CUSTODIAN CONTRACT
Between
U.S. MID-CAP PORTFOLIO
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. Employment of Custodian and Property to be
Held By It............................................... 1
2. Duties of the Custodian with Respect to Property of
the Portfolio Held by the Custodian in the
United States............................................ 1
2.1 Holding Investments................................. 1
2.2 Delivery of Investments............................. 2
2.3 Registration of Investments......................... 4
2.4 Bank Accounts....................................... 4
2.5 Availability of Federal Funds....................... 4
2.6 Collection of Income .... :........................... 5
2.7 Payment of Portfolio Monies......................... 5
2.8 Appointment of Agents............................... 6
2.9 Deposit of Investments in Securities System......... 7
2.10 Portfolio Assets Held in the Custodian's Direct
Paper System........................................ 7
2.11 Segregated Account................................. 8
2.12 Ownership Certificates for Tax Purposes............ 9
2.13 Proxies............................................ 9
2.14 Communications Relating to Portfolio Investments... 9
2.15 Reports to Portfolio by Independent Public
Accountants......................................... 9
3. Payments for Repurchases and Sales of Interests of
the Portfolio................................... 10
4. Proper Instructions............................. 10
5. Actions Permitted Without Express Authority..... 10
6. Evidence of Authority........................... 11
7. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income...................................... 11
8. Records......................................... 11
9. Opinion of Portfolio's Independent Accountant... 12
10. Compensation of Custodian....................... 12
TABLE OF CONTENTS
11. Responsibility of Custodian..................... 12
12. Tax Law...................................... 13
12.1 Tax Law of Cayman Islands............... 13
12.2 Tax Law of Other Jurisdictions.......... 13
13. Computerized Reporting Services.............. 14
13.1 Protection of Equipment, Confidential or
Proprietary Programs and Information............... 14
13.2 Portfolio Acknowledgment................ 15
14. Effective Period, Termination and Amendment.. 15
15. Successor Custodian.......................... 16
16. Interpretive and Additional Provisions....... 16
17. Massachusetts Law to Apply................... 17
18. Prior Contracts.............................. 17
19. Assignment................................... 17
20. Confidentiality.............................. 17
21. Notices...................................... 17
22. Effective Date............................... 18
23. Shareholder Communications................... 18
CUSTODIAN CONTRACT
This Contract between U.S. MID-CAP PORTFOLIO, a trust organized and
existing under the laws of New York, having its principal place of business at
Butterfield House, P.O. Box 2330, Grand Cayman, Cayman Islands, British West
Indies, hereinafter called the "Portfolio", and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of business
at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian".
WITNESSETH:
WHEREAS, the Portfolio is a diversified open-end investment company
which has been organized as a trust under the laws of New York; and
WHEREAS, the Portfolio desires to appoint the Custodian to act as custodian of
the assets of the Portfolio, and the Custodian desires to accept such
appointment;
WHEREAS, the Portfolio's assets are composed of money and property contributed
thereto by the holders of interests in the Portfolio ("Interests") entitled to
ownership rights in the Portfolio;
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
Pursuant to the authority contained in the Declaration of Trust the Portfolio
hereby employs the Custodian as the custodian of the assets of the Portfolio.
The Portfolio agrees to deliver to the Custodian or a sub-custodian all
investments and cash, all payments of interest, and payments of principal or
capital distributions received by it with respect to all investments from time
to time, and the cash consideration received by it for Interests as may be
issued or sold from time to time. The Custodian shall not be responsible for any
property of the Portfolio not received by it.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PORTFOLIO PROPERTY
HELD BY THE CUSTODIAN IN THE UNITED STATES
2.1 HOLDING INVESTMENTS. The Custodian shall hold and segregate
for the account of the Portfolio all non-cash property, to be
held by it in the United States, including all domestic
investments owned by the Portfolio, other than (a) investments
which are maintained pursuant to Section 2.9 in a clearing
agency which acts as a securities depository or in the
book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each, a "Securities
System") and (b) commercial paper of an issuer for which the
Custodian acts as issuing and paying agent ("Direct Paper")
which is deposited and/or maintained in the Direct Paper
System of the Custodian (the "Direct Paper System") pursuant
to Section 2.10.
2.2 DELIVERY OF INVESTMENTS.
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The Custodian shall release and deliver domestic investments owned by
the Portfolio held by the Custodian or in a Securities System account of the
Custodian or in the Custodian's Direct Paper book entry system account ("Direct
Paper System Account") only upon receipt of Proper Instructions (as defined
below), which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such investments for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such investments entered into on behalf of the Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.9 hereof;
4) To the depository agent, against a receipt, in connection with
tender or other similar offers for portfolio investments of the Portfolio;
5) To the issuer thereof or its agent, against a receipt, when such
investments are called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be delivered to
the Custodian;
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6) To the issuer thereof, or its agent, against a receipt, for transfer
into the name of the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent appointed pursuant
to Section 2.8; or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or number of
interests; PROVIDED that, in any such case, the new investments are to be
delivered to the Custodian;
7) Upon the sale of such investments for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any loss arising from
the delivery of such investments prior to receiving payment for such investments
except as may arise from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger, consolidation,
recapitalization, reorganization or readjustment of the investments of the
issuer of such investments, or pursuant to provisions for conversion contained
in such investments, or pursuant to any deposit agreement, against a receipt;
provided that, in any such case, the new investments and cash, if any, are to be
delivered to the Custodian;
9) In the case of warrants, rights or similar investments, the surrender thereof
in the exercise of such warrants, rights or similar investments or the surrender
of interim receipts or temporary investments for definitive investments;
provided that, in any such case, the new investments and cash, if any, are
concurrently delivered to the Custodian or against a receipt;
10) For delivery in connection with any loans of investments made on behalf of
the Portfolio, but ONLY against receipt of adequate forms of collateral as
agreed upon from time to time by the Portfolio or its delegate, which may be in
the form of cash or obligations issued by the United States government, its
agencies or instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Custodian's account in the book-entry
system, the Custodian will not be held liable or responsible for the delivery of
investments owned by the Portfolio prior to the receipt of such collateral;
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11) For delivery as security in connection with any borrowings by the
Portfolio requiring a pledge of assets of the Portfolio, BUT ONLY against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Portfolio, the Custodian and a broker-dealer which is 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 Portfolio;
13) For delivery in accordance with the provisions of any agreement
among the Portfolio, the Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Portfolio; and
14) For any other proper corporate purpose, BUT ONLY upon receipt of
Proper Instructions from the Portfolio, specifying the investments to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such investments shall be made.
2.3 REGISTRATION OF INVESTMENTS. Domestic investments held by the
Custodian (other than bearer investments) shall be registered in the name of the
Portfolio or in the name of any nominee of the Portfolio or of any nominee of
the Custodian which nominee shall be assigned exclusively to the Portfolio, or
in the name or nominee name of any agent appointed pursuant to Section 2.8. All
investments accepted by the Custodian on behalf of the Portfolio under the terms
of this Contract shall be in "street name" or other good delivery form. If,
however, the Portfolio directs the Custodian to maintain investments in "street
name", the Custodian shall utilize its best efforts only to timely collect
income due to the Portfolio on such investments and to notify the Portfolio on a
best efforts basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange offers.
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2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Portfolio,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for
the account of the Portfolio. Funds held by the Custodian for the
Portfolio may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
indeed, however, that each such bank or trust company and the funds to
be deposited with each such bank or trust company shall be approved by
the Portfolio. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only
in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between
the Portfolio and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions from the Portfolio, make
federal funds available to the Portfolio as of specified times
agreed upon from time to time by the Portfolio and the
Custodian in the amount of checks received in payment for
Interests which are deposited into the Portfolio's account.
2 . 6 COLLECTION OF INCOME. Subject to the provisions of Section @3,
the Custodian shall collect on a timely basis all income and other payments with
respect to United States investments held hereunder to which the Portfolio shall
be entitled either by law or pursuant to custom in the investments business, and
shall collect on a timely basis all income and other payments with respect to
United States bearer investments if, on the date of payment by the issuer,, such
investments are held by the Custodian or its agent thereof and shall credit such
income, as collected, to the Portfolio's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on investments held hereunder.
Income due the Portfolio on United States investments loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the Portfolio. The
Custodian will have no duty or responsibility in connection therewith, other
than to provide the Portfolio with such information or data as may be
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necessary to assist the Portfolio in arranging for the timely delivery
to the Custodian of the income to which the Portfolio is properly
entitled.
2.7 PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper Instructions from
the Portfolio, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall pay out monies of the
Portfolio in the following cases only:
1) Upon the purchase of domestic investments, including options,
futures contracts or options on futures contracts, for the account of
the Portfolio but only (a) against the delivery of such investments,
including evidence of title to such options, futures contracts or
options on futures contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the United States or abroad as
a custodian and has been designated by the Custodian as its agent for
this purpose) registered in the name of the Portfolio or in the name of
a nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions set
forth in Section 2.9 hereof or (c) in the case of a purchase involving
the Direct Paper System, in accordance with the conditions set forth in
Section 2.10; or (d) in the case of repurchase agreements entered into
between the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of the
investments either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with such
investments or (ii) against delivery of the receipt evidencing purchase
on behalf of the Portfolio of investments owned by the Custodian along
with written evidence of the agreement by the Custodian to repurchase
such investments from the Portfolio; or (e) for transfer to a time
deposit account of the Portfolio in any bank, whether domestic or
foreign or any savings and loan; such transfer may be effected prior to
receipt of a confirmation from a broker and/or the applicable bank or
savings and loan pursuant to Proper Instructions from the Portfolio as
defined in Article 4;
2) In connection with conversion, exchange or surrender of investments
owned by the Portfolio as set forth in Section 2.2 hereof;
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3) For payment of the amount of dividends received in respect of
investments sold short;
4 ) For any other proper purpose, BUT ONLY upon receipt of Proper
Instructions from the Portfolio, specifying the amount of such payment, setting
forth the purpose for which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons to whom such payment is
to be made.
In connection with the following type of expenses, the Custodian shall
make payments upon instructions from the Portfolio from an account of the
Portfolio controlled from outside of the United States:
5) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for the account
of the Portfolio: interest, taxes, management, accounting, transfer agent and
legal fees, and operating expenses thereof whether or not such expenses are to
be in
whole or part capitalized or treated as deferred expenses;
6) For the payment of any distributions by the Portfolio declared in
accordance with the Declaration of Trust.
2.8 APPOINTMENT OF AGENTS. Upon prior written notice to the Portfolio, the
Custodian may at any time or times in its discretion appoint (and may
at any time remove) any other bank or trust company to act as a
custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct.
2.9 DEPOSIT OF INVESTMENTS IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain domestic investments owned by the Portfolio in a
Securities System in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, if any,
and only to the extent applicable and subject to the following
provisions:
1) The Custodian may keep domestic investments of the Portfolio in a
Securities System provided that such investments are represented in an
account ("Account") of the Custodian in the Securities System which
shall not include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
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2 ) The records of the Custodian with respect to domestic investments
of the Portfolio which are maintained in a Securities System shall identify by
book-entry those investments belonging to the Portfolio;
3) The Custodian shall pay for domestic investments purchased for the
account of the Portfolio upon (i) receipt of advice from the Securities
System that such investments have been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Portfolio. The
Custodian shall transfer domestic investments sold for the account of
the Portfolio upon (i) receipt of advice from the Securities System
that payment for such investments has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Portfolio.
Copies of all advices from the Securities System of transfers of
domestic investments for the account of the Portfolio shall identify
the Portfolio, be maintained for the Portfolio by the Custodian and be
provided to the Portfolio at its request. The Custodian shall furnish
the Portfolio confirmation of each transfer to or from the account of
the Portfolio in the form of a written advice or notice and shall
furnish to the Portfolio copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the account of the
Portfolio;
4) The Custodian shall provide the Portfolio with any report obtained
BY the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding domestic investments
deposited in the Securities System.
2.10 PORTFOLIO ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM.
------------------------------------------------------------
The Custodian may deposit and/or maintain investments
owned by the Portfolio in the Direct Paper System of the
Custodian subject to the following provisions:
1) No transaction relating to investments in the Direct
Paper System will be effected in the absence of Proper
Instructions from the Portfolio;
2) The Custodian may keep investments of the Portfolio in the Direct
Paper System only if such investments are represented in an account of the
Custodian in the Direct Paper System which shall not include any assets of the
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2.11 SEGREGATED Account.
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to
investments of the Portfolio which are maintained in the
Direct Paper System shall identify by book-entry those
investments belonging to the Portfolio;
4) The Custodian shall pay for investments purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of investments to the
Account of the Portfolio. The Custodian shall transfer investments sold
for the account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Portfolio confirmation of each
transfer to or from the account of the Portfolio, 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 Portfolio copies of
daily transaction sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Portfolio with any report on its
system of internal accounting control as the Portfolio may reasonably
request from time to time.
The Custodian shall establish and maintain a segregated account or
accounts for and on behalf of the Portfolio, into which account or accounts
shall be transferred cash and/or investments, including investments maintained
in an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Portfolio, the
Custodian and a broker-dealer which is a member of the NASD (or any Futures
Commission Merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Commission or
any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Portfolio, (ii) for purposes of segregating cash or
government investments in connection with options purchased, sold or written by
the Portfolio or commodity futures
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contracts or options thereon purchased or sold by the Portfolio or
short-sales, (iii) for other proper corporate purposes.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for ail federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic investments of the Portfolio held by it and in connection
with transfers of such investments.
2.13 Proxies. The Custodian shall, with respect to the domestic
investments held hereunder, cause to be promptly executed by
the registered holder of such investments, if the investments
are registered otherwise than in the name of the Portfolio or
a nominee of the Portfolio, all proxies, without indication of
the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such
investments.
2.14 COMMUNICATIONS RELATING TO PORTFOLIO Investments. Subject to
the provisions of Section 2.3, the Custodian shall transmit
promptly to the Portfolio all written information (including,
without limitation, pendency of calls and maturities of
domestic investments and expirations of rights in connection
therewith and notices of exercise of call and put options
written by the Portfolio and the maturity of futures contracts
purchased or sold by the Portfolio) received by the Custodian
from issuers of the domestic investments being held for the
Portfolio. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Portfolio all written
information received by the Custodian from issuers of the
domestic investments whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action on behalf of
the Portfolio with respect to any tender offer, exchange offer
or any other similar transaction, the Portfolio shall notify
the Custodian at least three business days prior to the date
on which the Custodian is required to take such action;
however, the Custodian will use its best efforts to take such
action as promptly as the Portfolio may request.
2.15 REPORTS TO PORTFOLIO BY INDEPENDENT PUBLIC ACCOUNTANTS. The
Custodian shall provide the Portfolio, at such times as the Portfolio may
reasonably require, with reports by independent
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public accountants on the accounting system, internal accounting
control and procedures for safeguarding investments, including futures contracts
and options on futures contracts, including domestic investments deposited
and/or maintained in a Securities System, relating to the services provided by
the Custodian under this Contract; such reports shall be of sufficient scope and
in sufficient detail, as may reasonably be required by the Portfolio to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
3. PAYMENTS FOR REPURCHASES AND SALES OF INTERESTS
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust the Custodian shall, upon
receipt of instructions from the
Portfolio, make funds available to the Portfolio at an account of the
Portfolio controlled from outside of the United States for payment to
holders of Interests who have delivered to the Portfolio a request for
repurchase of their Interests.
4. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or initialled
on behalf of the Portfolio by one or more person or persons as the
Portfolio shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction
involved. Oral instructions will be considered Proper Instructions if
the Custodian reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction
involved. The Portfolio shall cause all oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Portfolio
accompanied by a detailed description of procedures approved by the
Portfolio, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that
the Portfolio and the Custodian are satisfied that such procedures
afford adequate safeguards for the Portfolio's assets. For purposes of
this Section, Proper Instructions shall include instructions received
by the Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.11.
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ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Portfolio:
1) make payments to others for minor transactional expenses of handling
investments or other similar items relating to its duties under this Contract,
PROVIDED that all such payments shall be accounted for to the Portfolio;
2 ) surrender investments in temporary form for investments in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the investments and property of the Portfolio except as otherwise directed
by the Portfolio.
6. EVIDENCE OF AUTHORITY
The Custodian 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 have been properly executed by or on behalf of the Portfolio.
The Custodian may receive and accept a certified copy of an instruction
of the Portfolio as conclusive evidence (a) of the authority of any
person to act in accordance with such instruction or (b) of any
determination or of any action by the Portfolio pursuant to the
Declaration of Trust as described in such instruction, and such
instruction may be considered as in full force and effect until receipt
by the Custodian of written notice to the contrary.
7. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT
AND CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information
to the entity or entities appointed by the
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Portfolio to keep the books of account of the Portfolio and/or compute
the net asset value per share of the outstanding Interests.
8. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will
meet the obligations of the Portfolio. All such records shall be the
property of the Portfolio and shall at all times during the regular
business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Portfolio.
9. OPINION OF PORTFOLIO'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Portfolio may
from time to time request, to obtain from year to year favorable
opinions from the Portfolio's independent accountants provided that the
books and records of the Portfolio shall be audited outside of the
United States.
10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between the Portfolio and the Custodian.
11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it
or delivered by it pursuant to this Contract and shall be held harmless
in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by
the proper party or parties, including any futures commission merchant
acting pursuant to the terms of a three-party futures or options
agreement. The Custodian shall be held to the exercise of reasonable
care in carrying out the provisions of this Contract. It shall be kept
indemnified by and shall be without liability to the Portfolio for any
action taken or omitted by it in good faith without
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negligence. The Portfolio hereby agrees to indemnify and hold harmless the
Custodian from and against any and all costs, expenses, losses, damages,
charges, counsel fees, payments and liabilities which may be asserted against
the Custodian arising out of any failure of the Portfolio to comply with the
United States investments laws. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Portfolio) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to sub-custodians
generally in this Contract and, regardless of whether assets are maintained in
the custody OF a foreign banking institution, a foreign securities depository or
a branch of a U.S. bank, the Custodian shall not be liable for any loss, damage,
cost, expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where the
sub-custodian has otherwise exercised reasonable care.
If the Portfolio requires the Custodian to take any action with respect to
investments, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Portfolio being liable for the payment of money or incurring liability of
some other form, the Portfolio, as a prerequisite to requiring the Custodian to
take such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Portfolio requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or investments for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) for
the benefit of the Portfolio or in the event that the Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract with respect to
the Portfolio, 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 Portfolio shall be security therefor and should the
Portfolio fail to repay the Custodian promptly, the Custodian shall be entitled
to
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utilize available cash and to dispose of the Portfolio's assets to the
extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect,
special or consequential damages.
12. TAX LAW
12.1 TAX LAW OF CAYMAN ISLANDS. The Custodian shall have no
responsibility or liability for any obligations now or hereafter imposed on the
Portfolio or the Custodian as custodian of the Portfolio's assets by the tax law
of Cayman Islands or any state or political subdivision thereof.
The Custodian shall be kept indemnified by and be without liability to
the Portfolio to the extent of the assets of the Portfolio for any such
obligations including taxes, withholding and reporting requirements, claims for
exemption or refund, additions for late payment, interest, penalties and other
expense (including legal expenses) that may be assessed against the Portfolio or
the Custodian as custodian of the Portfolio.
12.2 Tax Law OF OTHER JURISDICTIONS. It shall be the responsibility of
the Portfolio (except taxes attributable to the domicile of the Custodian in
Massachusetts and in such case the Custodian shall notify the Portfolio) to
notify the Custodian of the obligations imposed on the Portfolio by the tax law
of jurisdictions other than those mentioned in Section 13.1. The Custodian shall
use its best efforts to assist the Portfolio with respect to any claim for
exemption or refund under the tax law of jurisdictions for which the Portfolio
has provided such information. Nevertheless, the Custodian shall be kept
indemnified by and shall be without liability to the Portfolio for any such
obligations of which it has not been notified in writing by the Portfolio, or
for which it has received directions to not withhold U.S. taxes, including
taxes, withholding and reporting requirements, claims for exemptions or refund,
additions for late payment, interest, penalties and other expenses (including
legal expenses) that may be assessed against the Portfolio or the Custodian as
custodian of the Portfolio.
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13. COMPUTERIZED REPORTING SERVICES
13.1 PROTECTION OF EQUIPMENT, CONFIDENTIAL OR PROPRIETARY PROGRAMS
AND INFORMATION. The Portfolio agrees to use the equipment,
computer programs and other information supplied by the
Custodian under this Contract solely for its own internal use
and benefit and not for resale or other transfer or
disposition to, or use by or for the benefit of, any other
person or organization without the prior written approval of
the Custodian.
The Portfolio acknowledges that the data bases, computer
programs, screen formats, screen designs, report formats,
interactive design techniques, and other information furnished
to the Portfolio by the Custodian constitute copyrighted trade
secrets or proprietary information of substantial value to the
Custodian. Such data bases, programs and other information are
collectively referred to below as "Proprietary Information".
The Portfolio agrees that it shall treat all Proprietary
Information as proprietary to the Custodian and that it shall
not divulge any Proprietary Information to any person or
organization except as expressly permitted hereunder.
Without limiting the foregoing, the Portfolio agrees for
itself and its employees and agents:
1) to use such programs and data bases (i) solely on the Custodian's
computers, (ii) solely from equipment at Portfolio locations agreed to between
the Portfolio and the Custodian and (iii) solely in accordance with the
Custodian's applicable user documentation;
2) to use equipment supplied by the Custodian solely with programs
supplied by the Custodian and no other programs or software;
3) to refrain from copying or duplicating in any way (other than in the
normal course of performing processing on Custodian's computers) any part of any
Proprietary Information;
4) to refrain from obtaining unauthorized access to any programs, data
or other information not owned by the Portfolio, and if such access is
accidentally obtained, to respect and safeguard the same as Proprietary
Information;
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5) to refrain from causing or allowing information transmitted from the
Custodian's computer to the Portfolio's terminals to be retransmitted to another
computer, terminal or other device;
6) that the Portfolio shall have access to only those authorized
transactions as agreed to between the Portfolio and the Custodian;
7) to honor reasonable written requests made by the Custodian to
protect at the Custodian's expense the rights of the Custodian in Proprietary
Information at common law, under the Federal copyright statutes and under other
Federal and state statutes.
13.2 PORTFOLIO ACKNOWLEDGMENT. The Portfolio hereby acknowledges that
the data and information it will be accessing from Custodian is unaudited and
may not be accurate due to inaccurate pricing of securities, delays of a day or
more in updating the Account and other causes for which Custodian will not be
liable to the Portfolio.
14. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party such termination to take effect, in the case
of a termination by the Portfolio, not sooner than thirty (30) days after the
date of such delivery or mailing, and, in the case of a termination by the
Custodian, not sooner than ninety (90) days after the date of such delivery
or mailings.
Upon termination of the Contract, the Portfolio shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements. The parties agree that a notification of termination of the
Portfolio shall serve as a notification of termination of the Custodian.
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15. SUCCESSOR CUSTODIAN
If a successor custodian for the Portfolio shall be appointed by the
Portfolio, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all investments of the Portfolio then held by it hereunder and shall
transfer to an account of the successor custodian all of the investments of the
Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a instruction of the
Portfolio, deliver at the office of the Portfolio such investments, funds and
other properties in accordance with such instruction.
In the event that no written order designating a successor custodian or
certified copy of an instruction of the Portfolio shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a bank 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 $100,000,000, all investments,
funds and other properties held by the Custodian on behalf of the Portfolio and
all instruments held by the Custodian relative thereto and all other property
held by it under this Contract on behalf of the Portfolio and to transfer to an
account of such successor custodian all of the investments of the Portfolio held
in any Securities System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Contract.
In the event that investments, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Portfolio to procure the certified copy of the instruction
referred to or of the Portfolio to appoint a successor custodian, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such investments, funds and other properties
and the provisions of this Contract relating to the duties and obligations of
the Custodian shall remain in full force and effect.
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16. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and
the Portfolio, may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
17. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
18. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Portfolio and the Custodian relating to the custody
of the Portfolio's assets.
19. ASSIGNMENT
This Contract may not be assigned BY the Custodian without the written
consent of the Portfolio.
20. CONFIDENTIALITY
None of the parties hereto shall, unless compelled to do so by any
court of competent jurisdiction either before or after the termination of this
Contract, disclose to any person not authorized BY the relevant party to receive
the same any information relating to such party and to the affairs of such party
of which the party disclosing the same shall have become possessed during the
period of this Contract and each party shall use its best endeavors to prevent
any such disclosure as aforesaid.
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21. NOTICES
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set forth
herein during normal business hours or delivered prepaid registered mail or by
telex, cable or telecopy to the parties at the following addresses or such other
addresses as may be notified by any party from time to time.
TO THE PORTFOLIO:
U.S. MID-CAP PORTFOLIO
Butterfield House
P.O. Box 2330
Grand Cayman, Cayman Islands British West Indies
Attn: Managing Director
TO THE CUSTODIAN:
STATE STREET BANK AND TRUST COMPANY
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
TO THE ADVISOR:
XXXXX BROTHERS XXXXXXXX & CO.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof - Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
22. EFFECTIVE Date
This Agreement shall be effective as of January 17, 1995.
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23. SHAREHOLDER COMMUNICATIONS
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by
issuers of securities for the names, addresses and holdings of
beneficial owners of securities of that issuer held by the bank unless
the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the
Portfolio to indicate whether it authorizes the Custodian to provide
the Portfolio's name, address, and share position to requesting
companies whose securities the Portfolio owns. if the Portfolio tells
the Custodian "no", the Custodian will not provide this information to
requesting companies. If the Portfolio tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by
the rule to treat the Portfolio as consenting to disclosure of this
information for all securities owned by the Portfolio or any funds or
accounts established by the Portfolio. For the Portfolio's protection,
the Rule prohibits the requesting company from using the Portfolio's
name and address for any purpose other
than corporate communications. Please indicate below whether the
Portfolio consents or objects by checking one of the alternatives
below.
YES The Custodian is authorized to release the Portfolio's name,
address, and share positions.
NO[X] The Custodian is not authorized to release the Portfolio's
name, address, and share positions.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative as of
November 3, 1997.
U.S. MID-CAP PORTFOLIO
By: /S/XXXXX XXXXXXXXX
Title: Assistant Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /S/XXXXXX X. XXXXX
Title: EXECUTIVE VICE PRESIDENT
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