EXHIBIT 99.8
CUSTODIAN, FUND ACCOUNTING AND RECORDKEEPING AGREEMENT
BY AND BETWEEN
KEYSTONE AMERICA STATE TAX FREE FUND - SERIES II
AND
STATE STREET BANK AND TRUST COMPANY
Agreement made as of this 15th day of December 1993 by and between
KEYSTONE AMERICA STATE TAX FREE FUND - SERIES II, a Massachusetts business
trust, ("Fund") having its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, 00000-0000, and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation ("State Street"), having its principal place
of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
In consideration of the mutual agreements herein contained, the Fund
and State Street agree as follows:
1. The Fund appoints State Street as its Custodian, subject to the
provisions hereof. State Street hereby accepts such appointment as Custodian. As
such Custodian, State Street shall retain all securities, cash and other
assets now owned or hereafter acquired by the Fund, and the Fund shall deliver
and pay or cause to be delivered and paid to State Street, as Custodian, all
securities, cash and other assets now owned or hereafter acquired by the Fund
during the period of this Agreement.
2. All securities delivered to State Street (other than in bearer form)
shall be properly endorsed and in proper form for transfer into or in the name
of the Fund, of a nominee of State Street for the exclusive use of the Fund or
of such other nominee as may be mutually agreed upon by State Street and the
Fund.
2.1. The Fund shall deliver to State Street certified or authenticated
copies of its Declaration of Trust and By-Laws, all amendments thereto, a
certified copy of the resolution of the Fund's Board of Trustees appointing
State Street to act in the capacities covered by this Agreement and authorizing
the signing of this Agreement and copies of such resolutions of its Board of
Trustees, contracts and other documents as may be reasonably required by State
Street in the performance of its duties hereunder.
3. As Custodian, State Street shall promptly:
A. Safekeeping. Keep safely in a separate account the
securities and other assets of the Fund, including without limitation all
securities in bearer form, other than (a) securities which are maintained
pursuant to paragraph 3(B) in a Securities System (as defined in paragraph 3(B))
and (b) commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is deposited
and/or maintained in the Direct Paper System of State Street pursuant to Section
3(BB), and, on behalf of the Fund, receive delivery of certificates, including
without limitation all securities in bearer form, for safekeeping and keep such
certificates physically segregated at all times from those of any other person.
State Street shall maintain records of all receipts, deliveries and locations of
such securities, together with a current inventory thereof and shall conduct
periodic physical inspections of certificates representing bonds and other
securities held by it under this Agreement at least annually in such manner as
State Street shall determine from time to time to be advisable in order to
verify the accuracy of such inventory. State Street shall provide the Fund with
copies of any reports of its internal count or other verification of the
securities of the Fund held in its custody, including reports on its own system
of internal accounting control. In addition, if and when independent certified
public accountants retained by State Street shall count or otherwise verify the
securities of the Fund held in State Street's custody, State Street shall
provide the Fund with a copy of the report of such accountants. With respect to
securities held by any agent or Subcustodian appointed pursuant to paragraph
6(C) hereof, State Street may rely upon certificates from such agent or
Subcustodian as to the holdings of such agent or Subcustodian, it being
understood that such reliance in no way releases State Street of its
responsibilities or liabilities under this Agreement. State Street shall
promptly report to the Fund the results of such inspections, indicating any
shortages or discrepancies uncovered thereby, and take appropriate action to
remedy any such shortages or discrepancies.
B. Deposit of Fund Assets in Securities Systems.
Notwithstanding any other provision of this Agreement, State Street may deposit
and/or maintain securities owned by the Fund in Depository Trust Company, a
clearing agency registered with the Securities and Exchange Commission
("Commission") under Section 17A of the Securities Exchange Act of 1934
("Exchange Act"), which acts as a securities depository, in any other clearing
agency registered under Section 17A of the Exchange Act and which has been
authorized by the Fund's Board of Trustees, in the book-entry system authorized
by the U.S. Department of the Treasury and certain federal agencies or in any
other book entry system which the Commission has authorized for use by
investment companies as a securities depository by order, or interpretive or
no-action letter, and which has been authorized by the Fund's Board of Trustees,
collectively referred to herein as "Securities System(s)", in accordance with
applicable Federal Reserve Board and Commission rules and regulations, if any,
and subject to the following provisions:
0) Xxxxx Xxxxxx may keep securities of the Fund in a
Securities System provided that such securities are deposited in an
account ("Account") of State Street in the Securities System which
shall not include any assets of State Street other than assets held
as a fiduciary, custodian or otherwise for customers;
2) The records of State Street with respect to securities
of the Fund which are maintained in a Securities System shall
identify by book entry those securities belonging to the Fund;
0) Xxxxx Xxxxxx shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of State Street to reflect
such payment and transfer for the account of the Fund. State Street
shall transfer securities sold for the account of the Fund upon (i)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making of
an entry on the records of State Street to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the
Securities System of transfers of securities for the account of the
Fund shall identify the Fund, be maintained for the Fund by State
Street and be provided to the Fund at its request. State Street 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 Securities System for the account of the Fund on
the next business day;
0) Xxxxx Xxxxxx shall promptly provide the Fund with any
report obtained by State Street on the Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System. State Street shall
promptly provide the Fund any report on State Street's accounting
system, internal accounting control and procedures for safeguarding
securities deposited with State Street which is reasonably requested by
the Fund;
5) Anything to the contrary in this Agreement notwithstanding,
State Street shall be liable to the Fund for any claim, loss,
liability, damage or expense to the Fund, including attorney's fees,
resulting from use of a Securities System by reason of any negligence,
misfeasance or misconduct of State Street, its agents or any of its or
their employees or from failure of State Street or any such agent to
enforce effectively such rights as it may have against a Securities
System. At the election of the Fund, it shall be entitled to be
subrogated to the rights of State Street or its agents with respect to
any claim against the Securities System or any other person which State
Street or its agents may have as a consequence of any such claim, loss,
liability, damage or expense if and to the extent that the Fund has not
been made whole for any such loss or damage.
BB. Fund Assets Held in State Street's Direct Paper System.
State Street may deposit and/or maintain securities owned by the Fund in the
Direct Paper System of State Street 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;
0) Xxxxx Xxxxxx may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an account
("Account") of State Street in the Direct Paper System which shall not
include any assets of State Street other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of State Street 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;
0) Xxxxx Xxxxxx shall pay for securities purchased for the
account of the Fund upon the making of an entry on the records of State
Street to reflect such payment and transfer of securities to the
account of the Fund. State Street shall transfer securities sold for
the account of the Fund upon the making of an entry on the records of
State Street to reflect such transfer and receipt of payment for the
account of the Fund;
0) Xxxxx Xxxxxx 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 Securities System for
the account of the Fund;
0) Xxxxx Xxxxxx shall provide the Fund with any report on its
system of internal accounting control as the Fund may reasonably
request from time to time.
C. State Street's Records. The records of State Street (and
its agents and Subcustodians) with respect to its services for the Fund shall at
all times during the regular business hours of State Street (or its agents or
Subcustodians) be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the Commission.
CC. Delivery of Securities. State Street shall release and
deliver securities owned by the Fund held by State Street or in a Securities
System account of State Street or in State Street's Direct Paper book entry
system account ("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 cases specified in paragraphs 3(D), 3(E), 3(F),
3(G), 3(H), 3(I), 3(J), 3(K), 3(L) and 3(M) hereof.
D. Registered Name, Nominee. Register securities of the Fund
held by State Street in the name of the Fund, of a nominee of State Street for
the exclusive use of the Fund, or of such other nominee as may be mutually
agreed upon, or of any mutually acceptable nominee of any agent or Subcustodian
appointed pursuant to paragraph 6(C) hereof.
E. Purchases. Upon receipt of proper instructions (as defined
in paragraph 5(A) of Section II hereof; hereafter "Proper Instructions") and
insofar as cash is available for the purpose, pay for and receive all securities
purchased for the account of the Fund, payment being made only upon receipt of
the securities by State Street (or any bank, banking firm, responsible
commercial agent or trust company doing business in the United States and
appointed pursuant to paragraph 6(C) of Section II hereof as State Street's
agent or Subcustodian for this purpose) registered as provided in paragraph 3(D)
of Section II hereof or in form for transfer satisfactory to State Street, or,
in the case of repurchase agreements entered into between the Fund and a bank or
a dealer, delivery of the securities either in certificate form or through an
entry crediting State Street's account at the Federal Reserve Bank with such
securities, or, upon receipt by State Street of a facsimile copy of a letter of
understanding with respect to a time deposit account of the Fund signed by any
bank, whether domestic or foreign, and pursuant to Proper Instructions from the
Fund, for transfer to the time deposit account of the Fund in such bank; such
transfer may be effected prior to receipt of a confirmation from a broker and/or
the applicable bank or in the case of a purchase involving the Direct Paper
System, in accordance with the conditions set forth in Paragraph 3(BB). All
securities accepted by State Street shall be accompanied by payment of, or a
"due xxxx" for any dividends, interest or other distributions of the issuer due
the purchaser. In any and every case of a purchase of securities for the account
of the Fund where payment is made by State Street in advance of receipt of the
securities purchased, State Street shall be absolutely liable to the Fund for
such securities to the same extent as if the securities had been received by
State Street, except that in the case of repurchase agreements entered into by
the Fund with a bank which is a member of the Federal Reserve System, State
Street may transfer funds to the account of such bank prior to the receipt of
written evidence that the securities subject to such repurchase agreement have
been transferred by book-entry into a segregated nonproprietary account of State
Street maintained with the Federal Reserve Bank of Boston, provided that such
securities have in fact been so transferred by book-entry; provided, further,
however, that State Street and the Fund agree to use their best efforts to
insure receipt by State Street of copies of documentation for each such
transaction as promptly as possible.
F. Exchanges. Upon receipt of Proper Instruction, exchange
securities, interim receipts or temporary securities held by it or by any agent
or Subcustodian appointed by it pursuant to paragraph 6(C) hereof for the
account of the Fund for other securities alone or for other securities and cash,
and expend cash insofar as cash is available in connection with any merger,
consolidation, reorganization, recapitalization, split-up of shares, changes of
par value, conversion or in connection with the exercise of warrants,
subscription or purchase rights, or otherwise, and deliver securities to the
designated depository or other receiving agent or Subcustodian in response to
tender offers or similar offers to purchase received in writing; provided that
in any such case the securities and/or cash to be received as a result of any
such exchange, expenditure or delivery are to be delivered to State Street (or
its agents or Subcustodians). State Street shall give notice as provided under
paragraph 14 hereof to the Fund in connection with any transaction specified in
this paragraph and at the same time shall specify to the Fund whether such
notice relates to securities held by an agent or Subcustodian appointed pursuant
to paragraph 6(C) hereof, so that the Fund may issue to State Street Proper
Instructions for State Street to act thereon prior to any expiration date (which
shall be presumed to be two business days prior to such date unless State Street
has previously advised the Fund of a different period). The Fund shall give to
State Street full details of the time and method of submitting securities in
response to any tender or similar offer, exercising any subscription or purchase
right or making any exchange pursuant to this paragraph. When such securities
are in the possession of an agent or Subcustodian appointed by State Street
pursuant to paragraph 6(C) hereof, the Proper Instructions referred to in the
preceding sentence must be received by State Street in timely enough fashion
(which shall be presumed to be three business days unless State Street has
advised the Fund in writing of a different period) for State Street to notify
the agent or Subcustodian in sufficient time to permit such agent to act prior
to any expiration date.
G. Sales. Upon receipt of Proper Instructions and upon receipt
of full payment therefor, release and deliver securities which have been sold
for the account of the Fund. At the time of delivery all such payments are to be
made in cash, by a certified check upon or a treasurer's or cashier's check of a
bank, by effective bank wire transfer through the Federal Reserve Wire System
or, if appropriate, outside of the Federal Reserve Wire System and subsequent
credit to the Fund's custodian account, or, in case of delivery through a stock
clearing company, by book-entry credit by the stock clearing company in
accordance with the then current "street" custom.
H. Purchases by Issuer. Upon receipt of Proper Instructions,
release and deliver securities owned by the Fund 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 State Street.
I. Changes of Name and Denomination. Upon receipt of Proper
Instructions, release and deliver securities owned by the Fund to the issuer
thereof or its agent for transfer into the name of the Fund or of a nominee of
State Street or of the Fund for the exclusive use of the Fund or for exchange
for a different number of bonds, certificates or other evidence representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions if any; provided that in any such case, the
new securities are to be delivered to State Street.
J. Street Delivery. In connection with delivery in New York
City and upon receipt of Proper Instructions, which in the case of registered
securities may be standing instructions, release securities owned by the Fund
upon receipt of a written receipt for such securities to the broker selling the
same for examination in accordance with the existing "street delivery" custom.
In every instance, either payment in full for such securities shall be made or
such securities shall be returned to State Street that same day. In the event
existing "street delivery" custom is modified, State Street shall obtain
authorization from the Board of Trustees of the Fund prior to any use of such
modified "street delivery" custom.
K. Release of Securities for Use as Collateral. Upon receipt
of Proper Instructions and subject to the Declaration of Trust, release
securities belonging to the Fund to any bank or trust company for the purpose of
pledge, mortgage or hypothecation to secure any loan incurred by the Fund;
provided, however, that securities shall be released 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, subject to proper prior
authorization from the Fund, further securities may be released for that
purpose. Upon receipt of Proper Instructions, pay such loan upon redelivery to
it of the securities pledged or hypothecated therefor and upon surrender of the
note or notes evidencing the loan.
L. Compliance with Applicable Rules and Regulations of The
Options Clearing Corporation and National Securities or Commodities Exchanges or
Commissions. Upon receipt of Proper Instructions, deliver securities in
accordance with the provisions of any agreement among the Fund, State Street and
a broker-dealer registered under the Exchange Act and a member of the National
Association of Securities Dealers, Inc. ("NASD") relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Fund; or,
upon receipt of Proper Instructions, deliver securities in accordance with the
provisions of any agreement among the Fund, State Street, and a Futures
Commission Merchant registered under the Commodity Exchange Act relating to
compliance with the rules of the Commodity Futures Trading Commission and/or any
contract market, or any similar organization or organizations, regarding account
deposits in connection with transactions by the Fund.
M. Release or Delivery of Securities for Other Purposes. Upon
receipt of Proper Instructions, release or deliver any securities held by it for
the account of the Fund for any other purpose (in addition to those specified in
paragraphs 3(CC), 3(D), 3(E), 3(F), 3(G), 3(H), 3(I), 3(J), 3(K) and 3(L)
hereof) which the Fund declares is a proper corporate purpose pursuant to Proper
Instructions.
N. Proxies, Notices, Etc. State Street shall promptly for-
xxxx upon receipt to the Fund all forms of proxies and all notices of meetings
and any other notices or announcements affecting or relating to the securities,
including without limitation, notices relating to class action claims and
bankruptcy claims, and upon receipt of Proper Instructions execute and deliver
or cause its nominee to execute and deliver such proxies or other authorizations
as may be required. State Street, its nominee or its agents or Subcustodian
shall not vote upon any of the securities or execute any proxy to vote thereon
or give any consent or take any other action with respect thereto (except as
otherwise herein provided) unless ordered to do so by Proper Instructions. State
Street shall require its agents and Subcustodians appointed pursuant to
paragraph 6(C) hereof to forward any such announcements and notices to State
Street upon receipt.
O. Segregated Account. State Street 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 State
Street pursuant to Paragraph 3(B) hereof, (i) in accordance with the provisions
of any agreement among the Fund, State Street 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 com- pliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv), for other proper corporate purposes,
but only, in the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of Trustees signed
by an officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
P. Miscellaneous. In general, attend to all nondiscretionary
details in connection with the sale, exchange, substitution, purchase, transfer
or other dealing with such securities or property of the Fund, except as
otherwise directed by the Fund pursuant to Proper Instructions. State Street
shall render to the Fund daily a report of all monies received or paid on behalf
of the Fund, an itemized statement of the securities and cash for which it is
accountable to the Fund under this Agreement and itemized statement of security
transactions which settled the day before and shall render to the Fund weekly an
itemized statement of security transactions which failed to settle as scheduled.
At the end of each week State Street shall provide a list of all security
transactions that remain unsettled at such time.
4. Additionally, as Custodian, State Street shall promptly:
A. Bank Account. Retain safely all cash 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 1940 Act, in the banking department of
State Street in a separate account or accounts in the name of the Fund, subject
only to draft or order by State Street acting pursuant to the terms of this
Agreement. If and when authorized by Proper Instructions in accordance with a
vote of the Board of Trustees of the Fund, State Street may open and maintain an
additional account or accounts in such other bank or trust companies as may be
designated by such instructions, such account or accounts, however, to be solely
in the name of State Street in its capacity as Custodian and subject only to its
draft or order in accordance with the terms of this Agreement. State Street
shall furnish the Fund, not later than thirty (30) calendar days after the last
business day of each month, a statement reflecting the current status of its
internal reconciliation of the closing balance as of that day in all accounts
described in this paragraph to the balance shown on the daily cash report for
that day rendered to the Fund.
B. Collections. Unless otherwise instructed by receipt of
Proper Instructions, collect, receive and deposit in the bank account or
accounts maintained pursuant to paragraph 4(A) hereof all income and other
payments with respect to the securities held hereunder, execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with the collection of bond and note coupons, do all other things
necessary or proper in connection with the collection of such income, and
without waiving the generality of the foregoing:
1) present for payment on the date of payment all coupons
and other income items requiring presentation;
2) present for payment all securities which may mature or
be called, redeemed, retired or otherwise become payable on
the date such securities become payable;
3) endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments on the
same day as received.
In any case in which State Street does not receive any such due and
unpaid income within a reasonable time after it has made proper demands for the
same (which shall be presumed to consist of at least three demand letters and at
least one telephonic demand), it shall so notify the Fund in writing, including
copies of all demand letters, any written responses thereto, and memoranda of
all oral responses thereto and to telephonic demands, and await proper
instruction; State Street shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its satisfaction for the
reasonable costs of such legal action for collection. It shall also notify the
Fund as soon as reasonably practicable whenever income due on securities is not
collected in due course.
C. Sale of shares of the Fund. Make such arrangements with the
Transfer Agent of the Fund as will enable State Street to make certain it
receives the cash consideration due to the Fund for shares of common stock
("shares") of the Fund as may be issued or sold from time to time by the Fund,
all in accordance with the Fund's Declaration of Trust and By-Laws, as amended.
D. Dividends and Distributions. Upon receipt of Proper
Instructions, release or otherwise apply cash insofar as cash is available for
the purpose of the payment of dividends or other distributions to shareholders
of the Fund.
E. Redemption of Shares of the Fund. From such funds as may be
available for the purpose, but subject to the limitation of the Fund's
Declaration of Trust and By-Laws, as amended, and applicable resolutions of the
Board of Trustees of the Fund pursuant thereto, make funds available for payment
to shareholders who have delivered to the Transfer Agent a request for
redemption of their shares by the Fund pursuant to such Declaration of Trust, as
amended.
In connection with the redemption of shares of the Fund pursuant to the
Fund's Declaration of Trust and By-Laws, as amended, State Street is authorized
and directed upon receipt of Proper Instructions from the Transfer Agent for the
Fund to make funds available for transfer through the Federal Reserve Wire
System or by other bank wire to a commercial bank account designated by the
redeeming shareholder.
F. Stock Dividends, Rights, Etc. Receive and collect all stock
dividends, rights and other items of like nature; and deal with the same
pursuant to Proper Instructions relative thereto.
G. Disbursements. Upon receipt of Proper Instructions, make or
cause to be made, insofar as cash is available for the purpose, disbursements
for the payment on behalf of the Fund of its expenses, including without
limitation, interest, taxes and fees or reimbursement to State Street or to the
Fund's investment advisers for their payment of any such expenses.
H. Other Proper Corporate Purposes. Upon receipt of Proper
Instructions, make or cause to be made, insofar as cash is available for the
purpose, disbursements for any other purpose (in addition to the purposes
specified in paragraphs 3(E), 3(F), 4(D), 4(E), and 4(G) of this Agreement)
which the Fund declares is a proper corporate purpose.
I. Records. Create, maintain and retain all records a)
relating to its activities and obligations under this Agreement in such manner
as shall meet the obligations of the Fund under the 1940 Act, particularly
Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, b) necessary to comply
with the representations of Part I - Fund Custodian Services and Part II -
Portfolio Pricing and Accounting of State Street's Response, dated May 1, 1979,
as amended, to Keystone Custodian Funds, Inc.'s and The Massachusetts Company,
Inc.'s Request for Proposal, dated March 19, 1979, as amended, (amendments after
June 22, 1979 are set forth in Schedule B) ("Parts I and II"), insofar as such
representations relate to the creation, maintenance and retention of records for
the Fund or c) as reasonably requested from time to time by the Fund. All
records maintained by State Street in connection with the performance of its
duties under this Agreement shall remain the property of the Fund and in the
event of termination of this Agreement shall be delivered in accordance with the
terms of paragraph 8 below.
J. Miscellaneous. Assist generally in the preparation of
routine reports to holders of shares of the Fund, to the Commission, including
form N-SAR, to state "Blue Sky" authorities, to others in the auditing of
accounts and in other matters of like nature, as required to comply with the
representations of Parts I and II insofar as such representations relate to the
preparation of reports for the Fund and as otherwise reasonably requested by the
Fund.
K. Fund Accounting and Net Asset Value Computation. State
Street shall maintain the general ledger and all other books of account of the
Fund, including the accounting for the Fund's port- folio. In addition, upon
receipt of Proper Instructions, which may be deemed to be continuing
instructions, State Street shall daily compute the net asset value of the shares
of the Fund and the total net asset value of the Fund. State Street shall, in
addition, perform such other services incidental to its duties hereunder as may
be reasonably requested from time to time by the Fund.
L. Services under Part I and Part II. In addition to the
services specified herein, State Street shall perform those services set forth
in Parts I and II, including without limitation general ledger accounting, daily
Fund portfolio pricing and custodian services to the extent such services relate
to the Fund; provided, however, that in the event that Parts I and II as they
relate to the Fund are in conflict with the terms of this Agreement, the terms
of this Agreement shall govern.
5. State Street and the Fund further agree as follows:
A. Proper Instructions. State Street shall be deemed to have
received Proper Instructions upon receipt of written instructions signed by the
Fund's Trustees or by one or more person or persons as the Fund's Board of
Trustees shall have from time to time authorized to give the particular class of
instructions for different purposes. Different persons may be authorized to give
instructions for different purposes. A copy of a resolution or action of the
Trustees certified by the secretary or an assistant secretary of the Fund may be
received and accepted by State Street as conclusive evidence of the instruction
of the Fund's Board of Trustees and/or the authority of any person or persons to
act on behalf of the Fund and may be considered as in full force and effect
until receipt of written notice to the contrary. Such instruction may be general
or specific in terms. Oral instructions will be considered Proper Instructions
if State Street reasonably believes them to have been given by a person
authorized by the Board of Trustees to give such oral instructions with respect
to the class of instruction 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 Fund and State Street are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Use by the Fund of such communication systems
shall constitute approval by the Fund of the safeguards available therewith.
B. Investments, Limitations. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, State Street may take cognizance
of the provisions of the Declaration of Trust of the Fund, as amended; provided,
however, that except as otherwise expressly provided herein, State Street may
assume unless and until notified in writing to the contrary that instructions
purporting to be Proper Instructions received by it are not in conflict with or
in any way contrary to any provision of the Declaration of Trust of the Fund, as
amended, or resolutions or proceedings of the Board of Trustees of the Fund.
6. State Street and the Fund further agree as follows:
A. Indemnification. State Street, as Depository and Custodian,
shall be entitled to receive and act upon advice of counsel (who may be counsel
for the Fund) and shall be without liability for any action reasonably taken or
thing reasonably done pursuant to such advice; provided that such action is not
in violation of applicable federal or state laws or regulations or contrary to
written instructions received from the Fund, and shall be indemnified by the
Fund and without liability for any action taken or thing done by it in carrying
out the terms and provisions of this Agreement in good faith and without
negligence, misfeasance or misconduct. In order that the indemnification
provision contained in this paragraph shall apply, however, if the Fund is asked
to indemnify or save State Street harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and State
Street shall use all reasonable care to identify and notify the Fund fully and
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Fund. The Fund
shall have the option to defend State Street against any claim which may be the
subject of this indemnification and in the event that the Fund so elects it will
so notify State Street, and thereupon the Fund shall take over complete defense
of the claim, and State Street shall initiate no further legal or other expenses
for which it shall seek indemnification under this paragraph. State Street shall
in no case confess any claim or make any compromise in any case in which the
Fund will be asked to indemnify State Street except with the Fund's prior
written consent.
B. Expenses Reimbursement. State Street shall be entitled to
receive from the Fund on demand reimbursement for its cash disbursements,
expenses and charges, excluding salaries and usual overhead expenses, as set
forth in Schedule A.
C. Appointment of Agents and Subcustodians. State Street, as
Custodian, may appoint (and may remove), only in compliance with the terms and
conditions of the Fund's Declaration of Trust and By-Laws, as amended, any
other bank, trust company or responsible commercial agent as its agent or
Subcustodian to carry out such of the provisions of this Agreement as State
Street may from time to time direct; provided, however, that the appointment of
any such agent or Subcustodian shall not relieve State Street of any of its
responsibilities under this Agreement.
D. Reliance on Documents. So long as and to the extent that it
is in good faith and in the exercise of reasonable care, State Street, as
Depository and 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, shall be protected in acting upon
any instructions, notice, request, consent, certificate or other instrument or
paper reasonably believed by it to be genuine and to constitute Proper
Instructions under this Agreement and shall, except as otherwise specifically
provided in this Agreement, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained by it hereunder a certificate signed
by the Fund's Trustees, the secretary or an assistant secretary of the Fund or
any other person expressly authorized by the Board of Trustees of the Fund.
E. Access to Records. Subject to security requirements of
State Street applicable to its own employees having access to similar records
within State Street and such regulations as to the conduct of such monitors as
may be reasonably imposed by State Street after prior consultation with an
authorized officer of the Fund, books and records of State Street pertaining to
its actions under this Agreement shall be open to inspection and audit at
reasonable times by the Trustees of, attorneys for, auditors employed by the
Fund or any other person as the Fund's Board of Trustees shall direct.
F. Recordkeeping. State Street shall maintain such records as
shall enable the Fund to comply with the requirements of all federal and state
laws and regulations applicable to the Fund with respect to the matters covered
by this Agreement and shall comply with the representations of Parts I and II as
such representations relate to maintaining records of the Fund.
7. Lien on Assets. If the Fund requires State Street to advance cash or
securities for any purpose or in the event that State Street 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 State Street
promptly, State Street shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement;
provided, however, that the total value of any property of the Fund which at any
time is security for any payment by State Street hereunder shall not exceed 15%
of the Fund's total net asset value.
8. The Fund shall pay State Street for its services as Custodian such
compensation as shall be specified in the attached Schedule A. Such compensation
shall remain fixed until December 31, 1994, unless this Agreement is terminated
as provided in paragraph 9.
9. State Street and the Fund further agree as follows:
A. Effective Period, Termination, Amendment and Interpretive
and Additional Provisions. This Agreement shall become effective as of the date
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 sixty (60) days after the date of such delivery or mailing; and
further provided, that the Fund may by action of the Fund's Board of Trustees
substitute another bank or trust company for State Street by giving notice as
provided above to State Street, provided, however that State Street shall not
act under paragraphs 3(B) or 3(BB) hereof in the absence of receipt of an
initial certificate of the secretary or an assistant secretary that the Board of
Trustees of the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the secretary or an assistant
secretary that the Board of Trustees has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the 1940 Act,
and that State Street shall not act under paragraph 3B.1 hereof in the absence
of receipt of an initial certificate of the secretary or an assistant secretary
that the Board of Trustees has approved the initial use of the Direct Paper
System and the receipt of an annual certificate of the secretary or an assistant
secretary that the Board of Trustees has reviewed the use by the Fund of the
Direct Paper System. The Fund or State Street shall not amend or terminate this
Agreement in contravention of any applicable federal or state laws or
regulations, or any provision of the Declaration of Trust of the Fund, as
amended; provided, however, that in the event of such termination State Street
shall remain as Custodian hereunder for a reasonable period thereafter if the
Fund after using its best efforts is unable to find a Successor Custodian.
In connection with the operation of this Agreement, State Street and
the Fund may agree from time to time 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 provision to be signed by both parties and annexed hereto, provided
that no such interpretive or additional provisions shall contravene any
applicable federal or state laws or regulations, or any provision of the Fund's
Declaration of Trust and By-Laws, as amended. No interpretive provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
B. Successor Custodian. Upon termination hereof or the
inability of State Street to continue to serve hereunder, the Fund shall pay to
State Street such compensation as may be due for services through the date of
such termination and shall likewise reimburse State Street for its costs,
expenses and disbursements incurred prior to such termination in accordance with
paragraph 6(B) hereof and such reasonable costs, expenses and disbursements as
may be incurred by State Street in connection with such termination.
If a Successor Custodian is appointed by the Board of Trustees of the
Fund in accordance with the Fund's Declaration of Trust, as amended, State
Street shall, upon termination, deliver to such Successor Custodian at the
office of State Street, properly endorsed and in proper form for transfer, all
securities then held hereunder, all cash and other assets of the Fund deposited
with or held by it hereunder.
If no such Successor Custodian is appointed, State Street shall, in
like manner at its office, upon receipt of a certified copy of a resolution of
the shareholders pursuant to the Fund's Declaration of Trust and By-Laws, as
amended, deliver such securities, cash and other properties in accordance with
such resolutions.
In the event that no written order designating a Successor Custodian or
certified copy of a resolution of the shareholders shall have been delivered to
State Street on or before the date when such termination shall become effective,
then State Street shall have the right to deliver to a bank or trust company
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 $5,000,000, all securities, cash and other properties
held by State Street and all instruments held by it relative thereto and all
other property held by it under this Agreement. Thereafter, such bank or trust
company shall be the Successor of State Street under this Agreement and subject
to the restrictions, limitations and other requirements of the Fund's
Declaration of Trust and By-Laws, both as amended.
In the event that securities, funds, and other properties remain in the
possession of State Street after the date of termination hereof owing to failure
of the Fund to procure the certified copy above referred to, or of the Fund's
Board of Trustees to appoint a Successor Custodian, State Street shall be
entitled to fair compensation for its services during such period and the
provisions of this Agreement relating to the duties and obligations of State
Street shall remain in full force and effect.
C. Duplicate Records and Backup Facilities. State Street shall
not be liable for loss of data, occurring by reason of circumstances beyond its
control, including but not limited to acts of civil or military authority,
national emergencies, fire, flood or catastrophe, acts of God, insurrection,
war, riots, or failure of transportation, communication or power supply.
However, State Street shall keep in a separate and safe place additional copies
of all records required to be maintained pursuant to this Agreement or
additional tapes, disks or other sources of information necessary to reproduce
all such records. Furthermore, at all times during this Agreement, State Street
shall maintain a contractual arrangement whereby State Street will have a
back-up computer facility available for its use in providing the services
required hereunder in the event circumstances beyond State Street's control
result in State Street not being able to process the necessary work at its
principal computer facility, State Street shall, from time to time, upon request
from the Fund provide written evidence and details of its arrangement for
obtaining the use of such a back-up computer facility. State Street shall use
its best efforts to minimize the likelihood of all damage, loss of data, delays
and errors resulting from an uncontrollable event, and should such damage, loss
of data, delays or errors occur, State Street shall use its best efforts to
mitigate the effects of such occurrence. Representatives of the Fund shall be
entitled to inspect the State Street premises and operating capabilities within
reasonable business hours upon reasonable notice to State Street, and, upon
request of such representative or representatives, State Street shall from time
to time as appropriate, furnish to the Fund a letter setting forth the insurance
coverage thereon, any changes in such coverage which may occur and any claim
relating to the Fund which State Street may have made under such insurance.
D. Confidentiality. State Street agrees to treat all records
and other information relative to the Fund confidentially and State Street on
behalf of itself and its officers, employees and agents agrees to keep
confidential all such information, except after prior notification to and
approval by the Fund (which approval shall not be unreasonably withheld and may
not be withheld where State Street may be exposed to civil or criminal contempt
proceedings), when requested to divulge such information by duly constituted
authorities or when so requested by a properly authorized person.
State Street and the Fund agree that they, their officers, employees
and agents shall maintain all information disclosed to them by the other in
connection with this Agreement in confidence and will not disclose any such
information to any other person, nor use such information for their own benefit
or for the benefit of third parties without the consent in writing of the other;
provided, however, that each party shall have the right to use any such
information for its own necessary internal purposes while this Agreement is in
effect. The provisions of the paragraph shall not apply to information which (i)
is in or becomes part of the public domain, or (ii) is demonstrably known
previously to the party to whom it is disclosed, or (iii) is independently
developed outside this Agreement by the party to whom it is disclosed or (iv) is
rightfully obtained from third parties by the party to whom it is disclosed.
10. The Fund shall not circulate any printed matter which contains any
reference to State Street without the prior written approval of State Street,
excepting solely such printed matter as merely identifies State Street as
Depository or Custodian. The Fund will submit printed matter requiring approval
to State Street in draft form, allowing sufficient time for review by State
Street and its counsel prior to any deadline for printing.
11. In the event of a reorganization of the Fund through a merger,
consolidation, sale of assets or other reorganization, State Street, at the
request of the Fund, shall act as Custodian for shares of any investment company
or other company obtained in any such reorganization by the Fund for
distribution to those Fund shareholders whose shares are represented by
certificates. The Fund shall give notice to each such shareholder of his or her
right to exchange his or her Fund shares represented by certificates for shares
held by State Street upon surrender to State Street of his or her certificates
representing such Fund shares properly endorsed and in proper form for transfer.
Upon the surrender of such Fund certificates State Street will issue a
certificate or certificates to the surrendering shareholder for an approximate
number of shares held by State Street, unless such shareholder establishes an
Open Account Plan or other similar account at that time in which case such
shares will be credited to his or her account. State Street shall not be
required to issue certificates for any fractional shares held by it. Instead,
fractional interests in such shares shall be distributed to the shareholder in
cash at their then current market value or, if the fractional share represents
an interest in an investment company, it shall be redeemed by State Street at
the then current redemption price for such shares and the proceeds of such
redemption shall be distributed to such shareholder in cash. State Street shall
not release to any shareholder any such shares held by it until such shareholder
has properly surrendered for exchange his or her Fund shares represented by
certificates.
12. This Agreement is executed and delivered in The Commonwealth of
Massachusetts and shall be subject to and be construed in accordance with the
laws of said Commonwealth.
13. Notices and other writings delivered or mailed postage prepaid to
Keystone America State Tax Free Fund - Series II, c/o Keystone Custodian Funds,
Inc., 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000 or to
State Street at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or to such
other address as the Fund or State Street may hereafter specify, shall be deemed
to have been properly delivered or given hereunder to the respective address.
14. This Agreement shall be binding upon and shall inure to the benefit
of the Fund and State Street and their respective successors or assigns.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
16. This Agreement is made on behalf of the Fund by an officer or
Trustee of the Fund, not individually but solely as an officer or Trustee under
the Fund's Declaration of Trust, and the obligations under this Agreement are
not binding upon, nor shall resort be had to the property of any of the
Trustees, shareholders, officers, employees or agents of the Fund personally,
but are binding only on the property of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by a duly authorized
officer as of the day and year first above written.
ATTEST: KEYSTONE AMERICA STATE TAX FREE
FUND - SERIES II
/s/ [Illegible] By: /s/ [Illegible]
------------------------------------- ---------------------------------
President
ATTEST: STATE STREET BANK AND TRUST COMPANY
/s/ [Illegible] By: /s/ [Illegible]
------------------------------------- ---------------------------------
Vice President
SCHEDULE A
State Street BANK AND TRUST COMPANY
Custodian Fee Schedule
KEYSTONE AMERICA STATE TAX FREE FUND - SERIES II
I. Administration
Custodian, Portfolio and Fund Accounting Service - Maintain custody of Fund
assets. Settle portfolio purchases and sales. Report buy and sell fails.
Determine and collect portfolio income. Make cash disbursements and report
cash transactions. Maintain investment ledgers, provide selected portfolio
transactions, position and income reports. Maintain general ledger and capital
stock accounts. Prepare daily trial balance. Calculate net asset value daily.
Provide from Fund approved pricing sources or vendors daily pricing for Fund
portfolio securities. Provide selected general ledger reports. Securities yield
or market value quotations for short term Fund portfolio securities will be
provided to State Street from a source designated by the Fund.
The administration fee shown below is an annual charge, billed and payable
monthly, based on average net assets and calculated in the same manner as the
Fund advisory and management fee.
ANNUAL FEES PER PORTFOLIO
Fund Net Assets Annual Fee
First $35 million 1/30 of 1%
Next $25 million 1/25 of 1%
Next $40 million 1/28 of 1%
Next $250 million 2/100 of 1%
Excess 1/100 of 1%
Global Custody Fee Annual Fee
Non-domestic 1/8 of 1% (.125%)
net assets
II. Portfolio Trades - For each line item processed
a. Depository Trust Company and Federal Reserve $10.00
Book - Entry System
b. PTC Settlements $20.00
c. New York Physical Settlements
Receive $24.00
Deliver $24.00
Transfer $ 6.00
Maturity $ 8.00
d. International Settlements $24.00
e. Options and All Other Trades $24.00
III. Holdings & Appraisal Charge
For each issue maintained -
monthly charge $ 5.00
Paydown on government securities -
monthly charge $ 5.00
Dividend charges (for items held at
the request of traders over record
date in street form) $50.00
IV. Out of Pocket Expense
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following:
Telephone
Wire charges ($5.25 per wire in and $5.00 out) Postage and insurance
Courier service Duplicating Legal fees Supplies related to Fund records
Rush transfer - $8.00 Transfer fees Sub-custodian charges Telex charges
Price Waterhouse audit letter Checkwriting ($.50 per check) Federal
Reserve Fee for
returned check items over $2,500 - $4.25
GNMA transfer - $15.00 each
V. Additional Accounting and Reporting Functions
$150.00 per month
SCHEDULE B
I. Operating Plan - Fund Custodian Services
1. Page 1
a) Trade instructions by tape input compatible with the
SPARK system will not be given.
b) System 34 terminals will not be provided for trade
input.
2. Page 2
a) Distributions will be charged against the custodian
account and credited to the disbursement account on
the payable date.
b) Reports - improved or new SPARK Reports will be made
available to the Fund at its request for no
additional cost, if made available at no additional
cost to other customers of State Street.
II. Fund Custodian Services
A. Page 1
1) The Fund will receive Custody and Full Accounting
Services.
B. Page 2
1) Polaris Fund Inc. is now Keystone International Fund
Inc.
III. Custodian Reports
A. Page 1
2) Analytics - SPARK information reports - the Funds
will receive none of these.
IV. KM - SSB Reports Comparison
A. Page 1 - MassCo Report
1) (9) Different form with similar content to be
prepared for Keystone Tax Free Fund (and Keystone Tax
Exempt Trust) rather than Master Reserves Trust
(MRT).
2) (12) To be prepared for all Funds.
3) (13) Trade Settlement Authorizations and all other
reports as provided to the Keystone Funds will be
provided MassCo Funds.
4) (26) Initial instructions in memo from Xx. Xxxxxx
Xxxxxx. Instructions may be changed from time to
time by Proper Instructions.
5) (30) Letter to be supplied by Keystone Investor
Resource Center, Inc.
6) (31) Report to be supplied by Keystone Investor
Resource Center, Inc.
B. Keystone Reports
1) (3) Information to be supplied by Open Order System.
2) (16) Will be prepared manually by State Street.
Calculations to be based on initial instructions
provided under (4) (26) memo.
3) (18) To be prepared by State Street.
4) (30) New SPARK Report to be provided the Funds.
5) (31) Pricing Quotes for foreign issues, restricted
securities and private placements not otherwise
available to State Street to be supplied by the Fund.
6) (46) KIMCO Reports unnecessary.
7) (58) State Street to prepare manually.
8) (57) Keystone to provide.
9) (70) New SPARK Report to be provided the Funds.
10) (73) SPARK Report to be provided the Funds.
11) (74) New SPARK Report and hard copy tape to be
provided the Funds.
12) (75) State Street to provide weekly report of fails
for each Fund.
13) All new SPARK reports must be reviewed and accepted
by the Funds before they will be considered to comply
with State Street's Custodian, Fund Accounting and
Recordkeeping Agreements with the Funds, such
acceptance not to be unreasonably withheld.
VI. Responses
I. Fund Custodian Services
a) Page 2
Checkwriting privilege is $.35 per check - charged only for
Keystone Liquid Trust at this time. Other Fund agreements to
be amended to include this charge if such privilege is ever
offered to shareholders of other Funds.
b) Page 3 (6) Individuals responsible for Fund services
may change as long as the quality of the personnel
is maintained.
c) Page 6 (11) State Street is liable for the acts of
its sub-custodians to the same extent that it is
liable for the acts of its agents.
II. Exhibits
1. Exhibit 1-2
a) (6) Notices of corporate actions shall include,
without limitation, notices of class actions and
bankruptcy actions in connection with issues held by
the Funds.
