CUSTODY AGREEMENT
THIS AGREEMENT is made effective the ___ day of __________, 2000, by and
between STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the
laws of the Commonwealth of Massachusetts, having its trust office located at
000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street"), and FREMONT
MUTUAL FUNDS, INC., a Maryland corporation, having its principal office and
place of business at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint State Street as custodian of the assets of
the Fund's investment portfolio or portfolios (each a "Portfolio", and
collectively the "Portfolios"); and
WHEREAS, State Street is willing to accept such appointment on the terms
and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and appoints
State Street as custodian of the investment securities, interests in loans
and other non-cash investment property, and monies at any time owned by
each of the Portfolios and delivered to State Street as custodian hereunder
("Assets").
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to State Street:
1. That it is a corporation duly organized and existing and in good
standing under the laws of its state of organization, and that it
is registered under the 1940 Act; and
2. That it has the requisite power and authority under applicable
law, its articles of incorporation and its bylaws to enter into
this Agreement; that it has taken all requisite action necessary
to appoint State Street as custodian for the Portfolios; that
this Agreement has been duly executed and delivered by Fund; and
that this Agreement constitutes a legal, valid and binding
obligation of Fund, enforceable in accordance with its terms.
B. State Street hereby represents, warrants and acknowledges to Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of
Massachusetts; and
2. That it has the requisite power and authority under applicable
law, its charter and its bylaws to enter into and perform this
Agreement; that this Agreement has been duly executed and
delivered by State Street; and that this Agreement constitutes a
legal, valid and binding obligation of State Street, enforceable
in accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. DELIVERY OF ASSETS. Except as permitted by the 1940 Act, Fund will
deliver or cause to be delivered to State Street on the effective date
hereof, or as soon thereafter as practicable, and from time to time
thereafter, all Assets acquired by, owned by or from time to time
coming into the possession of each of the Portfolios during the term
hereof. State Street has no responsibility or liability whatsoever for
or on account of assets not so delivered.
B. DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or cause to be
turned over to State Street all of each Portfolio's relevant accounts
and records needed by State Street to fully and properly perform its
duties and responsibilities hereunder. State Street may rely
conclusively on the completeness and correctness of such accounts and
records.
C. DELIVERY OF ASSETS TO THIRD PARTIES. State Street will receive
delivery of and keep safely the Assets of each Portfolio segregated in
a separate account. State Street will not deliver, assign, pledge or
hypothecate any such Assets to any person except as permitted by the
provisions hereof or any agreement executed according to the terms of
Section 3.P hereof. Upon delivery of any such Assets to a subcustodian
appointed pursuant hereto (hereinafter referred to as "Subcustodian"),
State Street will create and maintain records identifying such Assets
as belonging to the applicable Portfolio. State Street is responsible
for the safekeeping of the Assets only until they have been
transmitted to and received by other persons as permitted under the
terms hereof, except for Assets transmitted to Subcustodians, for
which State Street remains responsible to the extent provided herein.
State Street may participate directly or indirectly through a
subcustodian in the Depository Trust Company (DTC), Treasury/Federal
Reserve Book Entry System (Fed System), Participant Trust Company
(PTC) or other depository approved by Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)) (each a "Depository" and
collectively the "Depositories"). State Street will be responsible to
Fund for any loss, damage or expense suffered or incurred by Fund
resulting from the actions or omissions of any Depository only to the
same extent such Depository is responsible to State Street.
E. REGISTRATION. State Street will at all times hold registered Assets in
the name of State Street as custodian, the applicable Portfolio, or a
nominee of either of them, unless specifically directed by
Instructions, as hereinafter defined, to hold such registered Assets
in so-called "street name;" provided that, in any event, State Street
will hold all such Assets in an account of State Street as custodian
containing only Assets of the applicable Portfolio, or only assets
held by State Street as a fiduciary or custodian for customers; and
provided further, that State Street's records at all times will
indicate the Portfolio or other customer for which such Assets are
held and the
respective interests therein. If, however, Fund directs State Street
to maintain Assets in "street name", notwithstanding anything
contained herein to the contrary, State Street will be obligated only
to utilize its best efforts to timely collect income due the Portfolio
on such Assets and to notify the Portfolio of relevant information,
such as maturities and pendency of calls, and corporate actions
including, without limitation, calls for redemption, tender or
exchange offers, declaration, record and payment dates and amounts of
any dividends or income, reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, or conversion
("Corporate Actions"). All Assets and the ownership thereof by
Portfolio will at all times be identifiable on the records of State
Street. Fund agrees to hold State Street and its nominee harmless for
any liability as a shareholder of record of securities held in
custody.
F. EXCHANGE. Upon receipt of Instructions, State Street will exchange, or
cause to be exchanged, Assets held for the account of a Portfolio for
other Assets issued or paid in connection with any Corporate Action or
otherwise, and will deposit any such Assets in accordance with the
terms of any such Corporate Action. Without Instructions, State Street
is authorized to exchange Assets in temporary form for Assets in
definitive form, to effect an exchange of shares when the par value of
stock is changed, and, upon receiving payment therefor, to surrender
bonds or other Assets at maturity or when advised of earlier call for
redemption, except that State Street will receive Instruction prior to
surrendering any convertible security.
G. PURCHASES OF INVESTMENTS -- OTHER THAN OPTIONS AND FUTURES. On each
business day on which a Portfolio makes a purchase of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer through
whom the purchase was made; and
9. Whether the Asset is to be received in certificated form or via a
specified Depository.
In accordance with such Instructions, State Street will pay for out of
monies held for the purchasing Portfolio, but only insofar as such
monies are available for such purpose, and receive the Assets so
purchased by or for the account of such Portfolio, except that State
Street, or a Subcustodian, may in its sole discretion advance funds to
such Portfolio which may result in an overdraft because the monies
held on behalf of such Portfolio are insufficient to pay the total
amount payable upon such purchase. Except as otherwise instructed by
Fund, State Street will make such payment only upon receipt of Assets:
(a) by State Street; (b) by a clearing corporation of a national
exchange of which State Street is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) State Street may release funds to a
Depository prior to the receipt of advice from the Depository that the
Assets underlying a repurchase agreement have been transferred by
book-entry into the account maintained with such Depository by State
Street on behalf of its customers; provided that State Street's
instructions to the Depository require that the Depository make
payment of such funds only upon transfer by book-entry of the Assets
underlying the repurchase agreement in such account; (ii) State Street
may make payment for time deposits, call account deposits, currency
deposits and other deposits, foreign exchange transactions, futures
contracts or options, before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; and (iii)
State Street may make, or cause a Subcustodian to make, payment for
the purchase of Assets the settlement of which occurs outside of the
United States of America in accordance with generally accepted local
custom and market practice.
H. SALES AND DELIVERIES OF INVESTMENTS -- OTHER THAN OPTIONS AND FUTURES.
On each business day on which a Portfolio makes a sale of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by the Portfolio upon such sale;
and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
State Street will deliver or cause to be delivered the Assets thus
designated as sold for the account of the selling Portfolio as
specified in the Instructions. Except as otherwise instructed by Fund,
State Street will make such delivery upon receipt of: (a) payment
therefor in such form as is satisfactory to State Street; (b) credit
to the account of State Street with a clearing corporation of a
national securities exchange of which State Street is a member; or (c)
credit to the account maintained by State Street on behalf of its
customers with a Depository. Notwithstanding the foregoing:
(i) State Street will deliver Assets held in physical form in
accordance with "street delivery custom" to a broker or its clearing
agent; or (ii) State Street may make, or cause a Subcustodian to make,
delivery of Assets the settlement of which occurs outside of the
United States of America upon payment therefor in accordance with
generally accepted local custom and market practice.
I. PURCHASES OR SALES OF OPTIONS AND FUTURES. On each business day on
which a Portfolio makes a purchase or sale of the options and/or
futures listed below, Fund will deliver to State Street Instructions
specifying with respect to each such purchase or sale:
1. If applicable, the name of the Portfolio making such purchase or
sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
Instructions, and if not already in the possession of State
Street, Fund will deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement, incorporated herein by this reference); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
J. ASSETS PLEDGED OR LOANED. If specifically allowed for in the
prospectus of a Portfolio, and subject to such additional terms and
conditions as State Street may require:
1. Upon receipt of Instructions, State Street will release or cause
to be released Assets to the designated pledgee by way of pledge
or hypothecation to secure any loan incurred by a Portfolio;
provided, however, that State Street will release Assets only
upon payment to State Street of the monies borrowed, except that
in cases where additional collateral is required to secure a
borrowing already made, further Assets may be released or caused
to be released for that purpose. Upon receipt of Instructions,
State Street will pay, but only from funds available for such
purpose, any such loan upon redelivery to it of the Assets
pledged or hypothecated therefor and upon surrender of the note
or notes evidencing such loan.
2. Upon receipt of Instructions, State Street will release Assets to
the designated borrower; provided, however, that the Assets will
be released only upon deposit with State Street of full cash
collateral as specified in such Instructions, and that the
lending Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets. Upon receipt of
Instructions and the loaned Assets, State Street will release the
cash collateral to the borrower.
K. ROUTINE MATTERS. State Street will, in general, attend to all routine
and mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with the Assets
except as may be otherwise provided herein or upon Instruction from
Fund.
L. DEPOSIT ACCOUNTS. State Street will open and maintain one or more
special purpose deposit accounts for each Portfolio in the name of
State Street in such banks or trust companies (including, without
limitation, affiliates of State Street) as may be designated by it or
Fund in writing ("Accounts"), subject only to draft or order by State
Street upon receipt of Instructions. State Street will deposit all
monies received by State Street from or for the account of a Portfolio
in an Account maintained for such Portfolio. Subject to Section 5.J
hereof, State Street agrees:
1. To make Fed Funds available to the applicable Portfolio at 9:00
a.m., Kansas City time, on the second business day after deposit
of any check into an Account, in the amount of the check;
2. To make funds available immediately upon a deposit made by
Federal Reserve wire; and
3. To make funds available on the next business day after deposit of
ACH wires.
M. INCOME AND OTHER PAYMENTS. State Street will:
1. Collect, claim and receive and deposit for the account of the
applicable Portfolio all income (including income from the
Accounts) and other payments which become due and payable on or
after the effective date hereof with respect to the Assets, and
credit the account of such Portfolio in accordance with the
schedule attached hereto as Exhibit A. If, for any reason, a
Portfolio is credited with income that is not subsequently
collected, State Street may reverse that credited amount. If
monies are collected after such reversal, State Street will
credit the Portfolio in that amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with (a) the collection, receipt and deposit of such
income and other payments, including but not limited to the
presentation for payment of all coupons and other income items
requiring presentation; and all other Assets which may mature or
be called, redeemed, retired or otherwise become payable and
regarding which State Street has actual knowledge, or should
reasonably be expected to have knowledge; and (b) the endorsement
for collection, in the name of Fund or a Portfolio, of all
checks, drafts or other negotiable instruments.
State Street, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of Instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. State Street
will receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to Instructions.
N. PROXIES AND NOTICES. State Street will promptly deliver or mail (or
have delivered or mailed) to Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices, requests
or announcements affecting or relating to Assets and will, upon
receipt of Instructions, execute and deliver or mail (or cause its
nominee to execute and deliver or mail) such proxies or other
authorizations as may be required. Except as provided herein or
pursuant to Instructions hereafter received by State Street, neither
it nor its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of such
Assets, or give any consent, approval or waiver with respect thereto,
or take any other similar action.
O. DISBURSEMENTS. State Street will pay or cause to be paid, insofar as
funds are available for the purpose, bills, statements and other
obligations of each Portfolio (including but not limited to
obligations in connection with the conversion, exchange or surrender
of Assets, interest charges, dividend disbursements, taxes, management
fees, custodian fees, legal fees, auditors' fees, transfer agents'
fees, brokerage commissions, compensation to personnel, and other
operating expenses of such Portfolio) pursuant to Instructions setting
forth the name of the person to whom payment is to be made, and the
amount and purpose of the payment.
P. DAILY STATEMENT OF ACCOUNTS. State Street will, within a reasonable
time, render to Fund a detailed statement of the amounts received or
paid and of Assets received or delivered for the account of each
Portfolio during each business day. State Street will maintain such
books and records as are necessary to enable it to render, from time
to time upon request by Fund, a detailed statement of the Assets.
State Street will permit, and upon Instruction will cause any
Subcustodian to permit, such persons as are authorized by Fund,
including Fund's independent public accountants, reasonable access to
such records or will provide reasonable confirmation of the contents
of such records, and if demanded, State Street will permit, and will
cause any Subcustodian to permit, federal and state regulatory
agencies to examine the Assets, books and records of the Portfolios.
Q. APPOINTMENT OF SUBCUSTODIANS. Notwithstanding any other provisions
hereof:
1. All or any of the Assets may be held in State Street's own
custody or in the custody of one or more other banks or trust
companies (including, without limitation, affiliates of State
Street) acting as Subcustodians as may be selected by State
Street. Any such Subcustodian selected by State Street must have
the qualifications required for a custodian under the 0000 Xxx.
Xxxxx Xxxxxx will be responsible to the applicable Portfolio for
any loss, damage or expense suffered or incurred by such
Portfolio resulting from the actions or omissions of any
Subcustodians selected and appointed by State Street (except
Subcustodians appointed at the request of Fund and as provided in
Subsection 2 below) to the same extent State Street would be
responsible to Fund hereunder if it committed the act or omission
itself.
2. Upon request of Fund, State Street will contract with other
Subcustodians reasonably acceptable to State Street for purposes
of (a) effecting third-party
repurchase transactions with banks, brokers, dealers, or other
entities through the use of a common custodian or subcustodian,
or (b) providing depository and clearing agency services with
respect to certain variable rate demand note securities, or (c)
for other reasonable purposes specified by Fund; provided,
however, that State Street will be responsible to Fund for any
loss, damage or expense suffered or incurred by Fund resulting
from the actions or omissions of any such Subcustodian only to
the same extent such Subcustodian is responsible to State Street.
Fund may review State Street's contracts with such Subcustodians.
Q. FOREIGN CUSTODY MANAGER.
1. DELEGATION TO STATE STREET AS FCM. The Fund, pursuant to
resolution adopted by its Board of Trustees or Directors (the
"Board"), hereby delegates to State Street, subject to Section
(b) of Rule 17f-5, the responsibilities set forth in this Section
Q with respect to Foreign Assets held outside the United States,
and State Street hereby accepts such delegation, as Foreign
Custody Manager ("FCM") of each Portfolio.
2. DEFINITIONS. Capitalized terms in this Section Q have the
following 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
financial institutions such as any Mandatory Securities
Depositories 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, except that the term does not include
Mandatory Securities Depositories.
"Foreign Assets" means any of the Portfolios' investments
(including foreign currencies) for which the primary market is
outside the United States and such cash and cash equivalents in
amounts deemed by Fund to be reasonably necessary to effect the
Portfolios' transactions in such investments.
"Foreign Custody Manager" or "FCM" has the meaning set forth in
section (a)(2) of Rule 17f-5.
"Mandatory Securities Depository" means a foreign securities
depository or clearing agency that, either as a legal or
practical matter, must be used if the Fund determines to place
Foreign Assets in a country outside the United States (i) because
required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing
agency; or (iii) because maintaining or effecting trades in
securities outside the foreign
securities depository or clearing agency is not consistent with
prevailing or developing custodial or market practices.
3. COUNTRIES COVERED. The FCM is responsible for performing the
delegated responsibilities defined below only with respect to the
countries and custody arrangements for each such country listed
on Exhibit C hereto , which may be amended from time to time by
the FCM. The FCM will list on Exhibit C the Eligible Foreign
Custodians selected by the FCM to maintain the assets of each
Portfolio. Mandatory Securities Depositories are listed on
Exhibit D hereto, which Exhibit D may be amended from time to
time by the FCM. The FCM will provide amended versions of
Exhibits C and D in accordance with subsection 7 of this Section
Q.
Upon the receipt by the FCM of Instructions to open an account,
or to place or maintain Foreign Assets in a country listed on
Exhibit C, and the fulfillment by the Fund of the applicable
account opening requirements for such country, the FCM is deemed
to have been delegated by the Board responsibility as FCM with
respect to that country and to have accepted such delegation.
Following the receipt of Instructions directing the FCM to close
the account of a Portfolio with the Eligible Foreign Custodian
selected by the FCM in a designated country, the delegation by
the Board to State Street as FCM for that country is deemed to
have been withdrawn and State Street will immediately cease to be
the FCM of the Portfolio with respect to that country.
The FCM may withdraw its acceptance of delegated responsibilities
with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties
agree in writing) after receipt of any such notice by the Fund,
State Street will have no further responsibility as FCM to a
Portfolio with respect to the country as to which State Street's
acceptance of delegation is withdrawn.
4. SCOPE OF DELEGATED RESPONSIBILITIES.
a. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Section Q, the FCM may place and maintain
the Foreign Assets in the care of the Eligible Foreign
Custodian selected by the FCM in each country listed on
Exhibit C, as amended from time to time.
In performing its delegated responsibilities as FCM to place
or maintain Foreign Assets with an Eligible Foreign
Custodian, the FCM will 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, those set forth
in Rule 17f-5(c)(1)(I) through (iv).
b. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The FCM will
determine that the contract (or the rules or established
practices or procedures in the case of an Eligible Foreign
Custodian that is a foreign securities depository or
clearing agency) governing the foreign custody arrangements
with each Eligible Foreign Custodian selected by the FCM
will provide reasonable care for the Foreign Assets held by
that Eligible Foreign Custodian based on the standards
applicable to custodians in the particular country. Each
such contract will include the provisions set forth in Rule
17f-5(c)(2)(I)(A) through (F), or, in lieu of any or all of
the provisions set forth in said (A) through (F), such other
provisions that the FCM determines will provide, in their
entirety, the same or greater level of care and protection
for the Foreign Assets as the provisions set forth in said
(A) through (F) in their entirety.
c. MONITORING. In each case in which the FCM maintains Foreign
Assets with an Eligible Foreign Custodian selected by the
FCM, the FCM will establish a system to monitor (a) the
appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (b) the contract governing
the custody arrangements established by the FCM with the
Eligible Foreign Custodian. In the event the FCM determines
that the custody arrangements with an Eligible Foreign
Custodian it has selected are no longer appropriate, the FCM
will notify the Board in accordance with subsection 7 of
this Section Q.
5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section Q, the Board will be solely responsible for
considering and determining to accept such Country Risk, or for
delegating that responsibility to the investment advisor for the
Portfolio, as is incurred by placing and maintaining the Foreign
Assets in each country for which State Street is serving as FCM
of a Portfolio, and the Board will be solely responsible for
monitoring on a continuing basis such Country Risk not otherwise
delegated to the advisor and to the extent that the Board
considers necessary or appropriate. The Fund, on behalf of the
Portfolios, and State Street each expressly acknowledge that the
FCM will not be delegated any responsibilities under this Section
Q with respect to Mandatory Securities Depositories.
6. STANDARD OF CARE AS FCM OF A PORTFOLIO. In performing the
responsibilities delegated to it, the FCM 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.
7. REPORTING REQUIREMENTS. The FCM will 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 amended Exhibits C and D at
the end of the calendar quarter in which an amendment to either
Schedule has occurred. The FCM will make written reports
notifying the Board of any other material change in the foreign
custody arrangements of a Portfolio described in this Section Q
after the occurrence of the material change.
8. REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The FCM 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 State Street that the Board has determined
that it is reasonable for the Board to rely on State Street to
perform the responsibilities delegated pursuant to this Agreement
to State Street as the FCM of each Portfolio.
9. EFFECTIVE DATE AND TERMINATION OF STATE STREET AS FCM. The
Board's delegation to State Street as FCM of a Portfolio will be
effective as of the date hereof and will 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 thirty days after receipt by the
non-terminating party of such notice. The provisions of
subsection 3 of this Section Q govern the delegation to and
termination of State Street as FCM of the Fund with respect to
designated countries.
R. ACCOUNTS AND RECORDS PROPERTY OF FUND. State Street acknowledges that
all of the accounts and records maintained by State Street pursuant
hereto are the property of Fund, and will be made available to Fund
for inspection or reproduction within a reasonable period of time,
upon demand. State Street will assist Fund's independent auditors, or
upon approval of Fund, or upon demand, any regulatory body, in any
requested review of Fund's accounts and records but Fund will
reimburse State Street for all expenses and employee time invested in
any such review outside of routine and normal periodic reviews. Upon
receipt from Fund of the necessary information or instructions, State
Street will supply information from the books and records it maintains
for Fund that Fund needs for tax returns, questionnaires, periodic
reports
to shareholders and such other reports and information requests as
Fund and State Street agree upon from time to time.
S. ADOPTION OF PROCEDURES. State Street and Fund hereby adopt the Funds
Transfer Operating Guidelines attached hereto as Exhibit B. State
Street and Fund may from time to time adopt such additional procedures
as they agree upon, and State Street may conclusively assume that no
procedure approved or directed by Fund, Fund's or Portfolio's
accountants or other advisors conflicts with or violates any
requirements of the prospectus, articles of incorporation, bylaws, any
applicable law, rule or regulation, or any order, decree or agreement
by which Fund may be bound. Fund will be responsible for notifying
State Street of any changes in statutes, regulations, rules,
requirements or policies which might necessitate changes in State
Street's responsibilities or procedures.
T. ADVANCES. Fund will pay on demand any advance of cash or securities
made by State Street or any Subcustodian, in its sole discretion, for
any purpose (including but not limited to securities settlements,
purchase or sale of foreign exchange or foreign exchange contracts and
assumed settlement) for the benefit of any Portfolio. Any such cash
advance will be subject to an overdraft charge at the rate set forth
in the then-current fee schedule from the date advanced until the date
repaid. As security for each such advance, Fund hereby grants State
Street and such Subcustodian a lien on and security interest in all
Assets at any time held for the account of the applicable Portfolio,
including without limitation all Assets acquired with the amount
advanced. Should Fund fail to promptly repay the advance, State Street
and such Subcustodian may utilize available cash and to dispose of
such Portfolio's Assets pursuant to applicable law to the extent
necessary to obtain reimbursement of the amount advanced and any
related overdraft charges.
U. EXERCISE OF RIGHTS; TENDER OFFERS. Upon receipt of Instructions, State
Street will: (1) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that
the new Assets, if any, are to be delivered to State Street; and (2)
deposit securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be paid or delivered to
State Street or the tendered securities are to be returned to State
Street.
V. FUND SHARES.
1. Fund will deliver to State Street Instructions with respect to
the declaration and payment of any dividend or other distribution
on the shares of capital stock of a Portfolio ("Fund Shares") by
a Portfolio. On the date specified in such Instruction, State
Street will pay out of the monies held for the account of the
Portfolio, insofar as it is available for such purposes, and
credit to the account of the Dividend Disbursing Agent for the
Portfolio, the amount specified in such Instructions.
2. Whenever Fund Shares are repurchased or redeemed by a Portfolio,
Portfolio or its agent will give State Street Instructions
regarding the aggregate dollar amount to be paid for such shares.
Upon receipt of such Instruction, State Street will charge such
aggregate dollar amount to the account of the Portfolio and
either deposit the same in the account maintained for the purpose
of paying for the repurchase or redemption of Fund Shares or
deliver the same in accordance with such Instruction. State
Street has no duty or responsibility to determine that Fund
Shares have been removed from the proper shareholder accounts or
that the proper number of Fund Shares have been canceled and
removed from the shareholder records.
3. Whenever Fund Shares are purchased from Fund, Fund will deposit
or cause to be deposited with State Street the amount received
for such shares. State Street has no duty or responsibility to
determine that Fund Shares purchased from Fund have been added to
the proper shareholder account or that the proper number of such
shares have been added to the shareholder records.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which State Street reasonably believes were given by a
designated representative of Fund. Fund will deliver to State Street,
prior to delivery of any Assets to State Street and thereafter from
time to time as changes therein are necessary, written Instructions
naming one or more designated representatives to give Instructions in
the name and on behalf of Fund, which Instructions may be received and
accepted by State Street as conclusive evidence of the authority of
any designated representative to act for Fund and may be considered to
be in full force and effect until receipt by State Street of notice to
the contrary. Unless such written Instructions delegating authority to
any person to give Instructions specifically limit such authority to
specific matters or require that the approval of anyone else will
first have been obtained, State Street will be under no obligation to
inquire into the right of such person, acting alone, to give any
Instructions whatsoever. If Fund fails to provide State Street any
such Instructions naming designated representatives, any Instructions
received by State Street from a person reasonably believed to be an
appropriate representative of Fund will constitute valid and proper
Instructions hereunder. "Designated representatives" may include
Fund's or a Portfolio's employees and agents, including investment
managers and their employees.
B. No later than the next business day immediately following each oral
Instruction, Fund will send State Street written confirmation of such
oral Instruction. At State Street's sole discretion, State Street may
record on tape, or otherwise, any oral Instruction whether given in
person or via telephone, each such recording identifying the date and
the time of the beginning and ending of such oral Instruction.
C. Fund will provide, upon State Street's request a certificate signed by
an officer or designated representative of Fund, as conclusive proof
of any fact or matter required to be ascertained from Fund hereunder.
Fund will also provide State Street Instructions with respect to any
matter concerning this Agreement requested by State Street. If State
Street reasonably believes that it could not prudently act according
to the Instructions, or the instruction or advice of Fund's or a
Portfolio's accountants or counsel, it may in its discretion, with
notice to Fund, not act according to such Instructions.
5. LIMITATION OF LIABILITY OF STATE STREET. State Street is not responsible or
liable for, and Fund will indemnify and hold State Street harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel
fees, payments and liabilities which may be asserted against or incurred by
State Street or for which State Street may be held to be liable, arising
out of or attributable to:
A. State Street's action or omission to act pursuant hereto; provided
that State Street has acted in good faith and with due diligence and
reasonable care; and provided further, that State Street is not liable
for consequential, special, or punitive damages in any event.
B. State Street's payment of money as requested by Fund, or the taking of
any action which might make it or its nominee liable for payment of
monies or in any other way; provided, however, that nothing herein
obligates State Street to take any such action or expend its own
monies except in its sole discretion.
C. State Street's action or omission to act hereunder upon any
Instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
properly executed, including any Instructions, communications, data or
other information received by State Street by means of the Systems, as
hereinafter defined, or any electronic system of communication.
D. State Street's action or omission to act in good faith reliance on the
advice or opinion of counsel for Fund or of its own counsel with
respect to questions or matters of law, which advice or opinion may be
obtained by State Street at the expense of Fund, or on the
Instructions, advice or statements of any officer or employee of Fund,
or Fund's accountants or other authorized individuals, and other
persons believed by it in good faith to be expert in matters upon
which they are consulted.
E. The purchase or sale of any securities or foreign currency positions.
Without limiting the generality of the foregoing, State Street is
under no duty or obligation to inquire into:
1. The validity of the issue of any securities purchased by or for
any Portfolio, or the legality of the purchase thereof or of
foreign currency positions, or evidence of ownership required by
Fund to be received by State Street, or the propriety of the
decision to purchase or the amount paid therefor;
2. The legality of the sale of any securities or foreign currency
positions by or for any Portfolio, or the propriety of the amount
for which the same are sold; or
3. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor, the legality
of the repurchase or redemption of any Fund Shares, or the
propriety of the amount to be paid therefor, or the legality of
the declaration of any dividend by Fund, or the legality of the
issue of any Fund Shares in payment of any stock dividend.
F. Any error, omission, inaccuracy or other deficiency in any Portfolio's
accounts and records or other information provided by or on behalf of
a Portfolio to State Street, or the failure of Fund to provide, or
provide in a timely manner, any accounts, records, or information
needed by State Street to perform hereunder.
G. Fund's refusal or failure to comply with the terms hereof (including
without limitation Fund's failure to pay or reimburse State Street
under Section 5 hereof), Fund's negligence or willful misconduct, or
the failure of any representation or warranty of Fund hereunder to be
and remain true and correct in all respects at all times.
H. The use or misuse, whether authorized or unauthorized, of the Systems
or any electronic system of communication used hereunder, by Fund or
by any person who acquires access to the Systems or such other systems
through the terminal device, passwords, access instructions or other
means of access to such Systems or such other system which are
utilized by, assigned to or otherwise made available to Fund, except
to the extent attributable to any negligence or willful misconduct by
State Street.
I. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the payment
of money to be received by State Street on behalf of a Portfolio until
actually received; provided, however, that State Street will advise
Fund promptly if it fails to receive any such money in the ordinary
course of business and will cooperate with Fund toward the end that
such money is received.
J. Except as provided in Section 3.P hereof, loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company,
or any other person with whom State Street may deal.
K. The failure or delay in performance of its obligations hereunder, or
those of any entity for which it is responsible hereunder, arising out
of or caused, directly or indirectly, by circumstances beyond the
affected entity's reasonable control, including, without limitation:
any interruption, loss or malfunction of any utility, transportation,
computer (hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, Fund will pay to
State Street the compensation set forth in a separate fee schedule,
incorporated herein by this reference, to be agreed to by Fund and State
Street from time to time, and reimbursement for State Street's cash
disbursements and reasonable out-of-pocket costs and expenses, including
attorney's fees, incurred by State Street in connection with the
performance of services hereunder, on demand. State Street may charge such
compensation against monies held by it for the account of the Portfolios.
State Street will also be entitled to charge against any monies held by it
for the account of the Portfolios the amount of any loss, damage,
liability, advance, overdraft or expense for which it is entitled to
reimbursement from Fund, including but not limited to fees and expenses due
to State Street for other services provided to Fund by State Street. State
Street will be entitled to reimbursement by Fund for the losses, damages,
liabilities, advances, overdrafts and expenses of Subcustodians only to the
extent that (a) State Street would have been entitled to reimbursement
hereunder if it had incurred the same itself directly, and (b) State Street
is obligated to reimburse the Subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement is for a period of
two (2) years. Thereafter, Fund or State Street may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other party
and received not less than ninety (90) days prior to the date upon which
such termination will take effect. Upon termination hereof:
A. Fund will pay State Street its fees and compensation due hereunder and
its reimbursable disbursements, costs and expenses paid or incurred to
such date;
B. Fund will designate a successor custodian by Instruction to State
Street by the termination date. In the event no such Instruction has
been delivered to State Street on or before the date when such
termination becomes effective, then State Street may, at its option,
(i) choose as successor custodian a bank or trust company meeting the
qualifications for custodian set forth in the 1940 Act and having not
less than Two Million Dollars ($2,000,000) aggregate capital, surplus
and undivided profits, as shown by its last published report, or (ii)
apply to a court of competent jurisdiction for the appointment of a
successor or other proper relief, or take any other lawful action
under the circumstances; provided, however, that Fund will reimburse
State Street for its costs and expenses, including reasonable
attorney's fees, incurred in connection therewith; and
C. State Street will, upon payment of all sums due to State Street from
Fund hereunder or otherwise, deliver all Assets, duly endorsed and in
form for transfer, to the successor custodian, or as specified by the
court, at State Street's office. State Street will co-operate in
effecting changes in book-entries at all Depositories. Upon delivery
to a successor or as specified by the court, State Street will have no
further
obligations or liabilities hereunder. Thereafter such successor will
be the successor hereunder and will be entitled to reasonable
compensation for its services.
In the event that Assets remain in the possession of State Street after the
date of termination hereof for any reason other than State Street's failure
to deliver the same, State Street is entitled to compensation as provided
in the then-current fee schedule for its services during such period, and
the provisions hereof relating to the duties and obligations of State
Street will remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at the address set forth above, or at such other address as Fund may
have designated to State Street in writing, will be deemed to have been
properly given to Fund hereunder. Notices, requests, Instructions and other
writings addressed to State Street at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, Attention: Custody Department, or to such other address as
it may have designated to Fund in writing, will be deemed to have been
properly given to State Street hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
A. If State Street provides Fund direct access to the computerized
investment portfolio custody systems used by State Street ("Systems")
or if State Street and Fund agree to utilize any electronic system of
communication, Fund agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or improper
access to or use of the Systems or such other system.
B. Fund will preserve the confidentiality of the Systems and the tapes,
books, reference manuals, instructions, records, programs,
documentation and information of, and other materials relevant to, the
Systems and the business of State Street ("Confidential Information").
Fund agrees that it will not voluntarily disclose any such
Confidential Information to any other person other than its own
employees who reasonably have a need to know such information pursuant
hereto. Fund will return all such Confidential Information to State
Street upon termination or expiration hereof.
C. Fund has been informed that the Systems are licensed for use by State
Street from one or more third parties ("Licensors"), and Fund
acknowledges that State Street and Licensors have proprietary rights
in and to the Systems and all other State Street or Licensor programs,
code, techniques, know-how, data bases, supporting documentation, data
formats, and procedures, including without limitation any changes or
modifications made at the request or expense or both of Fund
(collectively, the "Protected Information"). Fund acknowledges that
the Protected Information constitutes confidential material and trade
secrets of State Street and Licensors. Fund will preserve the
confidentiality of the Protected Information, and Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or taking
of Protected Information, residing or existing internal or external to
a computer, computer system, or computer network, or the knowing and
unauthorized accessing or causing to be accessed of any computer,
computer system, or computer network, may be subject to civil
liabilities and criminal penalties under applicable law. Fund will so
inform employees and agents who have access to the Protected
Information
or to any computer equipment capable of accessing the same. Licensors
are intended to be and are third party beneficiaries of Fund's
obligations and undertakings contained in this Section.
D. Fund hereby represents and warrants to State Street that it has
determined to its satisfaction that the Systems are appropriate and
suitable for its use. THE SYSTEMS ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. State Street EXPRESSLY DISCLAIMS ALL WARRANTIES
EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio:
A. Each Portfolio will be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered hereby,
every reference herein to Fund is deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no
circumstances will the rights, obligations or remedies with respect to
a particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single document to
memorialize the separate agreement of each Portfolio is understood to
be for clerical convenience only and will not constitute any basis for
joining the Portfolios for any reason.
B. Fund may appoint State Street as its custodian for additional
Portfolios from time to time by written notice, provided that State
Street consents to such addition. Rates or charges for each additional
Portfolio will be as agreed upon by State Street and Fund in writing.
11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights and
liabilities of the parties hereto will be governed by, the laws of the
Commonwealth of Massachusetts, without reference to the choice of laws
principles thereof.
B. All terms and provisions hereof will be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
C. The representations and warranties, the indemnifications extended
hereunder, and the provisions of Section 9 hereof are intended to and
will continue after and survive the expiration, termination or
cancellation hereof.
D. No provisions hereof may be amended or modified in any manner except
by a written agreement properly authorized and executed by each party
hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions hereof or to enforce any rights resulting from any
breach of any of the terms or
conditions hereof, including the payment of damages, will not be
construed as a continuing or permanent waiver of any such terms,
conditions, rights or privileges, but the same will continue and
remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver, release or discharge of any party's rights
hereunder will be effective unless contained in a written instrument
signed by the party sought to be charged.
F. The captions herein are included for convenience of reference only,
and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts, each of
which is deemed an original but all of which together constitute one
and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be considered severable and will not be
affected thereby, and every remaining provision hereof will remain in
full force and effect and will remain enforceable to the fullest
extent permitted by applicable law.
I. This Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
J. Neither the execution nor performance hereof will be deemed to create
a partnership or joint venture by and between State Street and Fund or
any Portfolio.
K. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by either party hereunder will not
affect any rights or obligations of the other party hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
STATE STREET BANK AND TRUST COMPANY FREMONT MUTUAL FUNDS, INC.
By: By:
------------------------------ ------------------------------
Title: Title:
--------------------------- ---------------------------
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
FOREIGN--Income will be credited contractually on pay day in the markets noted
with Contractual Income Policy. The markets noted with Actual income policy will
be credited income when it is received.
====================================================================================================================================
MARKET INCOME POLICY MARKET INCOME POLICY MARKET INCOME POLICY
------------------------------------------------------------------------------------------------------------------------------------
Argentina Actual Hong Kong Contractual Poland Actual
------------------------------------------------------------------------------------------------------------------------------------
Australia Contractual Hungary Actual Portugal Contractual
------------------------------------------------------------------------------------------------------------------------------------
Austria Contractual India Actual Russia Actual
------------------------------------------------------------------------------------------------------------------------------------
Bahrain Actual Indonesia Actual Singapore Contractual
------------------------------------------------------------------------------------------------------------------------------------
Bangladesh Actual Ireland Actual Slovak Republic Actual
------------------------------------------------------------------------------------------------------------------------------------
Belgium Contractual Israel Actual South Africa Actual
------------------------------------------------------------------------------------------------------------------------------------
Bermuda Actual Italy Contractual South Korea Actual
------------------------------------------------------------------------------------------------------------------------------------
* Bolivia Actual Ivory Coast Actual Spain Contractual
------------------------------------------------------------------------------------------------------------------------------------
Botswana Actual * Jamaica Actual Sri Lanka Actual
------------------------------------------------------------------------------------------------------------------------------------
Brazil Actual Japan Contractual Swaziland Actual
------------------------------------------------------------------------------------------------------------------------------------
Canada Contractual Jordan Actual Sweden Contractual
------------------------------------------------------------------------------------------------------------------------------------
Chile Actual Kenya Actual Switzerland Contractual
------------------------------------------------------------------------------------------------------------------------------------
China Actual Lebanon Actual Taiwan Actual
------------------------------------------------------------------------------------------------------------------------------------
Colombia Actual Luxembourg Actual Thailand Actual
------------------------------------------------------------------------------------------------------------------------------------
Cyprus Actual Malaysia Actual * Trinidad & Actual
------------------------------------------------------------------------------------------------------------------------------------
Czech Republic Actual Mauritius Actual * Tunisia Actual
------------------------------------------------------------------------------------------------------------------------------------
Denmark Contractual Mexico Actual Turkey Actual
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Ecuador Actual Morocco Actual UnitedKingdom Contractual
------------------------------------------------------------------------------------------------------------------------------------
Egypt Actual Namibia Actual United States See Attached
------------------------------------------------------------------------------------------------------------------------------------
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
------------------------------------------------------------------------------------------------------------------------------------
Euro CDs Actual New Zealand Contractual Venezuela Actual
------------------------------------------------------------------------------------------------------------------------------------
Finland Contractual Norway Contractual Zambia Actual
------------------------------------------------------------------------------------------------------------------------------------
France Contractual Oman Actual Zimbabwe Actual
------------------------------------------------------------------------------------------------------------------------------------
Germany Contractual Pakistan Actual
------------------------------------------------------------------------------------------------------------------------------------
Ghana Actual Peru Actual
------------------------------------------------------------------------------------------------------------------------------------
Greece Actual Philippines Actual
====================================================================================================================================
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed with Income
Policy of Contractual.
UNITED STATES--
====================================================================================================================================
INCOME TYPE DTC FED PTC PHYSICAL
------------------------------------------------------------------------------------------------------------------------------------
Dividends Contractual N/A N/A Actual
------------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Interest Contractual Contractual N/A Actual
------------------------------------------------------------------------------------------------------------------------------------
Variable Rate Interest Contractual Contractual N/A Actual
------------------------------------------------------------------------------------------------------------------------------------
GNMA I N/A N/A Contractual PD +1 N/A
------------------------------------------------------------------------------------------------------------------------------------
GNMA II N/A N/A Contractual PD *** N/A
------------------------------------------------------------------------------------------------------------------------------------
Mortgages Actual Contractual Contractual Actual
------------------------------------------------------------------------------------------------------------------------------------
Maturities Actual Contractual N/A Actual
====================================================================================================================================
Exceptions to the above Contractual Income Policy include securities that are:
o Involved in a trade whose settlement either failed, or is pending over the
record date, (excluding the United States);
o On loan under a self directed securities lending program other than State
Street's own vendor lending program;
o Known to be in a condition of default, or suspected to present a risk of
default or payment delay; < In the asset categories, without limitation, of
Private Placements, Derivatives, Options, Futures, CMOs, and Zero Coupon
Bonds.
o Securities whose amount of income and redemption cannot be calculated in
advance of payable date, or determined in advance of actual collection,
examples include ADRs;
o Payments received as the result of a corporate action, not limited to, bond
calls, mandatory or optional puts, and tender offers.
*** For GNMA II securities, if the 19th day of the month is a business day,
Payable/Distribution Date is the next business day. If the 19th is not a
business day, but the 20th is a business day, Payable/Distribution date is the
first business day after the 20th. If both the 19th and 20th are not business
days, Payable/Distribution will be the next business day thereafter.
EXHIBIT B -- FUNDS TRANSFER OPERATING GUIDELINES
1 OBLIGATION OF THE SENDER: State Street is authorized to promptly debit Fund's
("Client's") account(s) upon the receipt of a payment order in compliance with
any of the Security Procedures chosen by the Client, from those offered on the
attached selection form (and any updated selection forms hereafter executed by
the Client), for funds transfers and in the amount of money that State Street
has been instructed to transfer. State Street is hereby instructed to accept
funds transfer instructions only via the delivery methods and Security
Procedures indicated on the attached selection form (and any updated executed by
the Client). 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. State Street shall
execute payment orders in compliance with the selected Security Procedures and
with the Client's/Investment Manager'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.
State Street will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable to
execute any such payment order on the execution date, such payment order will be
deemed to have been received on the next business day.
2 SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by State
Street. The Client shall restrict access to confidential information relating to
the Security Procedures 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 selected Security
Procedures.
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 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 applicable volume, aggregate dollar,
network, time, credit or similar limits upon wire transfers; 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 selected Security Procedures provided that such requests are received
in sufficient time to afford State Street a reasonable opportunity to act prior
to executing the payment order. However, State Street assumes no liability if
the request for amendment or cancellation cannot be satisfied by State Street's
reasonable efforts.
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 selected
Security Procedures. The Security Procedures are 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 (including but not limited to failure to execute a
payment order) shall State Street be liable for special, indirect or
consequential damages, even if advised of the possibility of such damages.
8 AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When the
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 Mid-America Payment Exchange or other similar body, State Street or its
agent will act as an Originating Depository Financial Institution and/or
Receiving Depository Financial Institution, as the case may be, with respect to
such entries. Credits given with respect to an ACH credit entry are provisional
until final settlement for such entry is received from the Federal Reserve Bank.
If such final settlement is not received, the Client agrees to promptly refund
the amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9 CONFIRMATIONS: Confirmation of State Street's execution of payment orders
shall ordinarily be provided within 24 hours. Notice may be delivered through
State Street's account statements, advices, information systems, or by facsimile
or callback. The Client must report any objections to the execution of a payment
order within 30 days.
10 MISCELLANEOUS: State Street may use the Federal Reserve System Fedwire to
execute payment orders, and any payment order carried in whole or in part
through Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. State Street and the Client agree to cooperate to attempt to
recover any funds erroneously paid to wrong 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.
SECURITY PROCEDURES 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.
Selection of this security procedure would be most appropriate for existing
SWIFT members.
[] REMOTE BATCH TRANSMISSION Wire transfer instructions are delivered via
Computer-to-Computer (CPU-CPU) data communications between the Client
and/or its agent and State Street and/or its agent. Security procedures
include encryption and/or the use of a test key by those individuals
authorized as Automated Batch Verifiers or a callback procedure to those
individuals. Clients selecting this option should have an existing facility
for completing CPU-CPU transmissions. This delivery mechanism is typically
used for high-volume business such as shareholder redemptions and dividend
payments.
[] TELEPHONE CONFIRMATION (CALL BACK) 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 of the payment order, 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.
[] TEST KEY Test Key confirmation will be used to verify all non-repetitive
funds transfer instructions received via facsimile or phone. State Street
will provide test keys if this option is chosen. State Street will verify
that the instruction contains the signature of an authorized person and
prior to execution of the payment order, will authenticate the test key
provided with the corresponding test key at State Street. 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
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
$10 million limit. If the payment order exceeds the $10 million limit, the
instruction will be confirmed by telephone or test key prior to execution.
Repetitive wire instructions must be reconfirmed annually. Clients may
establish Repetitive Wires by following the agreed upon security procedures
as described by Telephone Confirmation (Call Back) or Test Key. This
alternative is recommended whenever funds are frequently transferred
between the same two accounts.
[] STANDING INSTRUCTIONS Funds are transferred by State Street to a counter
party on the Client's established list of authorized counter parties. Only
the date and the dollar amount are variable. Clients may establish Standby
Instructions by following the agreed upon security procedures as described
by Telephone Confirmation (Call Back) or Test Key. This option is used for
transactions that include but are not limited to Foreign Exchange
Contracts, Time Deposits and Tri-Party Repurchase Agreements.
[] AUTOMATED CLEARING HOUSE (ACH) State Street or its agent receives an
automated transmission from a Client for the initiation of payment (credit)
or collection (debit) transactions through the ACH network. The
transactions contained on each transmission or tape must be authenticated
by the Client. The transmission is sent from the Client's or its agent's
system to State Street's or its agent's system with encryption.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND OPTIONAL DEPOSITORIES
COUNTRY SUBCUSTODIAN OPTIONAL DEPOSITORIES
CLIENT OPERATIONS CONTACT
ALTERNATE CONTACT
Xxxxxxx Xxxxxxxx Xxxx Xxx
----------------------------------- -----------------------------------
Name Name
000 Xxxxxx Xxxxxx, Xxxxx 0000 000 Xxxxxx Xxxxxx, Xxxxx 0000
----------------------------------- -----------------------------------
Xxxxxxx Xxxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
----------------------------------- -----------------------------------
City/State/Zip Code City/State/Zip Code
000-000-0000 000-000-0000
----------------------------------- -----------------------------------
Telephone Number Telephone Number
000-000-0000
-----------------------------------
Facsimile Number
-----------------------------------
SWIFT Number
FREMONT MUTUAL FUNDS, INC.
By:
--------------------------------
Title:
-----------------------------
Date:
------------------------------
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria GiroCredit Bank Aktiengesellschaft der Sparkassen --
Bahrain The British Bank of the Middle East (as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale Bank --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's The Hongkong and Shanghai Banking Corporation --
Republic of Limited Shanghai and Shenzhen branches
China
Colombia Cititrust Colombia S.A.Sociedad Fiduciaria --
Croatia Privredana banka Zagreb d.d --
Cyprus Barclays Bank PLC Cyprus Offshore Banking Unit --
Czech Ceskoslovenska Obchodni Banka A.S. --
Republic
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Xxxxxx Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A Bank of Greece
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
India Deutsche Bank AG;The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en Cote d'Ivoire --
Jamaica Scotiabank Trust and Merchant Bank --
Japan The Daiwa Bank, Limited; The Fuji Bank Limited Japan Securities Depository
The Sumitomo Trust & Banking Co., Ltd.
Jordan The British Bank of the Middle East (as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Citibank, N.A. --
Korea
Lebanon The British Bank of the Middle East Custodian and Clearing Center of
(as delegate of the Hongkong and Financial Instruments for Lebanon
Corporation Limited) Shanghai Banking (MIDCLEAR) X.X.X.;
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking --
Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse --
Oman The British Bank of the Middle East(as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank Poland S.A. --
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, Zurich via Credit --
Suisse First Boston Limited, Moscow
Singapore The Development Bank of Singapore Ltd. --
Slovak Ceskoslovenska ObchodnaBanka A.S. --
Republic
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited--
Swaziland Barclays Bank of Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland Union Bank of Switzerland --
Taiwan - Central Trust of China --
R.O.C.
Thailand Standard Chartered Bank --
Trinidad Republic Bank Ltd. --
& Tobago
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
United State Street Bank and Trust --
Kingdom
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)
Cedel (Cedel Bank, societe anonyme)
INTERSETTLE (for EASDAQ Securities)
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES (INCLUDES ENTITIES FOR WHICH USE IS
MANDATORY AS A MATTER OF LAW OR EFFECTIVELY MANDATORY AS A
MATTER OF MARKET PRACTICE)
Argentina -Caja de Valores S.A.;
-CRYL
Australia -Austraclear Limited;
-Reserve Bank Information andTransfer System
Austria -Oesterreichische Kontrollbank AG (Wertpapiersammelbank
Division)
Belgium -Caisse Interprofessionnelle de Depots et de Virements de
Titres S.A.;
-Banque Nationale de Belgique
Brazil -Bolsa de Valores de Sao Paulo;
-Bolsa de Valores de Rio de Janeiro
- All SSB clients presently use Calispa
-Central de Custodia e de Liquidacao Financeira de Titulos
-Banco Central do Brasil, Systema Especial de Liquidacao e
Custodia
Canada -The Canadian Depositoryfor Securities Limited; West Canada
Depository Trust Company [depositories linked]
People's Republic -Shanghai Securities Central Clearing and Registration
of China Corporation;
-Shenzhen Securities Central Clearing Co., Ltd.
Croatia Ministry of Finance
Czech Republic --Stredisko cennych papiru';
-Czech National Bank
Denmark -Vaerdipapircentralen - The Danish Securities Center
Egypt -Misr Company for Clearing, Settlement, and Central
Depository
Estonia -Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities Depository
France -Societe Interprofessionnelle pour la Compensation des
Valeurs Mobilieres;
-Banque de France, Saturne System
Germany -The Deutscher Kassenverein AG
Greece -The Central Securities Depository (Apothetirion Titlon
A.E.);
Hong Kong -The Central Clearing and Settlement System;
-The Central Money Markets Unit
Hungary -The Central Depository and Clearing House (Budapest) Ltd.
[Mandatory for Gov't Bonds only; SSB does not use for other
securities]
Indonesia -Bank of Indonesia
Ireland -The Central Bank of Ireland, The Gilt Settlement Office
Israel -The Clearing House of the Tel Aviv Stock Exchange;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Japan -Bank of Japan Net System
Republic of Korea -Korea Securities Depository
Lebanon -The Central Bank of Lebanon
Malaysia -Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities Trading and
Safekeeping Systems
Mauritius -The Central Depository & Settlement System
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el Deposito de
Valores);
Netherlands -Nederlands Centraal Instituut voor Giraal Effectenverkeer
B.V. ('NECIGEF') [** It is planned that as of 1/1/98 NBNV
will no longer hold government securities, all securities
will be transferred to NECIGEF];
-De Nederlandsche Bank N.V. ('NBNV')**
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen - The Norwegian Registry of Securities
Oman -Muscat Securities Market
Peru -Caja de Valores y Liquidaciones (CAVALI, S.A.)
Philippines -The Philippines Central Depository Inc.
-The Book-Entry-System of Bangko Sentral ng Pilipinas;
-The Registry of Scripless Securities of the Bureau of the
Treasury
Poland -The National Depository of Securities (Krajowy Depozyt
Papierow Wartos'ciowych);
-National Bank of Poland
Portugal -Central de Valores Mobiliarios
Romania -National Securities Clearing, Settlement and Depository
Co.;
-Bucharest Stock Exchange;
-National Bank of Romania
Singapore -The Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko Cennych Papierov;
-National Bank of Slovakia
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y Liquidacion de Valores, S.A.;
-Banco de Espana, Anotaciones en Cuenta
Sri Lanka -Central Depository System (Pvt) Limited
Sweden -Vardepapperscentralen VPC AB - The Swedish Central
Securities Depository
Switzerland -Schweizerische Effekten - Giro AG;
Taiwan - R.O.C. -The Taiwan Securities Central Depository Company, Ltd.
Thailand -Thailand Securities Depository Company Limited
Tunisia -STICODEVAM;
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S.;
-Central Bank of Turkey
United Kingdom -The Bank of England, The Central Gilts Office; The Central
Moneymarkets Office; The European Settlements Office;
-First Chicago Clearing Centre
Uruguay -Central Bank of Uruguay
Zambia -Lusaka Central Depository
