CUSTODIAN CONTRACT
BETWEEN
FGIC PUBLIC TRUST
AND
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, N.A.
TABLE OF CONTENTS
Page
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1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian with Respect to Property
of the Funds Held by the Custodian 2
2.1 Holding Securities 2
2.2 Delivery of Securities 3
2.3 Registration of Securities 8
2.4 Bank Accounts 9
2.5 Payments for Shares 9
2.6 Availability of Federal Funds 10
2.7 Collection of Income 10
2.8 Payment of Monies 11
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased 14
2.10 Payments for Repurchases or Redemptions
of Shares of a Fund 14
2.11 Appointment of Agents 15
2.12 Deposit of Fund Assets in Securities Systems 15
2.12A Fund Assets Held in the Custodian's Direct Paper System 18
2.13 Segregated Account 20
2.14 Ownership Certificates for Tax Purposes 21
2.15 Proxies 21
2.16 Communications Relating to Fund Portfolio Securities 22
2.17 Proper Instructions 22
2.18 Actions Permitted Without Express Authority 23
2.19 Evidence of Authority 24
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 25
4. Records 25
5. Opinion of Trust's Independent Accountant 26
6. Reports to Trust by Independent Public Accountants 26
7. Compensation of Custodian 27
8. Responsibility of Custodian 27
9. Effective Period, Termination and Amendment 28
10. Successor Custodian 30
11. Interpretive and Additional Provisions. 32
12. Massachusetts Law to Apply 32
13. Prior Contracts 32
14. Names 32
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CUSTODIAN CONTRACT
This Contract between FGIC Public Trust, a business trust organized and
existing under the laws of Delaware, having its principal place of business at
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, hereinafter called
the "Trust" and State Street Bank and Trust Company of Connecticut, N.A., having
its principal place of business at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxxxxxxx, hereinafter called the "Custodian",
WITNESSETH, that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
The Trust hereby employs the Custodian as the custodian of the assets of
its Treasury Money Market Fund and its Enhanced Government Income Fund, ("the
Funds"), pursuant to the provisions of the Declaration of Trust. The parties
contemplate that the Custodian may act as custodian of additional funds to be
offered by the Trust from time to time to be designated by the parties hereto
and made subject to this Agreement. The Trust agrees to deliver to the Custodian
all securities and cash owned by the Funds, and all payments of income, payments
of principal or capital distributions received by the Funds with respect to all
securities owned by them from time to time, and the cash consideration received
by them for such new or treasury shares of capital stock ("Shares") of the Funds
as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Funds held or received by the Funds and not
delivered to the Custodian.
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Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the Board of Trustees of the
Trust, and provided that the Custodian shall have no more or less responsibility
or liability to the Funds on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
The parties may from time to time execute documents to appoint State Street
Bank and Trust Company as custodian of funds other than the Funds.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUNDS HELD BY
THE CUSTODIAN.
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of a Fund all non-cash property, including all securities owned
by the Fund, other than (a) securities which are maintained pursuant to Section
2.12 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury,
collectively referred to herein as a "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as issuing
and paying agent ("Direct Paper") which is deposited and/or maintained in the
Direct Paper System of the Custodian pursuant to Section 2.12A. THE CUSTODIAN
WILL USE ITS BEST EFFORTS TO ENSURE THAT THE SPECIFIC SECURITIES HELD BY IT
HEREUNDER WILL BE IDENTIFIABLE AS FUND ASSETS AT ALL TIMES. THE CUSTODIAN WILL
USE THE SAME CARE WITH RESPECT TO THE SAFEKEEPING OF AND NON-CASH PROPERTY HELD
BY IT HEREUNDER AS IT USES WITH RESPECT TO ITS OWN SIMILAR PROPERTY.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities owned by each Fund 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 Account") only upon receipt
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of Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of a Fund and receipt of
payment therefor;
2) Upon the receipt of payment in connection with any repurchase agreement
related to such securities entered into by a Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for portfolio securities of a Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any such
case, the cash or other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of a
Fund or into the name of any nominee or nominees of the Custodian or into
the name or nominee name of any agent appointed pursuant to Section 2.11 or
into the name or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against receipt, for examination in
accordance with "street delivery" custom; provided that in any such case,
the Custodian shall have no responsibility or liability for any loss
arising from the delivery of such securities prior to receiving
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payment for such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or
the surrender of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by a Fund,
but only against receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Trust, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for which
collateral is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the Custodian
will not be held liable or responsible for the delivery of securities owned
by a Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by a Fund
requiring a pledge of assets by the Fund, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any agreement among a
Fund, the Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934
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("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 owner arrangements in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement among a
Fund, the Custodian, and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding account deposits in
connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer Agent")
for a Fund, for delivery to such Transfer Agent or to the holders of shares
in connection with distributions in kind, as may be described from time to
time in the Fund's currently effective prospectus and statement of
additional information ("prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption;
15) For any other proper Trust purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant Secretary, specifying
the securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such
securities shall be made: and
16) Upon termination of this Contract as set forth in Section 10 hereunder.
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2.3 REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of each appropriate Fund
or in the name of any nominee of the Fund or of any nominee of the Custodian
which nominee shall be assigned exclusively to the Fund, unless the Trust has
authorized in writing for a particular Fund the appointment of a nominee to be
used in common with other registered investment companies having the same
investment adviser as such Fund, or in the name or nominee name of any agent
appointed pursuant to Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All securities accepted by the
Custodian on behalf of each Fund under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Trust directs the
Custodian to maintain the securities of a particular Fund in "street name," the
Custodian shall utilize its best efforts only to timely collect income due that
Fund on such securities and to notify the Trust on a best efforts basis of
relevant corporate actions including, without limitation, tendency of calls,
maturities, tender or exchange offers. IF SECURITIES UPON WHICH INCOME IS
PAYABLE TO A PARTICULAR FUND ARE IN DEFAULT OR PAYMENT ON SUCH SECURITIES IS
REFUSED AFTER DUE DEMAND OR PRESENTATION BY THE CUSTODIAN. THE CUSTODIAN SHALL
NOTIFY THE TRUST IN WRITING OF SUCH OCCURRENCE WITHIN ONE BUSINESS DAY FOLLOWING
THE DAY ON WHICH THE CUSTODIAN FIRST BECOMES AWARE OF SUCH DEFAULT OR REFUSAL,
PROVIDED THAT SUCH NOTIFICATION SHALL NOT NEGATE THE CUSTODIAN'S OBLIGATION TO
USE ITS BEST EFFORTS TO COLLECT SUCH INCOME.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of each Fund, subject only to draft or order by
the Custodian acting pursuant to the terms of this Contract, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received by
it from or for the account of a Fund, other than cash
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maintained by a Fund in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940. Funds held by the Custodian
for a Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; PROVIDED, however, that every
such bank or trust company shall be qualified to act as a custodian under the
Investment Company-Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall be approved by
vote of a majority of the Board of Trustees of the Trust. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity. THE CUSTODIAN WILL USE THE
SAME CARE WITH RESPECT TO THE SAFEKEEPING OF ANY CASH MAINTAINED BY IT HEREUNDER
AS IT USES WITH RESPECT TO ITS OWN CASH ASSETS.
2.5 PAYMENTS FOR SHARES. The Custodian shall receive from the distributor
for each Fund's Shares or from the Transfer Agent of each Fund and deposit into
a Fund's account such payments as are received for Shares of a Fund issued or
sold from time to time by a Fund. The Custodian will provide timely notification
to each Fund and the Transfer Agent of any receipt by it of payments for Shares
of a Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Trust
and the Custodian, the Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to a particular Fund as of specified times agreed
upon from time to time by the Trust and the Custodian in the amount of checks
received in payment for Shares of such Fund which are deposited into the Fund's
account.
2.7 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments with
respect to registered securities held
9
hereunder to which each Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to each appropriate Fund's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due a particular Fund on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the particular Fund. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Fund involved
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Fund is properly entitled.
2.8 PAYMENT OF MONIES. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of each Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or options
on futures contracts for the account of the Fund involved but only (a)
against the delivery of such securities or evidence of title to such
options, futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the Investment Company Act
of 1940, as amended, to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the Fund
or in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the
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case of a purchase effected through a Securities System, in accordance with
the conditions set forth in Section 2.12 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.12A; (d) in the case of repurchase
agreements entered into between the Fund and the Custodian, or another
bank, or a broker-dealer against delivery of the securities either in
certificate form or through an entry crediting the Custodian's account at
the Federal Reserve Bank with such securities or (e) for IMMEDIATE transfer
to a time deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper Instructions
from the Trust as defined in Section 2.17;
2) In connection with conversion, exchange or surrender of securities owned
by a Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by a Fund as set forth
in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by a Fund,
including. but not limited to the following payments for the account of the
Fund: interest, taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Fund whether or not such expenses are
to be in whole or part capitalized or treated as deferred expenses; For the
payment of any dividends declared pursuant to the governing documents of a
Fund and the Trust;
6) For payment of the amount of dividends received in respect of securities
sold short;
7) For any other proper purpose, but only upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of
Trustees or of the Executive
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Committee of the Trust signed by an officer of the Trust and certified by
its Secretary or an Assistant Secretary, specifying the amount of such
payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made; and
8) UPON TERMINATION OF THIS CONTRACT AS SET FORTH IN ARTICLE 10 HEREUNDER.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and every case
where payment for purchase of securities for the account of a Fund is made by
the Custodian in advance of receipt of the securities purchased in the absence
of specific written instructions from the Trust to so pay in advance, the
Custodian shall be absolutely liable to such Fund for such securities to the
same extent as if the securities had been received by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF A FUND. From such
funds as may be available for the purpose but subject to the limitations of the
Declaration of Trust and any applicable votes or resolutions of the Board of
Trustees of the Trust pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of each Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of a Fund, the Custodian shall honor checks drawn on the
Custodian by a holder of Shares, which checks have been furnished by the Trust
to the holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Trust and the Custodian.
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2.11 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
which is itself qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Section 2 as the Custodian may from time to time direct; PROVIDED, however, that
the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by each Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities System"
in accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and Subject to the following
provisions:
1) The Custodian may keep securities of a Fund in a Securities System
provided that such securities 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;
2) The records of the Custodian with respect to securities of a Fund which
are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of a
Fund OR SHALL PAY CASH COLLATERAL AGAINST THE RETURN OF SECURITIES LOANED
BY A 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 the Custodian to reflect such payment and
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transfer for the account of the Fund. The Custodian shall transfer
securities sold OR LOANED for the account of a 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 the Custodian to reflect such transfer and payment for the account of
the Fund. Copies of all advice from the Securities System of transfers of
securities for the account of a Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be provided to the Trust at its request.
Upon request, the Custodian shall furnish the Trust confirmation of each
transfer to or from the account of a Fund in the form of a written advice
or notice and shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the account
of the Fund.
4) The Custodian shall provide the Trust with any report obtained by the
Custodian on the Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received the initial or annual certificate, as
the case may be, required by Section 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the Custodian
shall be liable to a Fund for any loss or damage to the Fund resulting from
use of the Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or their
employees or from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities System; at
the election of the Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the Securities
System or any other person which the
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Custodian may have as a consequence of any such loss or damage if and to
the extent that the Fund has not been made whole for any such loss or
damage.
2.12A FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The
Custodian may deposit and/or maintain securities owned by each Fund in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will be
effected in the absence of Proper Instructions, nor unless the Custodian
shall have received the initial or annual certificate, as the case may be,
required by Section 9 hereof;
2) The Custodian may keep securities of a Fund in the Direct Paper System
only if such securities are represented in an account ("Account") of the
Custodian in the Direct Paper System which shall not include any assets of
the Custodian other than assets held as a fiduciary, custodian or otherwise
for customers;
3) The records of the Custodian withrespect to securities of a Fund which
are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of a
Fund upon the making of an entry on the records of the Custodian to reflect
such payment and transfer of securities to the account of the Fund. The
Custodian shall transfer securities sold for the account of a Fund upon the
making of an entry on the records of the Custodian to reflect such transfer
and receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Trust confirmation of each transfer to
or from the account of a 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 Trust copies of daily
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transaction sheets reflecting each day's transaction in the Securities
System for the account of the Fund;
6) The Custodian shall provide the Trust with any report on its system of
internal accounting control as the Trust may reasonably request from time
to time.
2.13 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of any Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.12 hereof, (i) in accordance with the provisions
of any agreement among the Trust, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by a
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by a Fund or commodities
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purpose of compliance by a Fund with the procedures RECOMMENDED by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other proper
Trust 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 or of Executive Committee signed by an officer of the Trust and
certified by the Secretary or an Assistant Secretary, setting
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forth the purpose or purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to
securities of each Fund held by it and in connection with transfers of
securities.
2.15 PROXIES. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of a
Fund or a nominee of a Fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to each Fund such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the Trust
for each applicable Fund all written information (including, without limitation,
pendency of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
a particular Fund and the maturity of futures contracts purchased or sold by a
particular Fund) received by the Custodian from issuers of the securities being
held for a particular Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust for each applicable Fund all
written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If a Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Trust shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
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2.17 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Contract means writing signed or initialled by one or more person or persons as
the Board of Trustees shall have from time to time authorized. Each such writing
shall set forth the specific transaction or type of transaction involved,
including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Trust shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the authorization
by the Board of Trustees of the Trust accompanied by a detailed description of
procedures approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied that
such procedures afford adequate safeguards for each Fund's assets. For purposes
of this Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.13.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Trust PRIOR TO RECEIVING A
CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY CONTAINING A CONTRARY
DIRECTION OF THE BOARD OF TRUSTEES:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, PROVIDED that all such payments shall be CHARGED AGAINST AND
accounted for to the Fund involved;
2) surrender securities in temporary form for securities in definitive
form;
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3) endorse for collection, in the name of each applicable Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of each Fund except as otherwise directed
by the Board of Trustees of the Trust.
2.19 EVIDENCE OF AUTHORITY. SUBJECT TO THE PROVISIONS OF SECTION 8. 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 a Fund. The
Custodian may receive and accept a certified copy of a vote or resolution of the
Board of Trustees of the Trust as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or resolution or (b) of any
determination or of any action by the Board of Trustees pursuant to the Amended
and Restated Declaration of Trust as described in such vote or resolution, and
such vote or resolution may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION
OF NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Trust to keep the
books of account of the Funds and/or compute the net asset value per share of
the outstanding shares of each Fund or, if directed in writing to do so by the
Trust, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of each Fund as described in a Fund's currently effective prospectus
and shall advise the Trust and the Transfer Agent daily of the total amounts of
such net income and, if instructed in
19
writing by an officer of the Trust to do so, shall advise the Transfer Agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of the
Funds shall be made at the time or times described from time to time in each
respective Fund's currently effective prospectus. ADDITIONALLY. THE CUSTODIAN
WILL ASSIST GENERALLY IN THE PREPARATION OF REPORTS TO FUND SHAREHOLDERS AND
OTHERS AND PERFORM SIMILAR MINISTERIAL MATTERS.
4. 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 Funds under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-l and 31a-2 thereunder,
AND OTHER APPLICABLE FEDERAL AND STATE LAWS. ADMINISTRATIVE RULES AND
PROCEDURES. All such records shall be the property of the Trust 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 Trust and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Trust's request, supply the Trust with a tabulation of securities owned by the
Funds and held by the Custodian and shall, when requested to do so by the Trust
and for such compensation as shall be agreed upon between the Trust and the
Custodian, include certificate numbers in such tabulations.
5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT.
The Custodian shall take all reasonable action, as the Trust may from time
to time request, to obtain from year to year favorable opinions from the Trust's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Trust's Forms
20
N-1A, and Forms N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail as may reasonably be required by the
Trust 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.
7. COMPENSATION OF CUSTODIAN.
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as SET FORTH IN EXHIBIT A, and.agreed upon from time
to time between the Trust and the Custodian.
8. RESPONSIBILITY OF CUSTODIAN.
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of a three party
futures or options agreement. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this
21
Contract, but shall be kept indemnified by and shall be without liability to a
Fund for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel WHO IS
REASONABLY SATISFACTORY TO THE TRUST (who may be counsel for the Trust) on all
matters, and shall be without liability for any action reasonably taken or
omitted IN GOOD FAITH pursuant to such advice.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
a Fund being liable for the payment of money or incurring liability of some
other form, the Fund involved, as a prerequisite to requiring the Custodian to
take such action, shall provide UPON WRITTEN REQUEST FROM THE CUSTODIAN
indemnity to the Custodian in an amount and form satisfactory to it.
If the Trust requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act, willful misconduct OR
BAD FAITH, any property at any time held for the account of the Fund involved
shall be security therefor and should that Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of assets only of that Fund to the extent necessary to obtain
reimbursement.
9. 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
22
of the parties hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than SIXTY (60) DAYS after the date of
such delivery or mailing; PROVIDED, however that the Custodian shall not act
under Section 2.12 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Trustees of the Trust
has approved the initial use of a particular Securities System for a particular
Fund and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by a particular Fund
of such Securities System, as required in each-case by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not act
under Section 2.12A 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 for a particular Fund and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has reviewed the use by a particular Fund of the
Direct Paper System; PROVIDED FURTHER, however, that the Trust shall not amend
or terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust of the Trust as from
time to time in effect, and further provided, that the Trust may at any time by
action of its Board of Trustees (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction OR UPON THE CUSTODIAN'S NO LONGER
BEING QUALIFIED TO ACT AS THE FUNDS' CUSTODIAN UNDER APPLICABLE LAW.
23
Upon termination of the Contract, the Trust 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 ACCRUED PRIOR
TO TERMINATION.
10. SUCCESSOR CUSTODIAN.
If a successor custodian shall be appointed by the Board of Trustees of the
Trust, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, ALL SECURITIES (DULY ENDORSED AND IN
THE FORM FOR TRANSFER), FUNDS AND OTHER PROPERTY HELD BY IT HEREUNDER AND ALL
OTHER INSTRUMENTS AND RECORDS RELATIVE TO SUCH SECURITIES FUNDS AND OTHER
PROPERTY, and shall transfer to an account of the successor custodian all of the
Funds' securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of Trustees
of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties, AND ALL OTHER INSTRUMENTS AND RECORDS
RELATIVE THERETO, in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, AND
IS OTHERWISE QUALIFIED TO ACT AS THE FUNDS' CUSTODIAN UNDER THE INVESTMENT
COMPANY ACT OF 1940 AND OTHER APPLICABLE LAW, doing business in Boston,
Massachusetts, of its own selection, (UPON PROPER NOTIFICATION OF THE TRUST),
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all securities, funds and
other properties held by the
24
Custodian and all instruments held by the Custodian relative thereto and all
other property AND RECORDS held by it under this Contract and to transfer to an
account of such successor custodian all of the Funds' securities held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Contract, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Trust. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
12. 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.
25
13. PRIOR CONTRACTS.
This Contract supersedes and terminates, as of the date hereof, any prior
contracts between the Trust and the Custodian relating to the custody of the
Funds' assets.
14. NAMES.
The names "FGIC Public Trust" and "Trustees of FGIC Public Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated and as may be amended from time to time which is hereby referred to
and a copy of which is on file at the office of the State Secretary of the State
of Delaware and the principal office of the Trust. The obligations of "FGIC
Public Trust" entered into in the name or behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the Trust property, and all persons dealing with
any class of shares of the Trust must look solely to the Trust property
belonging to such class for the enforcement of any claims against the Trust. The
Shareholders of the Trust shall not be personally liable for any obligations or
liabilities of the Trust, any Fund or any series of Shares of any Fund.
26
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 6th day of May, 1994.
ATTEST FGIC PUBLIC TRUST
By:
------------------------- ------------------------
Vice President and Treasurer
ATTEST State Street Bank & Trust Co.
Of Connecticut, N.A.
By:
------------------------- ------------------------
Vice President
00
XXXXX XXXXXX XXXX AND TRUST COMPANY
FEE SCHEDULE FOR:
FGIC Public Trust
Domestic Custodian Fee Schedule
--------------------------------------------------------------------------------
I. U.S. CUSTODY SERVICES
--------------------------------------------------------------------------------
Maintain custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income.
Make cash disbursement and report cash transactions. Coordinate
currency settlements.
FUND NET ASSETS
First $350 million 1 basis point
Next $300 million 0.75 basis points
Excess $650 million 0.50 basis points
There is a minimum monthly charge per fund of $2,000
--------------------------------------------------------------------------------
II. PORTFOLIO TRANSACTIONS
--------------------------------------------------------------------------------
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $10.00
New York Physical Settlements $25.00
Maturity Collections $ 8.00
PTC Purchase, Sale, Deposit or Withdrawal $20.00
Foreign Trades - Euro CD & Time Deposits $25.00
All Other Trades $16.00
--------------------------------------------------------------------------------
III. OPTIONS
--------------------------------------------------------------------------------
Option charges for each option written or
closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
--------------------------------------------------------------------------------
IV. INTEREST RATE FUTURES
--------------------------------------------------------------------------------
Transactions - no security movement $ 8.00
--------------------------------------------------------------------------------
V. PRINCIPAL REDUCTION PAYMENTS
--------------------------------------------------------------------------------
Per Pay Down $10.00
--------------------------------------------------------------------------------
VI. DIVIDEND CHARGES
--------------------------------------------------------------------------------
For items held at the request of traders over
record date in street form $50.00
--------------------------------------------------------------------------------
VII. SPECIAL SERVICES
--------------------------------------------------------------------------------
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments and
the preparation of special reports will be subject to negotiation.
Fees for SEC yield calculation, fund administration activities, self
directed securities lending transactions, XxXxXx financial reporting,
multiple class and core/feeder accounting, and other special items will
be negotiated separately.
--------------------------------------------------------------------------------
VIII. BALANCE CREDITS
--------------------------------------------------------------------------------
A balance credit will be applied to the custodian xxxx for 75% of the
90-day Treasury Xxxx rate on 90% of the monthly average collected
balance for each portfolio. The balance credit cannot exceed the
custody fee portion of the monthly xxxx. Balance credit balances can
roll forward to the next month. No balance credit balance will be
allowed to roll forward at each fiscal year end.
--------------------------------------------------------------------------------
IX. OUT-OF-POCKET EXPENSES
--------------------------------------------------------------------------------
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 in and $5 out)
- Postage and Insurance
- Courier Service
- Duplication
- Legal Fees
- Supplies Related to Fund Records
- Rush Transfer ($8 each)
- Transfer Fees
- Sub-custodian Charges
- Price Waterhouse Audit Letter
- Federal Reserve Fee for Return items over $2,500 ($4.25 each)
- GNMA transfer ($15 each)
- PTC Deposit/Withdrawal for Same day turnaround ($50 each)
--------------------------------------------------------------------------------
X. PAYMENT OF FEES
--------------------------------------------------------------------------------
All fees are expressed in U.S. Dollars and will be charged against the
fund's custodian account five business days after the invoice is mailed
to the fund's offices.
--------------------------------------------------------------------------------
FGIC PUBLIC TRUST STATE STREET BANK & TRUST COMPANY
By By
------------------------------- -----------------------------
Title Title
------------------------------- -----------------------------
Date Date
------------------------------- -----------------------------
This schedule will be effective May 1, 1996
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