Exhibit 10.1

 

[tlogo1.jpg]

 

GLOBAL CUSTODY AGREEMENT

For Foreign and Domestic Securities

 

This Custodian Agreement (“Agreement”) is made as of March 11, 2011 by and
between Harris & Harris Group, Inc. (“Principal”) and Union Bank, N.A.
(“Custodian”).

 

WHEREAS, the Custodian is a bank meeting the qualifications required by Section
17(f)(1) of the Act to act as custodian of the portfolio securities and other
assets of investment companies; and

WHEREAS, Principal wishes to retain the Custodian to act as custodian of its
portfolio securities and other assets in compliance with Section 17(f) of the
Act (as defined below), and the Custodian has indicated its willingness to so
act;

 

NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.        DEFINITIONS. Certain terms used in this Agreement are defined as
follows:

 

1.1 “Account” means, collectively, each account maintained by Custodian on
behalf of Principal pursuant to Paragraph 4 of this Agreement.

 

1.2 “Act” means the Investment Company Act of 1940, as amended, and the rules
and regulations adopted by the U.S. Securities and Exchange Commission (“SEC”)
thereunder, including §270.17f-4, §270.17f-5 and §270.17f-7, all as may be
amended from time to time.

 

1.3 “Board” means the Board of Trustees or the Board of Directors of Principal.

 

1.4 “Depository” means both any “securities depository” within the meaning of
§270.17f-4 of the Act and any Eligible Securities Depository

 

1.5  “Eligible Foreign Custodian” means an entity that is incorporated or
organized under the laws of a country other than the United States and that is a
Qualified Foreign Bank, as defined in §270.17f-5(a)(5) of the Act.

 

1.6  “Eligible Securities Depository”, (“Depository”, or collectively
"Depositories”) means a system for the central handling of securities as defined
in §270.17f-7(b)(1) of the Act.

 

1.7  “Emerging Market” means each market so identified in Appendix A attached
hereto.

 

1.8  “Foreign Account” means an Account in which Foreign Currencies or
Securities are held by the Custodian for the benefit of clients whether in
comingled accounts or accounts designated for each beneficiary owner as is
required under the regulatory jurisdiction where the Foreign Account is
established.

 

1.9 “Foreign Assets” has the meaning provided in §270.17f-5(a)(2) of the Act.

 

1.10 “Foreign Currency” (“Currencies”) means any currency or any composite
currency unit issued by a government or entity other than the United States
Department of Treasury.

 

1.11 “Foreign Market” means each market so identified in Appendix A attached
hereto.

 

1.12 “Global Sub-Agent Network” (“Sub-Agent Network” or “Sub-Agents”) means the
countries and markets where Eligible Foreign Sub-Custodians and Eligible Foreign
Depositories are maintained by Custodian.

 

© Union Bank, N.A. (2009-08) 1 of 15

 

  

1.13  “Governing Documents” means, with respect to each of the portfolios, (i)
the declaration of trust or other constituting document of the Principal of
which the portfolio is a series or portfolio, (ii) the currently effective
prospectus under the Securities Act, (iii) the most recent statement of
additional information, and (iv) a certified copy of the Board approving the
engagement of the Custodian to act as custodian of the Securities.

 

1.14 “Monitoring System” means the policies and procedures established by
Custodian to fulfill its duties to monitor the custody risks associated with
maintaining Securities with a Sub-Custodian or Depository on a continuing basis,
pursuant to this Agreement.

 

1.15 “Securities” means securities as defined in §2(a)(36) of the Act together
with cash or any currency or other property of Principal and all income and
proceeds of sale of such securities or other property of Principal that are held
by Custodian in the Account.

 

1.16 “Securities Act” means the Securities Act of 1933, as amended.

 

1.17 “Sub-Custodian” means an entity, including an Eligible Foreign Custodian,
that Custodian retains to hold Securities.

 

2.     APPOINTMENT

 

2.1 Principal hereby appoints the Custodian as the custodian of the Securities
of each of its Portfolios.

 

2.2 Principal has provided the Custodian with a copy of its Governing Documents,
and will provide the Custodian with a copy of amendments, supplements and
modifications thereof from time to time.

 

2.3 The Custodian hereby accepts appointment as custodian of the Securities of
Principal and agrees to perform the duties of such custodian in accordance with
the provisions of this Agreement.

 

3.     REPRESENTATIONS AND ACKNOWLEDGEMENTS

 

3.1 Power to Enter Agreement. Principal represents that, with respect to the
Account, Principal is authorized to enter into this Agreement and to retain
Custodian on the terms and conditions and for the purposes described herein.

 

3.2 Foreign Custody Manager. The custodian agrees to serve as Principal’s
“Foreign Custody Manager” as defined in Rule §270.17f-5(a)(3) of the Act, in
respect of Principal’s Foreign Assets held from time to time by the Custodian
with any Sub-Custodian that is an Eligible Foreign Custodian or with any
Eligible Securities Depository.

 

3.3 Custodian’s Sub-Agent Network. Principal hereby acknowledges receiving
appropriate notice of Custodian’s selection of the use of those Eligible Foreign
Custodians and Eligible Securities Depositories that are identified in Appendix
A of this Agreement.

 

4.     ESTABLISHMENT OF ACCOUNT.

 

4.1 Custodian shall open and maintain a separate Account or Accounts in the name
of Principal and shall hold in such Account or Accounts, subject to the
provisions hereof, all Securities and non-cash property received by it from or
for the Account of the Principal. Custodian, in its sole discretion, may
reasonably refuse to accept any property now or hereafter delivered to it for
inclusion in the Account. Principal shall be notified promptly of such refusal
and any such property shall be immediately returned to Principal. Custodian
shall be under no duty to take any action hereunder on behalf of the Principal
except as specifically set forth herein or as may be specifically agreed to by
Custodian and the Principal in a written amendment hereto.

 

4.2 Subject at all times to the instruction of Principal pursuant to the terms
of this Agreement, the Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such Securities and investments
except pursuant to the direction of Principal under terms of the Agreement.

 

© Union Bank, N.A. (2009-08) 2 of 15

 

  

5.      CUSTODY AND REGISTRATION.

 

Custodian may (i) maintain possession of all or any portion of the Securities,
including possession in a foreign branch or other office of Custodian; or (ii)
retain, in accordance with this Paragraph 5 and Paragraph 6 of this Agreement,
one or more Sub-Custodians to hold all or any portion of the Securities.
Custodian and any Sub-Custodian may, in accordance with this Paragraph 5 and
Paragraph 6 of this Agreement, deposit definitive or book-entry Securities with
one or more Depositories.

 

5.1 Identification of Securities. Custodian shall ensure the Securities are at
all times properly identified as being held for the appropriate Account.
Custodian shall segregate physically the Securities and non-cash property from
other securities owned by Custodian. Custodian shall not be required to
segregate physically Securities held from other securities or property held by
Custodian for third parties as custodian or other representative capacity, but
Custodian shall maintain adequate records showing the true ownership of the
Securities.

 

5.2 Use of Depositories and Sub-Custodians. Custodian may, in its discretion,
deposit any Securities which, under applicable law, are eligible to be so
deposited in a Depository or Sub-Custodian account. Securities and Foreign
Currencies held by a Sub-Custodian or Depository will be held subject to the
rules, terms and conditions of such securities markets or securities
depositories. If Custodian deposits Securities with a Sub-Custodian or
Depository, Custodian shall maintain adequate records showing the identity and
location of the Sub-Custodian or Depository, the Securities held by the
Sub-Custodian or Depository and each account to which such Securities belong.
With respect to Securities that are held for Custodian or any Sub-Custodian at a
Depository, as defined in of §270.17f-4 of the Act, Custodian shall satisfy or
cause the Sub-Custodian to satisfy the requirements of §270.17f-4 of the Act.

 

5.3 Use of Nominees. Custodian shall have the right to hold or cause to be held
all Securities in the name of the Custodian, or for any Sub-Custodian or
Depository, or in the name of a nominee of any of them as Custodian shall
determine to be appropriate under the circumstances.

 

5.4 Foreign Currency Deposits. The Custodian may in accordance with customary
practices hold any currency in which any cash is denominated on deposit, and
effect transaction relating thereto, through an account with an affiliate of
Union Bank, or Sub-Custodian or Depository in the country where such currency is
the lawful currency or in other countries where such currency may be lawfully
held on deposit.

 

5.5 Transferability and Convertibility of Currency. Custodian shall have no
liability for any loss or damage arising from the applicability of any law or
regulation now or hereafter in effect, or from the occurrence of any event,
which may affect the transferability, convertibility, or availability of any
currency in the countries where such Foreign Accounts are maintained and in no
event shall Custodian be obligated to substitute another currency for a currency
whose transferability, convertibility, or availability has been affected by such
law, regulation or event. To the extent that any such law, regulation or event
imposes a cost or charge upon Custodian in relation to the transferability,
convertibility, or availability of any such currency, such cost or charge shall
be for the Account.

 

5.6 Delivery of Securities. If Principal directs Custodian to deliver assets,
certificates or other physical evidence of ownership of Securities to any broker
or other party, other than a Sub-Custodian or Depository employed by Custodian
for purposes of maintaining the Account, Custodian’s sole responsibility shall
be to exercise care and diligence in effecting the delivery as instructed by
Principal. Upon completion of the delivery, Custodian shall be discharged
completely of any further liability or responsibility with respect to the
safekeeping and custody of Securities so delivered.

 

© Union Bank, N.A. (2009-08) 3 of 15

 

  

5.7 Transferability of Securities. Except as otherwise provided under this
Agreement or as the parties may otherwise agree, Custodian shall ensure that (i)
the Securities will not be subject to any right, charge, security interest,
lien, or claim of any kind in favor of Custodian or any Sub-Custodian or any
person claiming through any of them except for as discussed in Section 9.2, and
in the case of cash deposits at an Eligible Foreign Custodian, liens or rights
in favor of the creditors of the Eligible Foreign Custodian arising under
bankruptcy, insolvency, or similar laws, and (ii) the beneficial ownership of
the Securities will be freely transferable without the payment of money or value
other than for safe custody or administration.

 

5.8 Access to Account Records. Principal or its designee, shall have access,
upon reasonable prior notice to Custodian, during regular business hours to the
books and records relating to the Accounts, or shall be given confirmation of
the contents of the books and records, maintained by Custodian or any
Sub-Custodian holding Securities hereunder to verify the accuracy of such books
and records. Custodian shall notify Principal promptly of any applicable law or
regulation in any country where Securities are held that would restrict such
access or confirmation.

 

6.      SELECTION AND MONITORING OF GLOBAL SUB-AGENT NETWORK.

 

Upon written notice to Principal, as provided in Subparagraph 6.4 of this
Agreement, Custodian may from time to time select one or more Eligible Foreign
Custodians and, subject to the provisions of Subparagraph 6.7, one or more
Eligible Securities Depositories, to hold Securities hereunder.

 

6.1 Governing Sub-Agent Agreement. Any relationship Custodian establishes with
an Eligible Foreign Custodian with respect to Securities shall be governed by a
written contract providing for the reasonable care of Securities based on the
standards specified in section §270.17(f)-5(c)(1) of the Act, and including the
provisions set forth in sections §270.17(f)-5(c)(2)(i)(A) through (F) of the
Act, or provisions which Custodian determines provide the same or greater
protection of Principal’s Securities.

 

6.2 Sub-Agent Network Selection.

 

6.2.1 Foreign Sub-Custodian. In selecting an Eligible Foreign Custodian,
Custodian shall exercise reasonable care, prudence and diligence and shall
consider whether the Securities will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, including (i) the
Eligible Foreign Custodian’s practices, procedures, and internal controls,
including, but not limited to, the physical protections available for
certificated securities (if applicable), the method of keeping custodial
records, and the security and data protection practices; (ii) the Eligible
Foreign Custodian’s financial strength, general reputation and standing in the
country in which it is located, its ability to provide efficiently the custodial
services required, and the relative cost of such services; and, (iii) whether
the Eligible Foreign Custodian has branch offices in the United States, or
consents to service of process in the United States, in order to facilitate
jurisdiction over and enforcement of judgments against it.

 

6.2.2 Securities Depository. In selecting an Eligible Securities Depository,
Custodian shall exercise reasonable care, prudence, and diligence in evaluating
the custody risks associated with maintaining Securities with the Eligible
Securities Depository under Custodian’s custody arrangements with any relevant
Eligible Foreign Custodian and the Eligible Securities Depository.

 

6.3 Notices to Principal. Custodian shall give 30 days’ written notice to
Principal of its intention to deposit Securities with an Eligible Foreign
Custodian or, directly or through an Eligible Foreign Sub-Custodian, with an
Eligible Securities Depository. The notice shall identify the proposed Eligible
Foreign Custodian or Eligible Securities Depository and shall include reasonably
available information relied on by Custodian in making the selection.

 

6.4 Monitoring of Sub-Agent Network. Custodian shall monitor under its
Monitoring System the appropriateness of the continued custody or maintenance of
Principal’s Securities with each Eligible Foreign Custodian or Eligible
Securities Depository.

 

6.4.1 Custodian shall evaluate and determine at least annually the continued
eligibility of each Eligible Foreign Custodian and Eligible Securities
Depository approved by Principal to act as such hereunder. In discharging this
responsibility, Custodian shall (i) monitor on a continuing basis the day to day
services and reports provided by each Eligible Foreign Custodian or Eligible
Securities Depository; (ii) at least annually, obtain and review the annual
financial report published by each Eligible Foreign Custodian, and to the extent
such reports are publicly available, each Eligible Securities Depository, and
other reports on each Eligible Foreign Custodian or Eligible Securities
Depository which Custodian may obtain from a reputable independent analyst; and,
(iii) periodically as deemed appropriate, physically inspect the operations of
each Eligible Foreign Custodian or Eligible Securities Depository.

 

© Union Bank, N.A. (2009-08) 4 of 15

 

  

6.4.2 Custodian shall provide to the Board annually and at such other times as
the Board may reasonably request based on the circumstances of the Principal’s
foreign custody arrangements, written reports notifying the Board of the
placement of Securities of the Principal with a particular foreign Eligible
Foreign Custodian within a Foreign Market or an Emerging Market and of any
material change in the arrangements (including any material changes in any
contracts governing such arrangements or any material changes in the established
practices or procedures of Depositories) with respect to Securities of the
Principal held by the Eligible Foreign Custodian.

 

6.4.3 If Custodian determines that (i) any Eligible Foreign Custodian or
Eligible Securities Depository no longer satisfies the applicable requirements
described in Subparagraph 1.5 of this Agreement (in the case of an Eligible
Foreign Custodian) or Subparagraph 1.6 of this Agreement (in the case of an
Eligible Securities Depository); or, (ii) any Eligible Foreign Custodian or
Eligible Securities Depository is otherwise no longer capable or qualified to
perform the functions contemplated herein; or (iii) any change in a contract
with a Eligible Foreign Custodian or any change in established Eligible
Securities Depository or market practices or procedures shall cause a custody
arrangement to no longer meet the requirements of the Act, Custodian shall
promptly give written notice thereof to Principal. The notice shall, in
addition, either indicate Custodian’s intention to transfer Securities held by
the removed Eligible Foreign Custodian or Eligible Securities Depository to
another Eligible Foreign Custodian or Eligible Securities Depository previously
identified to Principal, or include a notice pursuant to Subparagraph 6.4 of
this Agreement of Custodian’s intention to deposit Securities with a new
Eligible Foreign Custodian or Eligible Securities Depository, in either instance
such transfer of Securities to be effected as soon as reasonably practical.

 

6.5 Compulsory Depositories. Notwithstanding the foregoing sub-sections of this
Paragraph 6, Custodian shall have no responsibility for the selection or
monitoring of any Eligible Securities Depository or Eligible Securities
Depository’s agent (“Compulsory Depository”) (i) the use of which is mandated by
law or regulation; (ii) because securities cannot be withdrawn from the
depository; or (iii) because maintaining securities outside the securities
depository is not consistent with prevailing market practices in the relevant
market; provided however, that Custodian shall notify Principal if Principal has
directed a trade in a market containing a Compulsory Depository, so Principal
and Advisor shall have an opportunity to determine the appropriateness of
investing in such market.

 

6.6 Assessment of Custody Risk. Principal and Custodian agree that, for purposes
of this Paragraph 6, Custodian’s determination of appropriateness shall only
include custody risk, and shall not include any evaluation of “country risk” or
systemic risk associated with the investment or holding of assets in a
particular country or market, including, but not limited to (i) the use of
Compulsory Depositories, (ii) the country’s or market’s financial
infrastructure, (iii) the country’s or market’s prevailing custody and
settlement practices, (iv) risk of nationalization, expropriation or other
governmental actions, (v) regulation of the banking or securities industries,
(vi) currency controls, restrictions, devaluation or fluctuation, and (vii)
country or market conditions which may affect the orderly execution of
securities transactions or affect the value of the transactions. Principal and
Custodian further agree that the evaluation of any such country and systemic
risks shall be solely the responsibility of Principal.

 

© Union Bank, N.A. (2009-08) 5 of 15

 

  

7.      TRANSACTIONS

 

7.1 Instructions and Immediately Available Funds. Principal is responsible for
ensuring that Custodian receives timely instructions and sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (a) sufficient cash denominated in the currency of
Principal’s home jurisdiction to purchase the necessary foreign currency, or (b)
sufficient applicable foreign currency, to settle the transaction. If Custodian
does not receive such timely instructions and/or immediately available funds,
Custodian shall have no liability of any kind to any person, including
Principal, for failing to effect settlement. However, Custodian shall use
reasonable efforts to effect settlement as soon as possible after receipt of
appropriate instructions.

 

7.2.1 Customary or Established Settlement Practices. Principal acknowledges
settlement of and payment for Securities received for and delivered from the
Account may be made in accordance with the customary or established securities
trading and securities processing practices in the market in which the
transaction occurs. Principal understands that when Custodian is instructed to
deliver Foreign Securities or Foreign Currencies against payment, delivery of
such Foreign Securities and Foreign Currencies and receipt of payment therefore
may not be completed simultaneously. Principal assumes full responsibility for
all credit risks involved in connection with Custodian’s delivery of Foreign
Securities or Foreign Currencies pursuant to instructions of Principal.

 

7.2.2 Additions to and Withdrawals from Account. Custodian shall make all
additions and withdrawals of Securities to and from this Account only upon
receipt of and pursuant to written instructions from Principal.

 

7.3 Purchases or Sales. Principal from time to time may instruct Custodian
regarding the purchase or sale of Securities in accordance with this paragraph
7.3.

 

7.3.1 Purchases. Custodian shall settle purchases by charging the Account with
the amount necessary to make the purchase and effecting payment to the seller or
broker for the Securities. Custodian shall have no liability of any kind to any
person, including Principal, if Custodian effects payment on behalf of the
Account, and the settler or broker specified by Principal fails to deliver the
Securities purchased. Custodian shall exercise such ordinary care and diligence
as would be employed by a reasonably prudent custodian in examining and
verifying the certificates or other indicia of ownership of the Securities
purchased before accepting them, except with respect to assets described in
Paragraph 7.4.

 

7.3.2 Sales. Custodian shall settle sales by delivering certificates or other
indicia of ownership of the Securities, and as instructed, shall receive cash
for such sales. Custodian shall have no liability of any kind to any person,
including Principal, if Custodian exercises due diligence and delivers such
certificates or indicia of ownership and the purchaser or broker fails to effect
payment.

 

7.4 Depository Settlement. If a purchase or sale is settled through a
Sub-Custodian or Depository, Custodian shall exercise such ordinary care and
diligence as would be employed by a reasonably prudent custodian in verifying
proper consummation of the transaction by the Sub-Custodian or Depository.

 

7.5 Income and Principal. Custodian or its designated Sub-Agents are authorized,
as Principal’s agent, to surrender against payment maturing obligations and
obligations called for redemption, and to collect and receive payments of
interest and principal, dividends, warrants, and other things of value in
connection with Securities. Absent written instructions from Principal, funds
will remain in the currency of collection upon receipt of payment.

 

7.6 Foreign Currency Transactions. At the direction of Principal, Custodian
shall convert currency in the Account to other currencies through customary
channels including, without limitation, Custodian or any of its affiliates, as
shall be necessary to effect any transaction directed by Principal.

 

© Union Bank, N.A. (2009-08) 6 of 15

 

  

7.7 Taxes. Custodian shall pay or cause to be paid from the Account upon receipt
of instructions from Principal all taxes and levies in the nature of taxes
imposed on the Account or the Foreign Securities thereof by any country.
Custodian will use reasonable efforts to give the Principal advance notice of
the imposition of such taxes. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Principal or the
Custodian as custodian of the Principal by the tax law of the United States or
of any state or political subdivision thereof or any foreign jurisdiction. The
sole responsibilities of the Custodian with regard to such tax law shall be to
use reasonable efforts to effect the withholding of local taxes and related
charges with regard to market entitlement/payment in accordance with local law
and subject to local market practice or custom and to assist the Principal with
respect to any claim for exemption or refund under the tax law of countries for
which such Principal has provided such information. Except as specifically
provided in this Agreement or otherwise agreed to in writing by the Custodian,
the Custodian shall have no independent obligation to determine the tax
obligations now or hereafter imposed on the Principal by any taxing authority or
to obtain or provide information relating thereto, and shall have no obligation
or liability with respect to such tax obligations.

 

7.8 Foreign Tax Reclamation. Custodian shall use reasonable efforts to obtain
refunds of taxes withheld on Foreign Securities or the income thereof that are
available under applicable tax laws, treaties and regulations subject to
Principal’s provision of all documentation and certifications as required by
U.S. and foreign tax authorities to establish the eligibility of Principal for
tax reclamation under applicable law or treaty. Principal hereby agrees to
indemnify and hold harmless Custodian and its agents in respect to any liability
arising from any under withholding or underpayment of any Tax which results from
the inaccuracy or invalidity of any such forms or other documentation, and such
obligation to indemnify shall be a continuing obligation of Principal, its
successor and assignees, notwithstanding the termination of this agreement. The
Custodian is authorized to disclose any information required by any such tax or
other governmental authority in relation to processing any claim for exemption
from or reduction or refund of any taxes relating to the Principal’s
transactions and holdings.

 

7.9 Collection Obligations. Custodian shall diligently collect income and
principal of Securities which the Custodian has received actual notice in
accordance with normal industry practices. However, Custodian shall be under no
obligation or duty to take any action to effect collection of any amount if the
Securities upon which such amount is payable are in default, or if payment is
refused after due demand. Custodian shall notify Principal promptly of such
default or refusal to pay. Custodian shall have no duty to file or pursue any
bankruptcy or class action claims with respect to Account, unless indemnified by
Principal in manner and amount satisfactory to Custodian.

 

7.10 Capital Changes. Custodian may, without further instruction from Principal,
exchange temporary certificates and may surrender and exchange Securities for
other securities in connection with any reorganization, recapitalization or
similar transaction in which the owner of the Securities is not given an option.
Custodian has no responsibility to effect any such exchange unless it has
received notice of the event permitting or requiring such exchange at its
processing center in San Francisco or at the office of Custodian’s designated
agents.

 

7.11 Fractional Interest. Custodian shall receive and retain all stock
distributed by a corporation as a dividend, stock split, or otherwise; however,
in connection therewith, if a fractional share is received, Custodian shall sell
such fractional shares when such market facility is available.

 

8.      CREDITS TO ACCOUNT

 

8.1 Payment. Custodian may as a matter of bookkeeping convenience or by separate
agreement with the Principal, credit the account with the proceeds from the
sale, redemption or other disposition of Securities or interest or dividends or
other distributions payable on Securities prior to its actual receipt of final
payment; therefore, all such credits shall be conditional until the Custodian’s
actual receipt of final payment and may be reversed by Custodian to the extent
that final payment is not received. Payment with respect to a transaction will
not be final until Custodian receives immediately available funds under which
applicable local law, rule and/or practice, are irreversible and not subject to
any security interest, levy or other encumbrance, and which are specifically
applicable to such transaction. Principal acknowledges and agrees that any
currency risk associated with such credits will be born by Principal.

 

© Union Bank, N.A. (2009-08) 7 of 15

 

  

8.2. Emerging Market Settlement Dates. Notwithstanding the foregoing Paragraph
8.1, Principal understands and agrees that settlement of Securities transactions
is available only on settlement date basis in certain Emerging Markets, which
are identified in Appendix A, as amended from time to time by written notice to
Principal.

 

8.2.1 Cash Deposits. For Emerging Markets with restricted settlement conditions,
cash of any currency deposited or delivered to the Account shall be available
for use by Principal only on the business day on which actual receipt of final
payment and funds of good value are available to Sub-Custodian in the Account.

 

8.2.2 Securities. For Emerging Markets with restricted settlement conditions,
Securities deposited or delivered to the Account shall be available for use by
Principal only on the business day on which such Securities are held in the
nominee name or are otherwise subject to the control of, and in a form for good
delivery by, the Sub-Custodian.

 

9.      OVERDRAFT AND INDEBTEDNESS

 

9.1 Advance Funds. If Custodian advances funds to or for the benefit of Account
in connection with the settlement of securities or currency transactions or
other activity in the Account including overdrafts or other indebtedness
incurred in connection with the settlement of securities transactions, maturity
or income payments or funds transfers, Principal agrees to reimburse Custodian
on demand the amount of the advance or overdraft and all related fees as
established in Custodian’s published fee schedule. Principal will bear the risk
from any currency valuation differences associated with Principal’s
reimbursement obligations to Custodian.

 

9.2 Repayment. If Principal requires the Custodian, its affiliates, subsidiaries
or agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement), or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee’s own negligent action, negligent failure to act or willful
misconduct, or if Principal fails to compensate the Custodian pursuant to
Paragraph 17 hereof, any cash at any time held for the account of Principal
shall be security therefor and should Principal fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash to the
extent necessary to obtain reimbursement.

 

10.      CORPORATE ACTIONS. PROXIES AND LITERATURE

 

10.1 Corporate Actions. Custodian shall notify Principal of the receipt of
notices of redemptions, conversions, exchanges, calls, puts, subscription
rights, and scrip certificates (“Corporate Action(s)”). Custodian need not
monitor financial publications for notices of Corporate Actions and shall not be
obligated to take any action unless actual notice has been received by Custodian
at its processing center in San Francisco, California, or at the offices of the
Sub-Agent where the security is held in Custodian’s Foreign Account. Custodian’s
sole responsibility in this regard shall be to give such notices to Principal
within a reasonable time after Custodian receives them. Custodian has no
responsibility to respond or otherwise act with respect to any such notice
unless and until Custodian has received timely and appropriate instructions from
Principal. Principal is responsible for ensuring required documentation and
funds are available to Custodian and its agents as required under the terms of
the offer or by legal jurisdiction in order for Custodian and its agent to take
action on behalf of Account.

 

10.2 Proxies. Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of Principal, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall promptly deliver, or cause to be executed and delivered, to
Principal all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the beneficial owner of such
securities (if registered otherwise than in the name of Principal), but without
indicating the manner in which such proxies are to be voted.

 

Custodian shall transmit promptly to Principal all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith) received by Custodian from
issuers of the securities being held for Principal. With respect to tender or
exchange offers, Custodian shall transmit promptly to Principal 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.

 

© Union Bank, N.A. (2009-08) 8 of 15

 

  

Principal acknowledges that proxy services are limited in foreign markets and
Custodian’s sole responsibility with respect to such proxy materials will be to
forward the proxy and accompanying material received by Custodian to Principal.
Custodian shall have no duty to translate or retain any material received unless
required to do so by law.

 

10.3 Corporate Literature. Custodian shall have no duty to forward or to retain
any other corporate material received by Custodian for the Account unless
required to do so by law. Custodian shall have no duty to translate or retain
any material received from its Global Sub-Agent Network unless required to do so
by law.

 

10.4 Disclosure to Issuers of Securities. Unless Principal directs Custodian in
writing to the contrary, Principal agrees that Custodian or its Sub-Agents may
disclose the name and address of the party with the authority to vote the
proxies of the Securities held in this Account as well as the number of shares
held, to any issuer of said Securities or its agents upon the written request of
such issuer or agent in conformity with the provisions of the applicable law.
Principal acknowledges that Custodian or its Sub-Agents may be required under
jurisdictional law to disclose to issuers beneficial owner information
regardless of Principal’s instructions otherwise.

 

11.      INSTRUCTIONS

 

11.1 Written. All instructions from Principal with respect to the Accounts must
be from an authorized person and shall be in writing, and shall continue in
force until changed by subsequent instructions. For purposes of this Paragraph
11, an authorized person means any of the persons duly authorized by the Board
to give instructions on behalf of the Principal as set forth in a certificate
along with any limitations on such Persons’ scope of authority, such certificate
to be executed by the Secretary or Assistant Secretary of the Principal, as the
same may be revised from time to time. Pending receipt of written authority,
Custodian may in its absolute discretion at any time accept oral, faxed, wired
and electronically transmitted instructions from Principal provided Custodian
believes in good faith that the instructions are genuine. If oral instructions
are received, Principal shall promptly confirm such instructions in writing or
by facsimile or other means permitted hereunder. Principal will hold Custodian
harmless for the failure of Principal to send confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Custodian’s failure to produce such confirmation at any subsequent time.

 

11.2 Reliance on Instructions. Except as otherwise provided herein, all
instructions shall be in writing, and shall continue in force until changed by
subsequent instructions.

 

12.      RIGHT TO RECEIVE ADVICE

 

12.1 Advice of the Principal. If Custodian is in doubt as to any action it
should or should not take under this Agreement, Custodian may request directions
or advice, including oral instructions or written instructions, from the
Principal.

 

12.2 Advice of Counsel. If Custodian shall be in doubt as to any question of law
pertaining to any action it should or should not take, Custodian may request
advice from counsel of its own choosing (who may be counsel for the Principal or
Custodian, at the option of Custodian). Principal shall pay the reasonable cost
of any counsel retained by Custodian with prior notice to Principal.

 

12.3 Conflicting Advice. In the event of a conflict between directions or advice
or oral instructions or written instructions Custodian receives from the
Principal, and the advice it receives from counsel, Custodian shall be entitled
to rely upon and follow the advice of counsel.

 

12.4 Protection of Custodian. Custodian shall be indemnified by Principal and
without liability for any action Custodian takes or does not take in reliance
upon directions or advice or oral instructions or written instructions Custodian
receives from or on behalf of the Principal, or from counsel and which Custodian
believes, in good faith, to be consistent with those directions or advice or
oral instructions or written instructions. Nothing in this paragraph shall be
construed so as to impose an obligation upon Custodian (i) to seek such
directions or advice or oral instructions or written instructions, or (ii) to
act in accordance with such directions or advice or oral instructions or written
instructions.

 

© Union Bank, N.A. (2009-08) 9 of 15

 

  

13.      ACCOUNTING AND REPORTING

 

13.1 Cost and Nominal Value. Principal agrees to furnish Custodian with the
income tax cost basis and dates of acquisition of all Securities held in the
Account to be carried on its records. If Principal does not furnish such
information, Custodian shall carry the Securities at any such nominal value it
determines, such value to be for bookkeeping purposes only. All statements and
reporting of any matters requiring this information will use this nominal value.
Custodian shall have no duty to verify the accuracy of the cost basis and dates
of acquisition furnished by Principal. Securities purchased in the Account shall
be carried at cost.

 

13.2 Valuations. To the extent that Custodian has agreed to provide pricing or
other information services, Custodian is authorized to utilize any vendor
(including brokers and dealers of Securities and pricing services embedded in
Custodian’s securities processing or accounting systems) reasonably believed by
Custodian to be reliable to provide such information. Principal understands that
certain pricing information with respect to complex financial instruments
including, without limitation, derivatives, may be based on calculated amounts
rather than actual market transactions and may not reflect actual market values,
and that the variance between such calculated amounts and actual market values
may or may not be material. Where pricing vendors used by Custodian do not
provide information for Securities, Principal or authorized party may advise
Custodian regarding the fair market value of, or provide other information with
respect to, such held Securities. If Principal does not provide such
information, Custodian shall use the cost or nominal value for such Securities,
solely for administrative convenience. Custodian shall not be liable for any
loss, damage or expense incurred as a result of errors or omissions with respect
to any pricing or other information utilized by Custodian hereunder and shall
have no responsibility or duty to ascertain or authenticate the value of pricing
applied to any such Security.

 

13.3 Activity Reports. Custodian shall make available daily to Principal a
statement summarizing all transactions and entries for the account of Principal.

 

13.4 Statements. Custodian shall provide Principal Account statements and other
reports periodically by means of the Custodian’s Online Trust and Custody
Service or as otherwise as agreed to by Principal and Custodian showing all
income and principal transactions and cash positions, and a list of securities.
Principal may approve or disapprove any such statement within thirty (30) days
of its receipt, and, if no written objections are received within the thirty
(30) day period, such statement of Account shall be deemed approved.

 

14.      USE OF OTHER BANK SERVICES

 

14.1 HighMark Mutual Funds

 

Principal may direct Custodian to invest available funds in the HighMark SM
Funds mutual funds advised by an affiliate of Custodian and for which Custodian
may also act as custodian and provide other services for the purpose of cash
management. Principal shall designate the particular HighMark Fund that
Principal deems appropriate for the Account. Principal hereby acknowledges that
Custodian will receive fees for such services in addition to those fees charged
by Custodian as agent for the Principal’s custody Account.

 

14.2 Other Fund Investments. Principal may invest in third party mutual funds,
for which the Custodian or its affiliates may provide shareholder, recordkeeping
or other services. Principal hereby acknowledges that Custodian or its
affiliates may receive fees for such services in addition to those fees charged
by Custodian under this Agreement.

 

© Union Bank, N.A. (2009-08) 10 of 15

 

  

14.3 Foreign Exchange. The Custodian makes available to Principal its foreign
exchange services to convert currencies in conjunctions with transactions in
Principal’s Account. Principal acknowledges that (a) the foreign currency
exchange department is a part of Custodian or one of its affiliates or
subsidiaries; (b) the Account is not obligated to effect foreign currency
exchange with Custodian; (c) Custodian will receive benefits for such foreign
currency transactions which are in addition to the compensation which Custodian
receives for administering the Account; and (d) Custodian will make available
the relevant data so that Principal can determine that the foreign currency
exchange transaction are as favorable to the Account as terms generally
available in arm’s length transaction between unrelated parties. Principal
acknowledges that foreign currency transactions will be performed in accordance
with Union Bank’s Foreign Exchange Agreement in the form of Exhibit I hereto and
incorporated herein by reference and Principal hereby agrees and acknowledges
the terms and conditions thereof. If Principal elects to give standing
instructions to Custodian to execute foreign currency exchange transactions on
their behalf, or in the event a foreign currency exchange transaction is
initiated in the absence of the specific Foreign Exchange Agreement, such
transaction will be performed at the Bank’s prevailing rate. Principal
acknowledges that a Foreign Exchange transaction in which Custodian’s foreign
exchange services is the counterparty to Principal are subject to Paragraph 9 of
this Agreement.

 

14.4 Interest Bearing Deposits. Principal may direct that assets of the Account
be invested in deposits with Union Bank as a sweep vehicle or other deposit held
in the Custodian’s street name for the benefit of it’s clients. Such deposits
are covered by FDIC insurance up to the designated value in effect for each
beneficial owner.

 

14.5 Brokerage Services. Principal may direct Custodian to utilize for this
Account other services or facilities provided by Custodian, its subsidiaries or
affiliates. Such services may include, but are not be limited to (i) the
purchase or sale of securities as principal, or (ii) the placing of orders for
the purchase, sale, exchange, investment or reinvestment of securities through
any affiliated brokerage service, or (iii) the placing of orders for the
purchase or sale of units of any investment company that Custodian, UnionBanCal
Corporation, or their subsidiaries or affiliates, manage, advise act as
custodian or provide other services.

 

14.6 Credit Facilities. The Custodian may in accordance with its commercial
lending practices enter into a credit facility with the Principal for use with
the operation of the Account. Such credit facility will be agreed to under
separate agreement and subject to the terms and conditions, therein. Principal
acknowledges that any such credit facility is subject to the lien provisions of
Paragraph 9.2 of this Agreement.

 

15.      CUSTODIAN’s RESPONSIBILITIES AND LIABILITIES:

 

15.1 Standard of Care. In performing the responsibilities delegated to it under
this Agreement, the Custodian agrees to exercise reasonable care, prudence and
diligence and shall not be liable for any damages arising out of the Custodian’s
performance of or failure to perform its duties under this Agreement except to
the extent that damages arise directly out of the Custodian’s willful
misfeasance, bad faith, gross negligence or otherwise from a material breach of
the Custodian’s standard of care under this Agreement.

 

15.2 Investment Authority. The parties intend that Custodian shall not be
considered a fiduciary of the Account.

 

15.3 Insurance and Force Majeure. Without limiting the generality of Paragraph
14.1 or of any other provision of this Agreement the Custodian shall not be
liable so long as and to the extent that it exercises reasonable care, for any
defect in the title, validity or genuineness of any Security or in the evidence
of title thereto received by it or delivered by it pursuant to this Agreement.
In addition, Custodian (i) shall not be required to maintain any special
insurance for the benefit of Principal, and (ii) shall not be liable or
responsible for any loss, damage, expense, failure to perform or delay caused by
accidents, strikes, fire, flood, war, riot, electrical or mechanical or
communication line or facility failures, acts of third parties (including
without limitation any messenger, telephone or delivery service), acts of God,
war, government action, civil commotion, fire, earthquake, or other casualty or
disaster or any other cause or causes which are beyond Custodian’s reasonable
control. However, Custodian shall use reasonable efforts to replace Securities
lost or damaged due to such causes with securities of the same class and issue
with all rights and privileges pertaining thereto. Custodian shall not be liable
to Principal for any loss which shall occur as the result of the failure of a
Sub-Custodian to exercise reasonable care with respect to the safekeeping of
assets.

 

© Union Bank, N.A. (2009-08) 11 of 15

 

  

15.4   Legal Proceedings

 

15.4.1 Custodian shall not be required to appear in or defend any legal
proceedings with respect to the Account or the Securities unless Custodian has
been indemnified to its reasonable satisfaction against loss and expense
(including reasonable attorneys’ fees).

 

15.4.2 With respect to legal proceedings Custodian may consult with counsel
acceptable to it after written notification to Principal concerning its duties
and responsibilities under this Agreement, and shall not be liable for any
action taken or not taken in good faith on the advice of such counsel.

 

15.4.3 To the extent permissible by law or regulation and upon Principal’s
request, the Principal shall be subrogated to the rights of the Custodian with
respect to any claim for any loss, damage or claim suffered by Principal, in
each case to the extent that the Custodian fails to pursue any such claim or
Principal is not made whole in respect of such loss, damage or claim.

 

15.4.4 Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet
Principal’s obligations under the Act, including Section 31 thereof and Rules
31a-1 and 31a-2 thereunder. To the extent that Custodian is able to do so,
Custodian shall provide assistance to Principal providing sub-certifications
regarding certain of its services performed hereunder to Principal in connection
with Principal’s Sarbanes-Oxley Act of 2002 certification requirements.

 

16.      INDEMNITIES AND LIMITATION OF LIABILITY.

 

16.1 In addition to the indemnification provisions contained in this Agreement,
Principal agrees to indemnify, defend and hold harmless Custodian and its
affiliates providing services under this Agreement, including their respective
officers, directors, agents and employees from all taxes, charges, expenses,
assessments, claims and liabilities including, without limitation, reasonable
attorneys' fees and disbursements and liabilities (“Claims”) arising directly or
indirectly from any action or omission to act which Custodian takes in
connection with the provision of services to Principal. Neither Custodian, nor
any of its affiliates, including their respective officers, directors, agents
and employees shall be indemnified against any liability (or any expenses
incident to such liability) caused by Custodian’s or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard in the
performance of Custodian’s or its affiliates’ activities under this Agreement.
The provisions of this Paragraph 16 shall survive termination of this Agreement.

 

16.2 In all cases, Custodian’s liability under this Agreement shall be limited
to the resulting direct loss, if any, incurred by Principal. Under no
circumstances shall Custodian be liable for any incidental, consequential,
indirect, punitive, or special damage which Principal may incur or suffer in
connection with this Agreement.

 

17.      COMPENSATION AND OTHER CHARGES

 

17.11 Compensation. Principal shall pay Custodian compensation for its services
hereunder as specified in Appendix B. Fees shall accrue and be taken in arrears
as specified on the active fee schedule and charged to the Account unless
Principal has requested that it be billed directly. However, any fees not paid
within 60 days of billing will be charged to the Account.

 

17.2 Expenses. Principal shall reimburse Custodian for all reasonable
out-of-pocket expenses and processing costs incurred by Custodian in the
administration of the Account including, without limitation, reasonable counsel
fees incurred by Custodian pursuant to Subparagraph 14.4 of this Agreement.

 

© Union Bank, N.A. (2009-08) 12 of 15

 

 

18.      AMENDMENT AND TERMINATION.

 

18.1 Amendment. This Agreement may be amended at any time by a written
instrument signed by the parties or by Custodian immediately if required by
applicable law or upon thirty (30) days written notice to Principal.

 

18.2 Termination.

 

In addition, either party may terminate this Agreement and the Account upon 60
days' written notice. Upon such termination, Custodian shall deliver or cause to
be delivered the Securities, less any amounts due and owing to Custodian under
this Agreement, to a successor custodian designated by Principal. Upon
completion of such delivery Custodian shall be discharged of any further
liability or responsibility with respect to the Securities so delivered. In the
event that Securities or other properties remain in the possession of the
Custodian after the date of termination hereof owing to failure of Principal to
provide proper instructions, the Custodian shall be entitled to fair
compensation for its services during such period as the Custodian retains
possession of such securities, funds and other properties and the provisions of
this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect. In the event that no proper instructions
designating a successor custodian or alternative arrangements 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 Act of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $25,000,000, all Securities held by the
Custodian on behalf of Principal and all instruments held by the Custodian
relative thereto held by it under this Agreement on behalf of Principal, and to
transfer to an account of such successor custodian all of the Securities held in
an Account. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement. All expenses associated with the transfer of
custody hereunder upon termination hereof shall be borne by the Principal
(except as may be specifically agreed in writing by the parties in relation to
special arrangements).

 

19.      SUCCESSORS.

 

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors in interest. This Agreement may not be assigned by
either party, nor may the duties of either party hereunder be delegated, without
the prior written consent of the other party.

 

20.      GOVERNING LAW. The validity, construction, and administration of this
Agreement shall be governed by the applicable laws of the United States from
time to time in force and effect and, to the extent not preempted by such laws
of the United States, by the laws of the State of California from time to time
in force and effect. Any action or proceeding to enforce, interpret or
adjudicate the rights and responsibilities of the parties hereunder shall be
commenced in the State or Federal courts located in the State of California.

 

21.      ADDRESSES. Until further notice from either party, al communications
called for under this Agreement shall be in writing and addressed as follows:

 

If to Principal:

 

Name: Harris & Harris Group, Inc.   Street Address: 1450 Broadway, 24th Floor  
City, State, Zip: New York, NY 10018   Attn:     Telephone:     Facsimile:    

 

© Union Bank, N.A. (2009-08) 13 of 15

 

  

If to Custodian:

 

Union Bank, N.A.

Institutional Custody Services

Attn: Ms. Margaret Bond, Vice President

350 California Street, 6th Floor

San Francisco, California 94104

Telephone: (415) 705-7205

Facsimile: (877) 823-3601

 

22.      EFFECTIVE DATE.

 

This Agreement shall be effective as of the date appearing below, and shall
supersede any prior or existing agreements between the parties pertaining to the
subject matter hereof.

 

23.      COUNTERPARTS.

 

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement and all exhibits, appendices, attachments and
amendments hereto may be reproduced by any reasonable means. The parties hereto
each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

 

23.      MISCELLANEOUS.

 

Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof. This Agreement
embodies the entire agreement and understanding between the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.

 

Date:           By: Harris & Harris Group, Inc.           /s/ Daniel B. Wolfe  
  Authorized Signature                 Daniel B. Wolfe, President     Name &
Title           3/11/11     Date                 Authorized Signature          
      Name & Title                 Date  

 

© Union Bank, N.A. (2009-08) 14 of 15

 

  

By: Union Bank, National Association, "Custodian"           /s/ Margaret Bond  
  Authorized Signature           Margaret Bond, Vice President     Name & Title
          3/11/2011     Date                 Authorized Signature              
  Name & Title                 Date  

 

© Union Bank, N.A. (2009-08) 15 of 15

 

 

Appendix A

 

COUNTRY/MARKET   SUB-CUSTODIAN   DEPOSITORY  

COMPULSORY

DEPOSITORY

 

FOREIGN/

EMERGING

MARKET

 

SETTLEMENT

STANDARD

Australia   National Australia Bank   Government Debt: The Reserve Bank
Information and Transfer System Corporate and Government Bond: Austraclear
Equities: Clearing House Electronic Sub- register System   Yes   Foreign  
Contractual Austria   Bank Austria   Oesterreichischi Kontrollbank AG   Yes  
Foreign   Contractual Belgium   BNP Paribas Belgium   Government Instruments:
Banque Nationale de Belgique Equities and Corporate Debt: Euroclear Belgium  
Yes   Foreign   Actual Canada   RBC Dexia Investor Services   The Canadian
Depository for Securities Limited   Yes   Foreign   Contractual Denmark   Danske
Bank   VP Securities Services   Yes   Foreign   Contractual Euroclear  
Euroclear Bank   Not Applicable   NA   Foreign   Contractual Finland   SEBanken
Finland   Euroclear Finland   Yes   Foreign   Actual France   CACEIS Bank  
Euroclear France   Yes   Foreign   Contractual Germany   Deutsche Bank  
Clearstream Banking Frankfurt   Yes   Foreign   Contractual Hong Kong   Standard
Chartered Bank   Government Instruments: Hong Kong Monetary Authority Equities
and Corporate Debt: Central Clearing and Settlement System   Yes   Foreign  
Contractual Ireland   Bank of Ireland   Euroclear UK   Yes   Foreign  
Contractual Italy   Deutsche Bank   Monte Titoli   Yes   Foreign   Contractual
Japan   The Bank of Tokyo Mitsubishi UFJ, Limited   Government Instruments: Bank
of Japan Equities and Corporate Bonds: Japan Securities Depository Center   Yes
  Foreign   Contractual Netherlands   Fortis Bank   Euroclear Nederlands   Yes  
Foreign   Contractual New Zealand   National Nominees   New Zealand Central
Securities Depository   Yes   Foreign   Contractual Norway   Nordea Bank Norge  
Verdipapirsentralen   Yes   Foreign   Contractual Portugal   Millennium BCP  
Central de Valores Mobiliarios   Yes   Foreign   Contractual Singapore   DBS
Bank   Central Depository (PTE) Limited   Yes   Foreign   Contractual South
Africa   Standard Bank of South Africa   Shares Transactions Totally Electronic
(STRATE)   Yes   Foreign   Contractual Spain   BNP Paribas   IBERCLEAR   Yes  
Foreign   Contractual Sweden   SEBanken   Vardepapperscentralen   Yes   Foreign
  Contractual Switzerland   UBS AG   SIX SIS AG   Yes   Foreign   Contractual
United Kingdom   HSBC Bank   Euroclear UK   Yes   Foreign   Contractual United
States   Union Bank N.A.   Equities and Fixed Income: The Depository   Yes   N/A
  Contractual

 

UNION BANK GLOBAL CUSTODYPage 1 of 412/31/2010 

 

  

COUNTRY/MARKET   SUB-CUSTODIAN   DEPOSITORY  

COMPULSORY

DEPOSITORY

 

FOREIGN/

EMERGING

MARKET

 

SETTLEMENT

STANDARD

       

Trust Company (DTC)

Equities: Citibank N.A. Government Bonds: Federal Reserve Bank

            Argentina   HSBC Bank Argentina   Caja de Valores   Yes   Emerging  
Actual Bangladesh   Standard Chartered Bank   Central Depository Bangladesh
Limited   Yes   Emerging   Actual Bermuda   Bank of Bermuda*   Bermuda
Securities Depository Limited   Yes   Emerging   Actual Botswana   Standard
Chartered Bank   Equities: Central Securities Depository of Botswana Government
Bonds: Bank of Botswana   No   Emerging   Actual Brazil   Citibank   Equities:
Companhia Brasileira de Liquidacao e Custodia Government Bonds: Sistema Especial
de Liquidacao e Custodia Other Fixed Income: Central de Custodia e de Liquidacao
de Titulos   Yes   Emerging   Actual Bulgaria   Unicredit Bulbank   Central
Securities Depository AD   Yes   Emerging   Actual Chile   Citibank   Deposito
Central de Valores   Yes   Emerging   Actual China   Standard Chartered Bank  
The China Securities Depository and Clearing Corporation Limited (CSDCC)   Yes  
Emerging   Actual Colombia   Citibank  

Government Bonds: Deposito Central de Valores

Equities and Other Fixed Income: Deposito Centralizado de Valores

  Yes   Emerging   Actual Cyprus   BNP Paribas   Equities: Clearing, Settlement
and Registration General Directoate (in Greece)   Yes   Emerging   Actual Czech
Republic   Ceskoslovenska Obchodni Banka   Government Bonds: Registracni Centrum
Ceske Narodni Banky Equities and Other Fixed Income: Stredisko Cennych Papiru  
Yes   Emerging   Actual Egypt   Citibank   Misr for Central Clearing, Depository
and Registry   Yes   Emerging   Actual Estonia   SEBanken   Central Depository
Limited   Yes   Emerging   Actual Ghana   Stanbic Bank Ghana   Equities: Ghana
Securities Depository Company Government Debt: Bank of Ghana   Yes   Emerging  
Actual Greece   BNP Paribas   Equities: Clearing, Settlement and Registration
General Directoate Government Instruments: Bank of Greece   Yes   Emerging  
Actual Hungary   Unicredit Bank Hungary   Central Clearing House and Depository
Limited   Yes   Emerging   Actual Iceland   Deutsche Bank   Icelandic Securities
Depository Limited   Yes   Emerging   Actual

 

UNION BANK GLOBAL CUSTODYPage 2 of 412/31/2010 

 

  

COUNTRY/MARKET   SUB-CUSTODIAN   DEPOSITORY  

COMPULSORY

DEPOSITORY

 

FOREIGN/

EMERGING

MARKET

 

SETTLEMENT

STANDARD

India   Standard Chartered Bank  

Government Bonds: Reserve Bank of India Equities and Corporate Bonds: National
Securities Depository Ltd.

Equities and Corporate Bonds: Central Depository Services Limited

  Yes   Emerging   Actual Indonesia   Standard Chartered Bank   PT. Kustodian
Sentral Efek Indonesia   Yes   Emerging   Actual Israel   Bank Leumi   Tel Aviv
Stock Exchange Clearing House   Yes   Emerging   Actual Kenya   Standard
Chartered Bank   Central Depository Settlement Corporation   Yes   Emerging  
Actual Korea (Republic of)   Standard Chartered First Korea Bank   Korean
Securities Depository   Yes   Emerging   Actual Jordan   HSBC Bank Jordan  
Securities Depository Centre   Yes   Emerging   Actual Latvia   AS SEB Banka  
Latvian Central Depository   Yes   Emerging   Actual Lithuania   AB SEB Bankas  
Central Securities Depository of Lithuania   Yes   Emerging   Actual Malawi  
Standard Bank Malawi   None   NA   Emerging   Actual Malaysia   Standard
Chartered Bank   Government Bonds: Bank Negara Malaysia Equities and Other Fixed
Income: Bursa Malaysian Depository   Yes   Emerging   Actual Mauritius  
Standard Chartered Bank   Central Depository and Settlement Company   Yes  
Emerging   Actual Mexico   Banco National de Mexico S.A. (a subsidiary of
Citicorp)   Instituto Para el Deposito de Valores (S.D. INDEVAL)   Yes  
Emerging   Actual Morocco   Banque Marocaine de Commerce et d L'lndustrie  
Maroclear   Yes   Emerging   Actual Namibia   Standard Bank Namibia   None   NA
  Emerging   Actual Nigeria   Stanbic IBTC Bank   Central Securities Clearing
Systems   Yes   Emerging   Actual Pakistan   Standard Chartered Bank   Equities
and Other Fixed Income: Central Depository Company of Pakistan Ltd.   Yes  
Emerging   Actual Peru   Citibank   CAVALI   Yes   Emerging   Actual Philippines
  Standard Chartered Bank  

Equities: Philippine Depository and Trust Company

Government Bonds: Bureau of Treasury

  Yes   Emerging   Actual Poland   Citibank Handlowy w Warszawie (a subsidiary
of Citibank)  

Government Bonds: National Bank of Poland

Equities and Other Fixed Income: National Depository of Securities

  Yes   Emerging   Actual Romania   Unicredit Bank Romania   Equities: Central
Depository   Yes   Emerging   Actual Russia   Citibank   Government Bonds: Bank
for Foreign Trade of the Russian Federation Equities, GKO’s and OFZ’s: National
Depository Center and the Depository Clearing Company   No   Emerging   Actual

 

UNION BANK GLOBAL CUSTODYPage 3 of 412/31/2010 

 

 

COUNTRY/MARKET   SUB-CUSTODIAN   DEPOSITORY  

COMPULSORY

DEPOSITORY

 

FOREIGN/

EMERGING

MARKET

 

SETTLEMENT

STANDARD

Serbia   Unicredit Bank Serbia JSC   Central Registry, Depository and Clearing
House   Yes   Emerging   Actual Slovakia   Ceskoslovenska Obchodni Banka  
Central Securities Depository   Yes   Emerging   Actual Slovenia   Unicredit
Banka Slovenija   Central Securities Clearing Corporation   Yes   Emerging  
Actual Sri Lanka   Standard Chartered Bank   Central Depository System   Yes  
Emerging   Actual Taiwan   Standard Chartered Bank   Taiwan Securities
Depository and Clearing Corporation   Yes   Emerging   Actual Tanzania  
Standard Chartered Bank   Central Securities Depository   Yes   Emerging  
Actual Thailand   Standard Chartered Bank   Thailand Securities Depository
Company Ltd.   Yes   Emerging   Actual Tunisia   Banque Internationale Arabe de
Tunsie   Societe Tunisienne Interprofessionnelle de Compenestion et de depot des
Valeurs Mobilieres (STICODEVAM)   Yes   Emerging   Actual Turkey   Citibank  
Government Bonds: Central Bank of Turkey Equities and Other Fixed Income:
Central Registry Agency   Yes   Emerging   Actual Uganda   Standard Chartered
Bank   Government Debt: Bank of Uganda Equities: Securities Central Depository
(under conversion)  

Yes

No

  Emerging   Actual Ukraine   Unicredit Bank   Equities and Corporate Bonds:
Inter-Regional Securities Union Government Securities: National Bank of Ukraine
  Yes   Emerging   Actual Venezuela   Citibank   Equities, Corporate and
Government Debt: Caja de Valores de Venezuela   No   Emerging   Actual Vietnam  
Standard Chartered Bank   Vietnam Securities Depository   Yes   Emerging  
Actual Zambia   Standard Chartered Bank   LuSE Central Securities Depository  
Yes   Emerging   Actual Zimbabwe   Barclays Bank   None   NA   Emerging   Actual

  

* Bermuda is available for settlement and safekeeping; however, additional
documentation may be required.

  

UNION BANK GLOBAL CUSTODYPage 4 of 412/31/2010 

 

  

 [tlogo.jpg]

 

SCHEDULE OF FEES

Harris & Harris Group

Effective December 2010

 

INSTITUTIONAL CUSTODY SERVICES  

New account set-up 

Free receipt of assets transferring into Union Bank

Asset safekeeping

Trade settlements

Income collections

Capital changes and proxy processing

Daily cash sweep to HighMark Diversified Money Market Fund

Account statement – Holdings and Transactions

Dedicated relationship manager assigned to your account

Account access to Online Trust & Custody

 

ANNUAL ADMINISTRATION FEE   Assets to $500 Million One basis point per annum*
(1 BP on AUA)             Assets in excess of $500 Million Three Quarters of One
basis point*
(3/4ths of 1 BP on AUA)             Physical Securities Five basis points per
annum
(5 BP on AUA)

 

ITEMIZED FEES   Transaction Fee       Depository Eligible $5     Depository
Ineligible $20             Disbursements – Wires/Checks $10            
Additional Statements $10             Out-of-Pocket Expenses As Incurred

 

MINIMUM ANNUAL FEE   Per Account $5000

 

DISCLOSURES   Market value used for fee calculations on fee invoices may differ
slightly from market values on client statements  due to posting of accruals,
late pricing of securities, and/or other timing issues.           A transaction
is defined as any activity affecting assets including purchases, sales, tender
offers, stock dividends, free deliveries, maturities, exchanges, redemptions,
etc. Fees for foreign securities, foreign exchange transactions, international
wires, and non-standard services are quoted separately. Union Bank retains the
right to charge special fees for extraordinary services not covered in this fee
schedule.           You may be assessed an overdraft charge for any negative
balance in your account, provided such advance or overdraft is not related to
Bank errors or omissions. Current overdraft charges are at the Bank’s Prime Rate
+ 4% per annum for the amount and number of days any negative balance exists in
your account. This rate may be subject to change upon notification. Please see
your account Agreement for additional information.           Fees are charged
quarterly against the Client’s account unless otherwise agreed. This fee
schedule is subject to change upon thirty (30) days written notice.          
*includes cash sweep

 

ACKNOWLEDGMENT         Client Name

 

    /s/ Daniel B. Wolfe   3/11/2011     Authorized Client Representative   Date
              /s/ Margaret Bond   3/11/2011     Union Bank Representative   Date