fund's Articles of Incorporation and By Laws. No interpretive or
additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
17. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth
of Massachusetts.
18. Prior Agreements
This Agreement supersedes and terminates, as of the date hereof,
all prior agreements between the Fund and the Custodian relating
to the custody of the Fund's assets.
19. Reproduction of Documents
This Agreement and all schedules, exhibits, attachments and
amendments hereto may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that
any such reproduction shall be admissible in evidence as the
original itself in any judicial or 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.
28
20. Remote Access Services Addendum
The Custodian and the Fund agree to be bound by the terms of the
Remote Access Services Addendum attached hereto.
21. Shareholder Communications Election
Securities Exchange Commission Rule 14b-2 requires banks which
hold securities for the account of customers to respond to
requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held
by the bank unless the beneficial owner has expressly objected to
disclosure of this information. In order to comply with the
rule, the Custodian needs the Fund to indicate whether it
authorizes the Custodian to provide the Fund's name, address, and
share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will
not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or
"no" below, the Custodian is required by the rule to treat the
Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established
by the Fund. For the Fund's protection, the Rule prohibits the
requesting company from using the Fund's name and address for any
purpose other than corporate communications. Please indicate
below whether the Fund consents or objects by checking one of the
alternatives below.
YES [ ] The Custodian is authorized to release the
Fund's name, address, and share positions.
NO [X] The Custodian is not authorized to release
the Fund's name, address, and share
positions.
[Remainder of page intentionally left blank.]
29
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 January 15, 2002.
Alliance National Municipal
Fund, Inc. Fund signature attested to By:
By:_________________________ By:___________________________
Name:_______________________ Name:_________________________
Title:______________________ Title: *[secretary/ass't secretary]
----------------------------
State Street Bank and Trust
Company Signature attested to By:
By:_________________________ By:___________________________
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. XxXxxxxx
---------------------- -------------------------
Title: Executive Vice President Title: V.P. and Senior Counsel
------------------------ ----------------------------
30
REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
ADDENDUM to that certain Custodian Agreement dated as of
January 15, 2002 (the "Custodian Agreement") between Alliance
National Municipal Fund, Inc. (the "Customer") and State Street
Bank and Trust Company.
State Street Bank and Trust Company, its subsidiaries
and affiliates (collectively, "State Street") has developed and
utilized proprietary accounting and other systems in conjunction
with the custodian services which State Street provides to the
Customer. In this regard, State Street maintains certain
information in databases under its control and ownership which it
makes available to its customers (the "Remote Access Services").
The Services
State Street agrees to provide the Customer, and its designated
investment advisors, consultants or other third parties
authorized by State Street who agree to abide by the terms of
this Addendum ("Authorized Designees") with access to In~SightSM
as described in Exhibit A or such other systems as may be offered
from time to time (the "System") on a remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized
Designees to comply, with remote 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 and access to
the Remote Access Services. The Customer agrees to advise State
Street immediately in the event that it learns or has reason to
believe that any person to whom it has given access to the System
or the Remote Access Services has violated or intends to violate
the terms of this Addendum and the Customer will cooperate with
State Street in seeking injunctive or other equitable relief.
The Customer agrees to discontinue use of the System and Remote
Access Services, if requested, for any security reasons cited by
State Street.
Fees
Fees and charges for the use of the System and the Remote 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"). The Customer shall be responsible
for any tariffs, duties or taxes imposed or levied by any
government or governmental agency by reason of the transactions
contemplated by this Addendum, including, without limitation,
federal, state and local taxes, use, value added and personal
31
property taxes (other than income, franchise or similar taxes
which may be imposed or assessed against State Street). Any
claimed exemption from such tariffs, duties or taxes shall be
supported by proper documentary evidence delivered to State
Street.
Proprietary Information/Injunctive Relief
The System and Remote Access Services described herein and the
databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems,
software, know-how, algorithms, programs, training aids, printed
materials, methods, books, records, files, documentation and
other information made available to the Customer by State Street
as part of the Remote Access Services and through the use of the
System and all copyrights, patents, trade secrets and other
proprietary rights of State Street related thereto are the
exclusive, valuable and confidential property of State Street and
its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its Authorized Designees
to keep the Proprietary Information confidential and to limit
access to its employees and Authorized Designees (under a similar
duty of confidentiality) who require access to the System for the
purposes intended. The foregoing shall not apply to Proprietary
Information in the public domain or required by law to be made
public.
The Customer agrees to use the Remote Access Services only in
connection with the proper purposes of this Addendum. The
Customer will not, and will cause its employees and Authorized
Designees not to, (i) permit any third party to use the System or
the Remote Access Services, (ii) sell, rent, license or otherwise
use the System or the Remote Access Services in the operation of
a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the
Remote Access Services for any fund, trust or other investment
vehicle without the prior written consent of State Street, or
(iv) allow or cause any information transmitted from State
Street's databases, including data from third party sources,
available through use of the System or the Remote Access
Services, to be redistributed or retransmitted for other than use
for or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees
will modify the System in any way, enhance or otherwise create
derivative works based upon the System, nor will the Customer or
its Authorized Designees reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the
System.
32
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 and that 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.
Limited Warranties
State Street represents and warrants that it is the owner of and
has the right to grant access to the System and to provide the
Remote Access Services contemplated herein. Because of the
nature of computer information technology and the necessity of
relying upon third party sources, and data and pricing
information obtained from third parties, the System and Remote
Access Services are provided "AS IS", and the Customer and its
Authorized Designees shall be solely responsible for the
investment decisions, regulatory reports and statements produced
using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized
Designees for any direct or indirect, special, incidental,
punitive or consequential damages arising out of or in any way
connected with the System or the Remote Access Services, nor
shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such
party's control.
State Street will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the
available state of the art technology to offer products that are
Year 2000 compliant, including, but not limited to, century
recognition of dates, calculations that correctly compute same
century and multi century formulas and date values, and interface
values that reflect the date issues arising between now and the
next one-hundred years, and if any changes are required, State
Street will make the changes to its products at no cost to you
and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do
likewise for its systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET FOR
ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED
HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
33
Infringement
State Street will defend or, at our option, settle any claim or
action brought against the Customer to the extent that it is
based upon an assertion that access to the System or use of the
Remote Access Services by the Customer under this Addendum
constitutes direct infringement of any United States patent or
copyright or misappropriation of a trade secret, provided that
the Customer notifies State Street promptly in writing of any
such claim or proceeding and cooperates with State Street in the
defense of such claim or proceeding. Should the System or the
Remote Access Services or any part thereof become, or in State
Street's opinion be likely to become, the subject of a claim of
infringement or the like under the patent or copyright or trade
secret laws of the United States, State Street shall have the
right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote
Access Services, (ii) replace or modify the System or the Remote
Access Services so that the System or the Remote Access Services
becomes noninfringing, or (iii) terminate this Addendum without
further obligation.
Termination
Either party to the Custodian Agreement may terminate this
Addendum (i) for any reason by giving the other party at least
one-hundred and eighty (180) days' prior written notice in the
case of notice of termination by State Street to the Customer or
thirty (30) 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 Addendum by giving the other party written notice of
termination. This Addendum shall in any event terminate within
ninety (90) days after the termination of the Custodian
Agreement. In the event of termination, the Customer will return
to State Street all copies of documentation and other
confidential information in its possession or in the possession
of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive
termination for a period of three (3) years.
Miscellaneous
This Addendum and the exhibit hereto constitutes the entire
understanding of the parties to the Custodian Agreement with
respect to access to the System and the Remote Access Services.
This Addendum cannot be modified or altered except in a writing
duly executed by each of State Street and the Customer and shall
be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.
34
By its execution of the Custodian Agreement, the Customer, for
itself and its Authorized Designees, accepts the terms of this
Addendum
35
EXHIBIT A
to
REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
IN~SIGHT`sm'
System Product Description
In~Sight`sm' provides information delivery and on-line access to
State Street. In~Sight`sm' allows users a single point of entry
into the many views of data created by the diverse systems and
applications. Reports and data from systems such as Investment
Policy Monitor`sm', Multicurrency Horizon`sm', Securities
Lending, Performance & Analytics can be accessed through
In~Sight`sm'. This Internet-enabled application is designed to
run from a Web browser and perform across low-speed data line or
corporate high-speed backbones. In~Sight`sm' also offers users a
flexible toolset, including an ad-hoc query function, a custom
graphics package, a report designer, and a scheduling capability.
Data and reports offered through In~Sight`sm' will continue to
increase in direct proportion with the customer roll out, as it
is viewed as the information delivery system will grow with State
Street's customers.
36
FUNDS TRANSFER ADDENDUM
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to
promptly debit Client's 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 agrees that the Security Procedures are
reasonable and adequate for its wire transfer transactions and
agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and
accepted by State Street after being confirmed by any of the
selected Security Procedures. The Client also agrees to be bound
by any other valid and authorized payment order accepted 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. Financial
institutions that receive payment orders initiated by State
Street at the instruction of the Client may also process payment
orders on the basis of account numbers, regardless of any name
included in the payment order. State Street will also rely on
any financial institution identification numbers included in any
payment order, regardless of any financial institution name
included in the payment order.
4. REJECTION: State Street reserves the right to decline to
process or delay the processing of a payment order which (a) is
37
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 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.
38
9. CONFIRMATION STATEMENTS: Confirmation of State Street's
execution of payment orders shall ordinarily be provided within
24 hours. Notice may be delivered through State Street's
proprietary information systems, such as, but not limited to
Horizon and GlobalQuest`r' account statements, advices, or by
facsimile or callback. The Client must report any objections to
the execution of a payment order within 30 days.
10. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not
be required to repay any deposit made at a non-U.S. branch of
State Street, or any deposit made with State Street and
denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar
currency is prevented, prohibited or otherwise blocked due to:
(a) an act of war, insurrection or civil strife; (b) any action
by a non-U.S. government or instrumentality or authority
asserting governmental, military or police power of any kind,
whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement
or otherwise that usurps, supervenes or otherwise materially
impairs the normal operation of civil authority; or(c) the
closure of a non-U.S. branch of State Street in order to prevent,
in the reasonable judgment of State Street, harm to the employees
or property of State Street. The obligation to repay any such
deposit shall not be transferred to and may not be enforced
against any other branch of State Street.
The foregoing provisions constitute the disclosure required by
Massachusetts General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at
a non-U.S. branch or any deposit denominated in a non-U.S.
currency during the period in which its repayment has been
prevented, prohibited or otherwise blocked, State Street will
repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist.
11. MISCELLANEOUS: State Street and the Client agree to
cooperate to attempt to recover any funds erroneously paid to the
wrong party or parties, regardless of any fault of State Street
or the Client, but the party responsible for the erroneous
payment shall bear all costs and expenses incurred in trying to
effect such recovery. These Guidelines may not be amended except
by a written agreement signed by the parties.
39
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
40
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 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
41
authenticated by the Client. Clients using ACH must select one or
more of the following delivery options:
[ ]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
42
_____________________________
Telex Number
43
INSTRUCTION(S)
TELEPHONE CONFIRMATION
Fund Alliance National Municipal Fund, Inc.
_______________________________________
Investment Adviser ___________________________________
Authorized Initiators
Please Type or Print
Please provide a listing of Fund officers or other individuals
who are currently authorized to INITIATE wire transfer
instructions to State Street:
NAME TITLE (Specify whether SPECIMEN SIGNATURE
position is with Fund
or Investment Adviser)
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
Authorized Verifiers
Please Type or Print
Please provide a listing of Fund officers or other individuals 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)
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
_____________________ __________________________ ___________________
44
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS
Country Subcustodian
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen
Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Benin via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Canada State Street Trust Company Canada
Chile BankBoston, N.A.
People's Republic Hongkong and Shanghai Banking Corporation
of China Limited, Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad
Fiduciaria
Costa Rica Banco BCT S.A.
45
Croatia Privredna Banka Zagreb d.d
Cyprus The Cyprus Popular Bank Ltd.
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt HSBC Bank Egypt S.A.E.
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Estonia Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Hong Kong Standard Chartered Bank
Hungary HVB Bank Hungary Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
Hongkong and Shanghai Banking Corporation
Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Ivory Coast Societe Generale de Banques en Cote
d'Ivoire
46
Jamaica Scotiabank Jamaica Trust and Merchant
Bank Ltd.
Japan The Fuji Bank, Limited
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Hongkong and Shanghai Banking Corporation
Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Mauritius Hongkong and Shanghai Banking Corporation
Limited
Mexico Banco Nacional de Mexico S.A.
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited
Netherlands Fortis Bank (Nederland) N.V.
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Nigeria Stanbic Merchant Bank Nigeria Limited
47
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO - Moscow
(as delegate of Credit Suisse First
Boston - Zurich)
Senegal via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Singapore The Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Slovenia Bank Austria Creditanstalt d.d. -
Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka Hongkong and Shanghai Banking Corporation
Limited
Swaziland Standard Bank Swaziland Limited
48
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Togo via Societe Generale de Banques en Cote
d'Ivoire, Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai
Banking Corporation Limited)
United Kingdom State Street Bank and Trust Company,
London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai
Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
49
SCHEDULE B
STATE STREET
GLOBAL CUSTODY
NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
Country Depositories
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and Transfer
System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depots et
de Virements de Titres, S.A.
Banque Nationale de Belgique
Benin Depositaire Central Banque de Reglement
Brazil Companhia Brasileira de Liquidacao e
Custodia
Sistema Especial de Liquidacao e de
Custodia (SELIC)
Central de Custodia e de Liquidacao
Financeira de Titulos Privados (CETIP)
Bulgaria Central Depository AD
Bulgarian National Bank
Burkina Faso Depositaire Central Banque de Reglement
Canada Canadian Depository for Securities
Limited
Chile Deposito Central de Valores X.X.
Xxxxxxx Republic China Securities Depository and Clearing
of China Corporation Limited Shanghai Branch
50
China Securities Depository and Clearing
Corporation Limited Shenzhen Branch
Colombia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredinja Depozitarna Agencija d.d.
Czech Republic Stredisko cennch papiru Ceska republika
Czech National Bank
Denmark Verdipapircentralen (Danish Securities
Center)
Egypt Misr for Clearing, Settlement, and
Depository S.A.E.
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Apothetirion Titlon AE - Central
Securities Depository
Guinea-Bissau Depositaire Central Banque de Reglement
Hong Kong Hong Kong Securities Clearing Company
Limited
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
Iceland Iceland Securities Depository Limited
India National Securities Depository Limited
51
Central Depository Services India Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House
Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Japan Securities Depository Center
(JASDEC)
Bank of Japan
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of
Financial Instruments for Lebanon and the
Middle East (Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of
Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia
Mali Depositaire Central Banque de Reglement
Mauritius Central Depository and Settlement Co.
Ltd.
Bank of Mauritius
Mexico S.D. Indeval, S.A. de C.V.
52
Morocco Maroclear
Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
New Zealand New Zealand Central Securities Depository
Limited
Niger Depositaire Central Banque de Reglement
Nigeria Central Securities Clearing System
Limited
Norway Verdipapirsentralen (Norwegian Central
Securities Depository)
Oman Muscat Depository & Securities
Registration Company, SAOC
Pakistan Central Depository Company of Pakistan
Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a
department of the Palestine Stock
Exchange
Peru Caja de Valores y Liquidaciones,
Institucion de
Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX)
of the Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych
SA)
Central Treasury Bills Registrar
Portugal INTERBOLSA Sociedade Gestora de Sistemas
de Liquidacao e de
Sistemas Centralizados de Valores
Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR),
a department of the Doha Securities
Market
53
Romania National Securities Clearing, Settlement
and Depository Company
Bucharest Stock Exchange Registry
Division
National Bank of Romania
Russia Vneshtorgbank, Bank for Foreign Trade of
the Russian Federation
Senegal Depositaire Central Banque de Reglement
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko cennch papierov SR, a.s.
National Bank of Slovakia
Slovenia KDD-Centralna klirinsko depotna xxxxxx
x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic
(STRATE) Ltd.
Spain Servicio de Compensacion y Liquidacion de
Valores, S.A.
Banco de Espana, Central de Anotaciones
en Cuenta
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Co.,
Ltd.
Thailand Thailand Securities Depository Company
Limited
Togo Depositaire Central Banque de Reglement
54
Tunisia Societe Tunisienne Interprofessionelle
pour la Compensation et de Depots des
Valeurs Mobilieres
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
Mizhregionalny Fondovy Souz
United Arab Emirates Clearing and Depository System, a
department of theDubai Financial Market
Venezuela Banco Central de Venezuela
Zambia XxXX Central Shares Depository Limited
Bank of Zambia
TRANSNATIONAL
Euroclear
Clearstream Banking AG
55
SCHEDULE C
MARKET INFORMATION
Publication/Type of Information Brief Description
(scheduled frequency)
The Guide to Custody in
World Markets
(hardcopy annually and
regular website updates) An overview of settlement and
safekeeping procedures,
custody practices and foreign
investor considerations for
the markets in which State
Street offers custodial
services.
Global Custody Network
Review (annually) Information relating to
Foreign Sub-Custodians in
State Street's Global Custody
Network. The Review stands as
an integral part of the
materials that State Street
provides to its U.S. mutual
fund clients to assist them in
complying with SEC Rule 17f-5.
The Review also gives insight
into State Street's market
expansion and Foreign Sub-
Custodian selection processes,
as well as the procedures and
controls used to monitor the
financial condition and
performance of our Foreign
Sub-Custodian banks.
Securities Depository
Review (annually) Custody risk analyses of the
Foreign Securities
Depositories presently
operating in Network markets.
This publication is an
integral part of the materials
that State Street provides to
its U.S. mutual fund clients
to meet informational
obligations created by SEC
Rule 17f-7.
56
Global Legal Survey
(annually) With respect to each market in
which State Street offers
custodial services, opinions
relating to whether local law
restricts (i) access of a
fund's independent public
accountants to books and
records of a Foreign Sub-
Custodian or Foreign
Securities System, (ii) a
fund's ability to recover in
the event of bankruptcy or
insolvency of a Foreign Sub-
Custodian or Foreign
Securities System, (iii) a
fund's ability to recover in
the event of a loss by a
Foreign Sub-Custodian or
Foreign Securities System, and
(iv) the ability of a foreign
investor to convert cash and
cash equivalents to U.S.
dollars.
Subcustodian Agreements Copies of the contracts that
(annually) State Street has entered into
with each Foreign Sub-
Custodian that maintains U.S.
mutual fund assets in the
markets in which State Street
offers custodial services.
Global Market Bulletin
(daily or as necessary) Information on changing
settlement and custody
conditions in markets where
State Street offers custodial
services. Includes changes in
market and tax regulations,
depository developments,
dematerialization information,
as well as other market
changes that may impact State
Street's clients.
Foreign Custody Advisories For those markets where State
(as necessary) Street offers custodial
services that exhibit special
risks or infrastructures
impacting custody, Xxxxx
00
Xxxxxx issues market
advisories to highlight those
unique market factors which
might impact our ability to
offer recognized custody
service levels.
Material Change Notices
(presently on a quarterly
basis or as otherwise
necessary) Informational letters and
accompanying materials
confirming State Street's
foreign custody arrangements,
including a summary of
material changes with Foreign
Sub-Custodians that have
occurred during the previous
quarter. The notices also
identify any material changes
in the custodial risks
associated with maintaining
assets with Foreign Securities
Depositories.
58
00250209.AO2
