Exhibit (g)(2)
FORM OF CUSTODY AGREEMENT
THIS AGREEMENT is made effective the 26th day of July, 2000, by and
between STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the
laws of the commonwealth of Massachusetts, having its principal office at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000("Xxxxx Street"), and each
registered investment company listed on Schedule A hereto, as it may be amended
from time to time, incorporated herein by reference, each having its principal
office and place of business at Two Renaissance Square, 00 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 (each a "Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint State Street as custodian of the
assets of the Fund's investment portfolio or portfolios (each a "Portfolio", and
collectively the "Portfolios"); and
WHEREAS, State Street is willing to accept such appointment on the
terms and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and
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appoints State Street as custodian of the investment securities,
interests in loans and other non-cash investment property, and monies
at any time owned by each of the Portfolios and delivered to State
Street as custodian hereunder ("Assets").
2. REPRESENTATIONS AND WARRANTIES.
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A. Fund hereby represents, warrants and acknowledges to State
Street:
1. That it is a trust duly organized and existing and in good
standing under the laws of its state of organization, and
that it is registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
2. That it has the requisite power and authority under
applicable law and its declaration of trust) to enter into
this Agreement; it has taken all requisite action necessary
to appoint State Street as custodian for the Portfolios;
this Agreement has been duly executed and delivered by Fund;
and this Agreement constitutes a legal, valid and binding
obligation of Fund, enforceable in accordance with its
terms.
B. State Street hereby represents, warrants and acknowledges to
Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the commonwealth of
Massachusetts; and
2. That it has the requisite power and authority under applicable
law, its charter and its bylaws to enter into and perform this
Agreement; this Agreement has been duly executed and delivered by
State Street; and this Agreement constitutes a legal, valid and
binding obligation of State Street, enforceable in accordance
with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
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A. Delivery of Assets. Except as permitted by the 1940 Act, Fund will
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deliver or cause to be delivered to State Street on the effective date
hereof, or as soon thereafter as practicable, and from time to time
thereafter, all Assets acquired by, owned by or from time to time
coming into the possession of each of the Portfolios during the term
hereof. State Street has no responsibility or liability whatsoever for
or on account of assets not so delivered.
B. Delivery of Accounts and Records. Fund will turn over or cause to be
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turned over to State Street all of each Portfolio's relevant accounts
and records needed by State Street to perform its duties and
responsibilities hereunder fully and properly. State Street may rely
conclusively on the completeness and correctness of such accounts and
records.
C. Delivery of Assets to Third Parties. State Street will receive
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delivery of and keep safely the Assets of each Portfolio segregated in
a separate account. Upon delivery of any such Assets to a subcustodian
appointed pursuant hereto (hereinafter referred to as "Subcustodian"),
State Street will create and maintain records identifying such Assets
as belonging to the applicable Portfolio. State Street is responsible
for the safekeeping of the Assets only until they have been
transmitted to and received by other persons as permitted under the
terms hereof, except for Assets transmitted to Subcustodians, for
which State Street remains responsible to the extent provided herein.
State Street may participate directly or indirectly through a
subcustodian in the Depository Trust Company (DTC), Treasury/Federal
Reserve Book Entry System (Fed System), Participant Trust Company
(PTC) or other depository approved by Fund (as such entities are
defined at 17 CFR Section 270.17f-4(b)) (each a "Depository" and
collectively the "Depositories"). State Street will be responsible to
Fund for any loss, damage or expense suffered or incurred by Fund
resulting from the actions or omissions of any Depository only to the
same extent such Depository is responsible to State Street.
D. Registration. State Street will at all times hold registered Assets in
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the name of State Street as custodian, the applicable Portfolio, or a
nominee of either of them, unless specifically directed by
Instructions, as hereinafter defined, to hold such registered Assets
in so-called "street name;" provided that, in any event, State Street
will hold all such Assets in an account of State Street as custodian
containing only Assets of the applicable Portfolio, or only assets
held by State Street as a fiduciary or custodian
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for customers; and provided further, that State Street's records at
all times will indicate the Portfolio or other customer for which such
Assets are held and the respective interests therein. If, however,
Fund directs State Street to maintain Assets in "street name",
notwithstanding anything contained herein to the contrary, State
Street will be obligated only to utilize its best efforts to timely
collect income due the Portfolio on such Assets and to notify the
Portfolio of relevant information, such as maturities and pendency of
calls, and corporate actions including, without limitation, calls for
redemption, tender or exchange offers, declaration, record and payment
dates and amounts of any dividends or income, reorganization,
recapitalization, merger, consolidation, split-up of shares, change of
par value, or conversion ("Corporate Actions"). All Assets and the
ownership thereof by Portfolio will at all times be identifiable on
the records of State Street. Fund agrees to hold State Street and its
nominee harmless for any liability as a shareholder of record of
securities held in custody.
E. Exchange. Upon receipt of Instructions, State Street will exchange,
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or cause to be exchanged, Assets held for the account of a Portfolio
for other Assets issued or paid in connection with any Corporate
Action or otherwise, and will deposit any such Assets in accordance
with the terms of any such Corporate Action. Without Instructions,
State Street is authorized to exchange Assets in temporary form for
Assets in definitive form, to effect an exchange of shares when the
par value of stock is changed, and, upon receiving payment therefor,
to surrender bonds or other Assets at maturity or when advised of
earlier call for redemption, except that State Street will receive
Instruction prior to surrendering any convertible security.
F. Purchases of Investments -- Other Than Options and Futures. On each
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business day on which a Portfolio makes a purchase of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer through
whom the purchase was made; and
9. Whether the Asset is to be received in certificated form or via a
specified Depository.
In accordance with such Instructions, State Street will pay for out of
monies held for the purchasing Portfolio, but only insofar as such
monies are available for such purpose, and receive the Assets so
purchased by or for the account of such Portfolio,
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except that State Street, or a Subcustodian, may in its sole
discretion advance funds to such Portfolio which may result in an
overdraft because the monies held on behalf of such Portfolio are
insufficient to pay the total amount payable upon such purchase.
Except as otherwise instructed by Fund, State Street will make such
payment only upon receipt of Assets: (a) by State Street; (b) by a
clearing corporation of a national exchange of which State Street is a
member; or (c) by a Depository. Notwithstanding the foregoing, (i)
State Street may release funds to a Depository prior to the receipt of
advice from the Depository that the Assets underlying a repurchase
agreement have been transferred by book-entry into the account
maintained with such Depository by State Street on behalf of its
customers; provided that State Street's instructions to the Depository
require that the Depository make payment of such funds only upon
transfer by book-entry of the Assets underlying the repurchase
agreement in such account; (ii) State Street may make payment for time
deposits, call account deposits, currency deposits and other deposits,
foreign exchange transactions, futures contracts or options, before
receipt of an advice or confirmation evidencing said deposit or entry
into such transaction; and (iii) State Street may make, or cause a
Subcustodian to make, payment for the purchase of Assets the
settlement of which occurs outside of the United States of America in
accordance with generally accepted local custom and market practice.
G. Sales and Deliveries of Investments -- Other Than Options and Futures.
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On each business day on which a Portfolio makes a sale of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by the Portfolio upon such sale;
and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
State Street will deliver or cause to be delivered the Assets thus
designated as sold for the account of the selling Portfolio as
specified in the Instructions. Except as otherwise instructed by Fund,
State Street will make such delivery upon receipt of: (a) payment
therefor in such form as is satisfactory to State Street; (b) credit
to the account of State Street with a clearing corporation of a
national securities exchange of which State Street is a member; or (c)
credit to the account maintained by State Street on behalf of its
customers with a Depository. Notwithstanding the foregoing: (i) State
Street will deliver Assets held in physical form in accordance with
"street
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delivery custom" to a broker or its clearing agent; or (ii)
State Street may make, or cause a Subcustodian to make, delivery of
Assets the settlement of which occurs outside of the United States of
America upon payment therefor in accordance with generally accepted
local custom and market practice.
H. Purchases or Sales of Options and Futures. On each business day on
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which a Portfolio makes a purchase or sale of the options and/or
futures listed below, Fund will deliver to State Street Instructions
specifying with respect to each such purchase or sale:
1. If applicable, the name of the Portfolio making such purchase or
sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
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e. The need for a segregated margin account (in addition to
Instructions, and if not already in the possession of State
Street, Fund will deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement, incorporated herein by reference); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Assets Pledged or Loaned. If specifically allowed for in the
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prospectus of a Portfolio, and subject to such additional terms and
conditions as State Street may require:
1. Upon receipt of Instructions, State Street will release or cause
to be released Assets to the designated pledgee by way of pledge
or hypothecation to secure any loan incurred by a Portfolio;
provided, however, that State Street will release Assets only
upon payment to State Street of the monies borrowed, except that
in cases where additional collateral is required to secure a
borrowing already made, further Assets may be released or caused
to be released for that purpose. Upon receipt of Instructions,
State Street will pay, but only from funds available for such
purpose, any such loan upon redelivery to it of the Assets
pledged or hypothecated therefor and upon surrender of the note
or notes evidencing such loan.
2. Upon receipt of Instructions, State Street will release Assets to
the designated borrower; provided, however, that the Assets will
be released only upon deposit with State Street of full cash
collateral as specified in such Instructions, and that the
lending Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets. Upon receipt of
Instructions and the loaned Assets, State Street will release the
cash collateral to the borrower.
J. Routine Matters. State Street will, in general, attend to all
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routine and mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with the Assets
except as may be otherwise provided herein or upon Instruction from
Fund.
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K. Deposit Accounts. State Street will open and maintain one or more
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special purpose deposit accounts for each Portfolio in the name of
State Street in such banks or trust companies (including, without
limitation, affiliates of State Street) as may be designated by it or
Fund in writing ("Accounts"), subject only to draft or order by State
Street upon receipt of Instructions. State Street will deposit all
monies received by State Street from or for the account of a Portfolio
in an Account maintained for such Portfolio. Subject to Section 5.L
hereof, State Street agrees:
1. To make Fed Funds available to the applicable Portfolio at 9:00
a.m., Kansas City time, on the second business day after deposit
of any check into an Account, in the amount of the check;
2. To make funds available immediately upon a deposit made by
Federal Reserve wire; and
3. To make funds available on the next business day after deposit of
ACH wires.
L. Income and Other Payments. State Street will:
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1. Collect, claim and receive and deposit for the account of the
applicable Portfolio all income (including income from the
Accounts) and other payments which become due and payable on or
after the effective date hereof with respect to the Assets, and
credit the account of such Portfolio in accordance with the
schedule attached hereto as Exhibit A. If, for any reason, a
Portfolio is credited with income that is not subsequently
collected, State Street may reverse that credited amount. If
monies are collected after such reversal, State Street will
credit the Portfolio in that amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with (a) the collection, receipt and deposit of such
income and other payments, including but not limited to the
presentation for payment of all coupons and other income items
requiring presentation; and all other Assets which may mature or
be called, redeemed, retired or otherwise become payable and
regarding which State Street has actual knowledge, or should
reasonably be expected to have knowledge; and (b) the endorsement
for collection, in the name of Fund or a Portfolio, of all
checks, drafts or other negotiable instruments.
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Xxxxx Xxxxxx, however, will not be required to institute suit or take
other extraordinary action to enforce collection except upon receipt
of Instructions and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions. State Street
will receive, claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to Instructions.
M. Proxies and Notices. State Street will promptly deliver or mail (or
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have delivered or mailed) to Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices, requests
or announcements affecting or relating to Assets and will, upon
receipt of Instructions, execute and deliver or mail (or cause its
nominee to execute and deliver or mail) such proxies or other
authorizations as may be required. Except as provided herein or
pursuant to Instructions hereafter received by State Street, neither
it nor its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of such
Assets, or give any consent, approval or waiver with respect thereto,
or take any other similar action.
N. Disbursements. State Street will pay or cause to be paid, insofar as
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funds are available for the purpose, bills, statements and other
obligations of each Portfolio (including but not limited to
obligations in connection with the conversion, exchange or surrender
of Assets, interest charges, dividend disbursements, taxes, management
fees, custodian fees, legal fees, auditors' fees, transfer agents'
fees, brokerage commissions, compensation to personnel, and other
operating expenses of such Portfolio) pursuant to Instructions setting
forth the name of the person to whom payment is to be made, and the
amount and purpose of the payment.
O. Daily Statement of Accounts. State Street will, within a reasonable
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time, render to Fund a detailed statement of the amounts received or
paid and of Assets received or delivered for the account of each
Portfolio during each business day. State Street will maintain such
books and records as are necessary to enable it to render, from time
to time upon request by Fund, a detailed statement of the Assets.
State Street will permit, and upon Instruction will cause any
Subcustodian to permit, such persons as are authorized by Fund,
including Fund's independent public accountants, reasonable access to
such records or will provide reasonable confirmation of the contents
of such records, and if demanded, State Street will permit, and will
cause any Subcustodian to permit, federal and state regulatory
agencies to examine the Assets, books and records of the Portfolios.
P. Appointment of Subcustodians. Notwithstanding any other provisions
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hereof:
1. All or any of the Assets may be held in State Street's own
custody or in the custody of one or more other banks or trust
companies (including, without limitation, affiliates of State
Street) acting as Subcustodians as may be selected by State
Street. Any such Subcustodian selected by State Street must have
the qualifications required for a custodian under the 0000 Xxx.
Xxxxx Xxxxxx will be responsible to the applicable Portfolio for
any loss, damage or expense suffered or incurred by such
Portfolio resulting from the
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actions or omissions of any Subcustodians selected and appointed
by State Street (except Subcustodians appointed at the request of
Fund and as provided in Subsection 2 below) to the same extent
State Street would be responsible to Fund hereunder if it
committed the act or omission itself.
2. Upon request of Fund, State Street will contract with other
Subcustodians reasonably acceptable to State Street for purposes
of (a) effecting third-party repurchase transactions with banks,
brokers, dealers, or other entities through the use of a common
custodian or subcustodian, or (b) providing depository and
clearing agency services with respect to certain variable rate
demand note securities, or (c) for other reasonable purposes
specified by Fund; provided, however, that State Street will be
responsible to Fund for any loss, damage or expense suffered or
incurred by Fund resulting from the actions or omissions of any
such Subcustodian only to the same extent such Subcustodian is
responsible to State Street. Fund may review State Street's
contracts with such Subcustodians.
Q. Foreign Custody Manager.
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1. Delegation to State Street as FCM. The Fund, pursuant to
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resolution adopted by its Board of Trustees or Directors (the
"Board"), hereby delegates to State Street, subject to Section
(b) of Rule 17f-5, the responsibilities set forth in this Section
Q with respect to Foreign Assets held outside the United States,
and State Street hereby accepts such delegation, as Foreign
Custody Manager ("FCM") of each Portfolio.
2. Definitions. Capitalized terms in this Section Q have the
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following meanings:
"Country Risk" means all factors reasonably related to the
systemic risk of holding Foreign Assets in a particular country
including, but not limited to, such country's political
environment; economic and financial infrastructure (including
financial institutions such as any Mandatory Securities
Depositories operating in the country); prevailing or developing
custody and settlement practices; and laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held
in custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section
(a)(1) of Rule 17f-5, except that the term does not include
Mandatory Securities Depositories.
"Foreign Assets" means any of the Portfolios' investments
(including foreign currencies) for which the primary market is
outside the United States and such cash and cash equivalents in
amounts deemed by Fund to be reasonably necessary to effect the
Portfolios' transactions in such investments.
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"Foreign Custody Manager" or "FCM" has the meaning set forth in
section (a)(2) of Rule 17f-5.
"Mandatory Securities Depository" means a foreign securities
depository or clearing agency that, either as a legal or
practical matter, must be used if the Fund determines to place
Foreign Assets in a country outside the United States (i) because
required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing
agency; or (iii) because maintaining or effecting trades in
securities outside the foreign securities depository or clearing
agency is not consistent with prevailing or developing custodial
or market practices.
3. Countries Covered. The FCM is responsible for performing the
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delegated responsibilities defined below only with respect to the
countries and custody arrangements for each such country listed
on Exhibit C hereto , which may be amended from time to time by
the FCM. The FCM will list on Exhibit C the Eligible Foreign
Custodians selected by the FCM to maintain the assets of each
Portfolio. Mandatory Securities Depositories are listed on
Exhibit D hereto, which Exhibit D may be amended from time to
time by the FCM. The FCM will provide amended versions of
Exhibits C and D in accordance with subsection 7 of this Section
Q.
Upon the receipt by the FCM of Instructions to open an account,
or to place or maintain Foreign Assets, in a country listed on
Exhibit C, and the fulfillment by the Fund of the applicable
account opening requirements for such country, the FCM is deemed
to have been delegated by the Board responsibility as FCM with
respect to that country and to have accepted such delegation.
Following the receipt of Instructions directing the FCM to close
the account of a Portfolio with the Eligible Foreign Custodian
selected by the FCM in a designated country, the delegation by
the Board to State Street as FCM for that country is deemed to
have been withdrawn and State Street will immediately cease to be
the FCM of the Portfolio with respect to that country.
The FCM may withdraw its acceptance of delegated responsibilities
with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties
agree in writing) after receipt of any such notice by the Fund,
State Street will have no further responsibility as FCM to a
Portfolio with respect to the country as to which State Street's
acceptance of delegation is withdrawn.
4. Scope of Delegated Responsibilities.
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a. Selection of Eligible Foreign Custodians. Subject to the
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provisions of this Section Q, the FCM may place and maintain
the Foreign Assets in the care of the Eligible Foreign
Custodian selected by the
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FCM in each country listed on Exhibit C, as amended from time to
time.
In performing its delegated responsibilities as FCM to place or
maintain Foreign Assets with an Eligible Foreign Custodian, the
FCM will determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians
in the country in which the Foreign Assets will be held by that
Eligible Foreign Custodian, after considering all factors
relevant to the safekeeping of such assets, including, without
limitation, those set forth in Rule 17f-5(c)(1)(i) through (iv).
b. Contracts With Eligible Foreign Custodians. The FCM will
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determine that the contract (or the rules or established
practices or procedures in the case of an Eligible Foreign
Custodian that is a foreign securities depository or clearing
agency) governing the foreign custody arrangements with each
Eligible Foreign Custodian selected by the FCM will provide
reasonable care for the Foreign Assets held by that Eligible
Foreign Custodian based on the standards applicable to custodians
in the particular country. Each such contract will include the
provisions set forth in Rule 17f-5(c)(2)(I)(A) through (F), or,
in lieu of any or all of the provisions set forth in said (A)
through (F), such other provisions that the FCM determines will
provide, in their entirety, the same or greater level of care and
protection for the Foreign Assets as the provisions set forth in
said (A) through (F) in their entirety.
c. Monitoring. In each case in which the FCM maintains Foreign
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Assets with an Eligible Foreign Custodian selected by the FCM,
the FCM will establish a system to monitor (a) the
appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (b) the contract governing the
custody arrangements established by the FCM with the Eligible
Foreign Custodian. In the event the FCM determines that the
custody arrangements with an Eligible Foreign Custodian it has
selected are no longer appropriate, the FCM will notify the Board
in accordance with subsection 7 of this Section Q.
5. Guidelines for the Exercise of Delegated Authority. For purposes of
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this Section Q, the Board will be solely responsible for considering
and determining to accept such Country Risk as is incurred by placing
and maintaining the Foreign Assets in each country for which State
Street is serving as FCM of a Portfolio, and the Board will be solely
responsible for monitoring on a continuing basis such Country Risk to
the extent that the Board considers necessary or appropriate. The
Fund, on behalf of the Portfolios, and State Street each expressly
acknowledge that the FCM will
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not be delegated any responsibilities under this Section Q with
respect to Mandatory Securities Depositories.
6. Standard of Care as FCM of a Portfolio. In performing the
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responsibilities delegated to it, the FCM agrees to exercise
reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management
investment companies registered under the 1940 Act would
exercise.
7. Reporting Requirements. The FCM will report the withdrawal of the
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Foreign Assets from an Eligible Foreign Custodian and the
placement of such Foreign Assets with another Eligible Foreign
Custodian by providing to the Board amended Exhibits C and D at
the end of the calendar quarter in which an amendment to either
Schedule has occurred. The FCM will make written reports
notifying the Board of any other material change in the foreign
custody arrangements of a Portfolio described in this Section Q
after the occurrence of the material change.
8. Representations with Respect to Rule 17f-5. The FCM represents to
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the Fund that it is a U.S. Bank as defined in section (a)(7) of
Rule 17f-5.
The Fund represents to State Street that the Board has determined
that it is reasonable for the Board to rely on State Street to
perform the responsibilities delegated pursuant to this Contract
to State Street as the FCM of each Portfolio.
9. Effective Date and Termination of State Street as FCM. The
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Board's delegation to State Street as FCM of a Portfolio will be
effective as of the date hereof and will remain in effect until
terminated at any time, without penalty, by written notice from
the terminating party to the non-terminating party. Termination
will become effective thirty days after receipt by the non-
terminating party of such notice. The provisions of subsection 3
of this Section Q govern the delegation to and termination of
State Street as FCM of the Fund with respect to designated
countries.
R. Accounts and Records Property of Fund. State Street acknowledges that
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all of the accounts and records maintained by State Street pursuant
hereto are the property of Fund, and will be made available to Fund
for inspection or reproduction within a reasonable period of time,
upon demand. State Street will assist Fund's independent auditors, or
upon the prior written approval of Fund, or upon demand, any
regulatory body, in any requested review of Fund's accounts and
records, provided that Fund will reimburse State Street for all
expenses and employee time invested in any such review outside of
routine and normal periodic reviews. Upon receipt from Fund of the
necessary information or instructions, State Street will supply
information from the books and records it maintains for Fund that Fund
may reasonably request for tax returns, questionnaires, periodic
reports to shareholders and such other reports and information
requests as Fund and State Street may agree upon from time to time.
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S. Adoption of Procedures. State Street and Fund hereby adopt the Funds
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Transfer Operating Guidelines attached hereto as Exhibit B. State
Street and Fund may from time to time adopt such additional procedures
as they agree upon, and State Street may conclusively assume that no
procedure approved or directed by Fund, Fund's or Portfolio's
accountants or other advisors conflicts with or violates any
requirements of the prospectus, declaration of trust, any applicable
law, rule or regulation, or any order, decree or agreement by which
Fund may be bound. Fund will be responsible for notifying State Street
of any changes in statutes, regulations, rules, requirements or
policies which may impact State Street's responsibilities or
procedures under this Agreement.
T. Advances. Fund will pay on demand any advance of cash or securities
--------
made by State Street or any Subcustodian, in its sole discretion, for
any purpose (including but not limited to securities settlements,
purchase or sale of foreign exchange or foreign exchange contracts and
assumed settlement) for the benefit of any Portfolio. Any such cash
advance will be subject to an overdraft charge at the rate set forth
in the then-current fee schedule from the date advanced until the date
repaid. As security for each such advance, Fund hereby grants State
Street and such Subcustodian a lien on and security interest in all
Assets at any time held for the account of the applicable Portfolio,
including without limitation all Assets acquired with the amount
advanced. Should Fund fail to promptly repay the advance, State Street
and such Subcustodian may utilize available cash and dispose of such
Portfolio's Assets pursuant to applicable law to the extent necessary
to obtain reimbursement of the amount advanced and any related
overdraft charges.
U. Exercise of Rights; Tender Offers. Upon receipt of Instructions, State
---------------------------------
Street will: (1) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that
the new Assets, if any, are to be delivered to State Street; and (2)
deposit securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be paid or delivered to
State Street or the tendered securities are to be returned to State
Street.
V. Fund Shares.
------------
1. Fund will deliver to State Street Instructions with respect to
the declaration and payment of any dividend or other distribution
on the shares of capital stock of a Portfolio ("Fund Shares") by
a Portfolio. On the date specified in such Instruction, State
Street will pay out of the monies held for the account of the
Portfolio, insofar as it is available for such purposes, and
credit to the account of the Dividend Disbursing Agent for the
Portfolio, the amount specified in such Instructions.
2. Whenever Fund Shares are repurchased or redeemed by a Portfolio,
Portfolio or its agent will give State Street Instructions
regarding the aggregate dollar amount to be paid for such shares.
Upon receipt of such Instruction, State
13
Street will charge such aggregate dollar amount to the account of
the Portfolio and either deposit the same in the account
maintained for the purpose of paying for the repurchase or
redemption of Fund Shares or deliver the same in accordance with
such Instruction. State Street has no duty or responsibility to
determine that Fund Shares have been removed from the proper
shareholder accounts or that the proper number of Fund Shares
have been canceled and removed from the shareholder records.
3. Whenever Fund Shares are purchased from Fund, Fund will deposit
or cause to be deposited with State Street the amount received
for such shares. State Street has no duty or responsibility to
determine that Fund Shares purchased from Fund have been added to
the proper shareholder account or that the proper number of such
shares have been added to the shareholder records.
4. INSTRUCTIONS.
------------
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which State Street reasonably believes were given by a
designated representative of Fund. Fund will deliver to State Street,
prior to delivery of any Assets to State Street and thereafter from
time to time as changes therein are necessary, written Instructions
naming one or more designated representatives to give Instructions in
the name and on behalf of Fund, which Instructions may be received and
accepted by State Street as conclusive evidence of the authority of
any designated representative to act for Fund and may be considered to
be in full force and effect until receipt by State Street of notice to
the contrary. Unless such written Instructions delegating authority to
any person to give Instructions specifically limit such authority to
specific matters or require that the approval of anyone else will
first have been obtained, State Street will be under no obligation to
inquire into the right of such person, acting alone, to give any
Instructions whatsoever. If Fund fails to provide State Street any
such Instructions naming designated representatives, any Instructions
received by State Street from a person reasonably believed to be an
appropriate representative of Fund will constitute valid and proper
Instructions hereunder. The term "designated representative" may
include Fund's or a Portfolio's employees and agents, including
investment managers and their employees.
B. No later than the next business day immediately following each oral
Instruction, Fund will send State Street written confirmation of such
oral Instruction. At State Street's sole discretion, State Street may
record on tape, or otherwise, any oral Instruction whether given in
person or via telephone, each such recording identifying the date and
the time of the beginning and ending of such oral Instruction.
14
C. Fund will provide, upon State Street's request a certificate signed by
an officer or designated representative of Fund, as conclusive proof
of any fact or matter required to be ascertained from Fund hereunder.
Fund will also provide State Street Instructions with respect to any
matter concerning this Agreement requested by State Street. If State
Street reasonably believes that it could not prudently act according
to the Instructions, or the instruction or advice of Fund's or a
Portfolio's accountants or counsel, it may in its discretion, with
notice to Fund, not act according to such Instructions.
5. LIMITATION OF LIABILITY OF STATE STREET. State Street is not responsible or
---------------------------------------
liable for, and Fund will indemnify and hold State Street harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel
fees (including, without limitation, disbursements and the allocable cost
of in-house counsel), payments and liabilities which may be asserted
against or incurred by State Street or for which State Street may be held
to be liable, arising out of or attributable to:
A. State Street's action or failure to act pursuant hereto; provided that
State Street has acted in good faith and with reasonable care; and
provided further, that, in no event is State Street liable for
consequential, special, or punitive damages;
B. State Street's payment of money as requested by Fund, or the taking of
any action which might make it or its nominee liable for payment of
monies or in any other way; provided, however, that nothing herein
obligates State Street to take any such action or expend its own
monies except in its sole discretion;
C. State Street's action or failure to act hereunder upon any
Instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
properly executed, including any Instruction, communications, data or
other information received by State Street by means of the Systems, as
hereinafter defined, or any electronic system of communication;
D. State Street's action or failure to act in good faith reliance on the
advice or opinion of counsel for Fund or of its own counsel with
respect to questions or matters of law, which advice or opinion may be
obtained by State Street at the expense of Fund, or on the
Instruction, advice or statements of any officer or employee of Fund,
or Fund's accountants or other authorized individuals, and other
persons believed by it in good faith to be expert in matters upon
which they are consulted;
E. The purchase or sale of any securities or foreign currency positions.
Without limiting the generality of the foregoing, State Street is
under no duty or obligation to inquire into:
1. The validity of the issue of any securities purchased by or for
any Portfolio, or the legality of the purchase thereof or of
foreign currency positions, or evidence of ownership required by
Fund to be received by State Street, or the propriety of the
decision to purchase or the amount paid therefor;
15
2. The legality of the sale of any securities or foreign currency
positions by or for any Portfolio, or the propriety of the amount
for which the same are sold; or
3. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor, the legality
of the repurchase or redemption of any Fund Shares, or the
propriety of the amount to be paid therefor, or the legality of
the declaration of any dividend by Fund, or the legality of the
issue of any Fund Shares in payment of any stock dividend.
F. Any error, omission, inaccuracy or other deficiency in any Portfolio's
accounts and records or other information provided to State Street by
or on behalf of a Portfolio, or the failure of Fund to provide, or
provide in a timely manner, any accounts, records, or information
needed by State Street to perform its duties hereunder;
G. Fund's refusal or failure to comply with the terms hereof (including
without limitation Fund's failure to pay or reimburse State Street
under Section 5 hereof), Fund's negligence or willful misconduct, or
the failure of any representation or warranty of Fund hereunder to be
and remain true and correct in all respects at all times;
H. The use or misuse, whether authorized or unauthorized, of the Systems
or any electronic system of communication used hereunder, by Fund or
by any person who acquires access to the Systems or such other systems
through the terminal device, passwords, access instructions or other
means of access to such Systems or such other system which are
utilized by, assigned to or otherwise made available to Fund, except
to the extent attributable to any negligence or willful misconduct by
State Street;
I. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the payment
of money to be received by State Street on behalf of a Portfolio until
actually received; provided, however, that State Street will advise
Fund promptly if it fails to receive any such money in the ordinary
course of business and will cooperate with Fund toward the end that
such money is received;
J. Except as provided in Section 3.P hereof, loss occasioned by the acts,
omissions, defaults or insolvency of any broker, bank, trust company,
securities system or any other person with whom State Street may deal;
and
K. The failure or delay in performance of its obligations hereunder, or
those of any entity for which it is responsible hereunder, arising out
of or caused, directly or indirectly, by circumstances beyond the
affected entity's reasonable control, including, without limitation:
any interruption, loss or malfunction of any utility, transportation,
computer (hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot,
16
emergency, civil disturbance, terrorism, vandalism, explosions, labor
disputes, freezes, floods, fires, tornadoes, acts of God or public
enemy, revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, Fund will pay to
------------
State Street the compensation set forth in a separate fee schedule,
incorporated herein by reference, to be agreed to by Fund and State Street
from time to time, and, upon demand, reimbursement for State Street's cash
disbursements and reasonable out-of-pocket costs and expenses, including
attorney's fees and disbursements, incurred by State Street in connection
with the performance of services hereunder. State Street may charge such
compensation against monies held by it for the account of the Portfolios.
State Street will also be entitled to charge against any monies held by it
for the account of the Portfolios the amount of any loss, damage,
liability, advance, overdraft or expense for which it is entitled to
reimbursement from Fund, including but not limited to fees and expenses due
to State Street for other services provided to Fund by State Street. State
Street will be entitled to reimbursement by Fund for the losses, damages,
liabilities, advances, overdrafts and expenses of Subcustodians only to the
extent that (a) State Street would have been entitled to reimbursement
hereunder if it had incurred the same itself directly, and (b) State Street
is obligated to reimburse the Subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement is for a period of
--------------------
one (1) year. Thereafter, either Fund or State Street may terminate this
Agreement by notice in writing, delivered or mailed, postage prepaid, to
the other party and received not less than ninety (90) days prior to the
date upon which such termination will take effect. Upon termination hereof:
A. Fund will pay State Street its fees and compensation due hereunder and
its reimbursable disbursements, costs and expenses paid or incurred to
such date;
B. Fund will designate a successor custodian by Instruction to State
Street by the termination date. In the event no such Instruction has
been delivered to State Street on or before the date when such
termination becomes effective, then State Street may, at its option,
(i) choose as successor custodian a bank or trust company meeting the
qualifications for custodian set forth in the 1940 Act and having not
less than Two Million Dollars ($2,000,000) aggregate capital, surplus
and undivided profits, as shown by its last published report, or (ii)
apply to a court of competent jurisdiction for the appointment of a
successor or other proper relief, or take any other lawful action
under the circumstances; provided, however, that Fund will reimburse
State Street for its costs and expenses, including reasonable
attorney's fees, incurred in connection therewith; and
C. State Street will, upon payment of all sums due to State Street from
Fund hereunder or otherwise, deliver all Assets, duly endorsed and in
form for transfer, to the successor custodian, or as specified by the
court, at State Street's office. State Street will co-operate in
effecting changes in book-entries at all Depositories. Upon delivery
to a successor or as specified by the court, State Street will have no
further
17
obligations or liabilities hereunder. Thereafter such successor
will be the successor hereunder and will be entitled to
reasonable compensation for its services.
In the event that Assets remain in the possession of State Street after
the date of termination hereof for any reason other than State Street's
failure to deliver the same, State Street is entitled to compensation
as provided in the then-current fee schedule for its services during
such period, and the provisions hereof relating to the duties and
obligations of State Street will remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed
-------
to Fund at the address set forth above, or at such other address as
Fund may have designated to State Street in writing, will be deemed to
have been properly given to Fund hereunder. Notices, requests,
Instructions and other writings addressed to State Street at State
Street Kansas City, 801 Pennsylvania, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Custody Department, or to such other address as it may have
designated to Fund in writing, will be deemed to have been properly
given to State Street hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
-----------------------------
A. If State Street provides Fund direct access to the
computerized investment portfolio custody systems used by
State Street ("Systems") or if State Street and Fund agree to
utilize any electronic system of communication, Fund agrees to
implement and enforce appropriate security policies and
procedures to prevent unauthorized or improper access to or
use of the Systems or such other system.
B. Fund will preserve the confidentiality of the Systems and the
tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other
materials relevant to, the Systems and the business of State
Street or its affiliates ("Confidential Information"). Fund
agrees that it will not voluntarily disclose any such
Confidential Information to any other person other than its
own employees who reasonably have a need to know such
information pursuant hereto. Fund will return all such
Confidential Information to State Street upon termination or
expiration hereof.
C. Fund has been informed that the Systems are owned by or
licensed for use by State Street and its affiliates from one
or more third parties ("Licensors"), and Fund acknowledges
that State Street and Licensors have proprietary rights in and
to the Systems and all other State Street or Licensor
programs, code, techniques, know-how, data bases, supporting
documentation, data formats, and procedures, including without
limitation any changes or modifications made at the request or
expense or both of Fund (collectively, the "Protected
Information"). Fund acknowledges that the Protected
Information constitutes confidential material and trade
secrets of State Street and Licensors. Fund will preserve the
confidentiality of the Protected Information, and Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or
taking of Protected Information, residing or existing internal
or external to a computer, computer system, or computer
network, or the knowing and unauthorized accessing or causing
to be accessed of any computer, computer system,
18
or computer network, may be subject to civil liabilities and
criminal penalties under applicable law. Fund will so inform
employees and agents who have access to the Protected
Information or to any computer equipment capable of accessing
the same. Licensors are intended to be and are third party
beneficiaries of Fund's obligations and undertakings contained
in this Section.
D. Fund hereby represents and warrants to State Street that it
has determined to its satisfaction that the Systems are
appropriate and suitable for its use. THE SYSTEMS ARE PROVIDED
ON AN AS IS, AS AVAILABLE BASIS. STATE STREET EXPRESSLY
DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, EXCEPT THOSE WARRANTIES STATED EXPRESSLY
HEREIN.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio,
-------------------
the following provisions apply:
A. Each Portfolio will be regarded for all purposes hereunder as
a separate party apart from each other Portfolio. Unless the
context otherwise requires, with respect to every transaction
covered hereby, every reference herein to Fund is deemed to
relate solely to the particular Portfolio to which such
transaction relates. Under no circumstances will the rights,
obligations or remedies with respect to a particular Portfolio
constitute a right, obligation or remedy applicable to any
other Portfolio. The use of this single document to
memorialize the separate agreement as to each Portfolio is
understood to be for clerical convenience only and will not
constitute any basis for joining the Portfolios for any
reason.
B. Fund may appoint State Street as its custodian for additional
Portfolios from time to time by written notice, provided that
State Street consents to such addition. Rates or charges for
each additional Portfolio will be as agreed upon by State
Street and Fund in writing.
11. MISCELLANEOUS.
-------------
A. This Agreement will be construed according to, and the rights
and liabilities of the parties hereto will be governed by, the
laws of the commonwealth of Massachusetts, without reference
to the choice of laws principles thereof.
B. All terms and provisions hereof will be binding upon, inure to
the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9 hereof are
intended to and will continue after and survive the
expiration, termination or cancellation hereof.
19
D. No provisions hereof may be amended or modified in any manner
except by a written agreement properly authorized and executed
by each party hereto.
E. The failure of either party to insist upon the performance of
any terms or conditions hereof or to enforce any rights
resulting from any breach of any of the terms or conditions
hereof, including the payment of damages, will not be
construed as a continuing or permanent waiver of any such
terms, conditions, rights or privileges, but the same will
continue and remain in full force and effect as if no such
forbearance or waiver had occurred. No waiver, release or
discharge of any party's rights hereunder will be effective
unless contained in a written instrument signed by the party
sought to be charged.
F. The captions herein are included for convenience of reference
only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts,
each of which is deemed an original but all of which together
constitute one and the same instrument.
H. If any provision hereof is determined to be invalid, illegal,
in conflict with any law or otherwise unenforceable, the
remaining provisions hereof will be considered severable and
will not be affected thereby, and every remaining provision
hereof will remain in full force and effect and will remain
enforceable to the fullest extent permitted by applicable law.
I. The benefits of this Agreement may not be assigned by either
party nor may either party delegate all or a portion of its
duties hereunder without the prior written consent of the
other party. Notwithstanding the foregoing, Fund agrees that
State Street may delegate all or a portion of its duties to an
affiliate of State Street, provided that such delegation will
not reduce the obligations of State Street under this
Agreement.
J. Neither the execution nor performance hereof will be deemed to
create a partnership or joint venture by and between State
Street and Fund or any Portfolio.
K. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by either
party hereunder will not affect any rights or obligations of
the other party hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
STATE STREET BANK AND TRUST PILGRIM GNMA INCOME FUND, INC.
COMPANY
PILGRIM GROWTH AND INCOME FUND, INC.
By:__________________________
LEXINGTON MONEY MARKET TRUST
Title:_______________________
LEXINGTON NATURAL RESOURCES TRUST
20
By:_______________________________________
On behalf of each of the Funds
Title:____________________________________
21
SCHEDULE A
PILGRIM GNMA INCOME FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
LEXINGTON MONEY MARKET TRUST
LEXINGTON NATURAL RESOURCES TRUST
22
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
Foreign--Income will be credited contractually on pay day in the markets
noted with Contractual Income Policy. The markets noted with Actual income
policy will be credited income when it is received.
===================================================================================================================================
Market Income Policy Market Income Policy Market Income Policy
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Argentina Actual Hong Kong Contractual Poland Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Australia Contractual Hungary Actual Portugal Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Austria Contractual India Actual Russia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Bahrain Actual Indonesia Actual Singapore Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Bangladesh Actual Ireland Actual Slovak Republic Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Belgium Contractual Israel Actual South Africa Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Bermuda Actual Italy Contractual South Korea Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
* Bolivia Actual Ivory Coast Actual Spain Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Botswana Actual * Jamaica Actual Sri Lanka Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Brazil Actual Japan Contractual Swaziland Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Canada Contractual Jordan Actual Sweden Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Chile Actual Kenya Actual Switzerland Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
China Actual Lebanon Actual Taiwan Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Colombia Actual Luxembourg Actual Thailand Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Cyprus Actual Malaysia Actual * Trinidad & Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Czech Republic Actual Mauritius Actual * Tunisia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Denmark Contractual Mexico Actual Turkey Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Ecuador Actual Morocco Actual United Kingdom Contractual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Egypt Actual Namibia Actual United States See Attached
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Euro CDs Actual New Zealand Contractual Venezuela Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Finland Contractual Norway Contractual Zambia Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
France Contractual Oman Actual Zimbabwe Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Germany Contractual Pakistan Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Ghana Actual Peru Actual
----------------------- --------------------- --------------------- --------------------- --------------------- -------------------
Greece Actual Philippines Actual
===================================================================================================================================
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed with Income
Policy of Xxxxxxxxxxx.
00
Xxxxxx Xxxxxx--
===================================================================================================================================
Income Type DTC FED PTC Physical
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
Dividends Contractual N/A N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
Fixed Rate Interest Contractual Contractual N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
Variable Rate Interest Contractual Contractual N/A Actual
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
GNMA I N/A N/A Contractual PD +1 N/A
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
GNMA II N/A N/A Contractual PD *** N/A
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
Mortgages Actual Contractual Contractual Actual
---------------------------- ------------------------- -------------------------- ------------------------- -----------------------
Maturities Actual Contractual N/A Actual
===================================================================================================================================
Exceptions to the above Contractual Income Policy include securities that
are:
. Involved in a trade whose settlement either failed, or is pending over
the record date, (excluding the United States);
. On loan under a self directed securities lending program other than
State Street's own vendor lending program;
. Known to be in a condition of default, or suspected to present a risk
of default or payment delay;
. In the asset categories, without limitation, of Private Placements,
Derivatives, Options, Futures, CMOs, and Zero Coupon Bonds.
. Securities whose amount of income and redemption cannot be calculated
in advance of payable date, or determined in advance of actual
collection, examples include ADRs;
. Payments received as the result of a corporate action, not limited to,
bond calls, mandatory or optional puts, and tender offers.
*** For GNMA II securities, if the 19th day of the month is a business day,
Payable/Distribution Date is the next business day. If the 19th is not a
business day, but the 20th is a business day, Payable/Distribution date is
the first business day after the 20th. If both the 19th and 20th are not
business days, Payable/Distribution will be the next business day
thereafter.
24
EXHIBIT B--FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company ("SSB") is
authorized to promptly debit Client's account(s) upon the receipt of a payment
order in compliance with any of the Security Procedures chosen by the Client,
from those offered on the attached selection form (and any updated selection
forms hereafter executed by the Client), for funds transfers and in the amount
of money that SSB has been instructed to transfer. SSB is hereby instructed to
accept funds transfer instructions only via the delivery methods and Security
Procedures indicated on the attached selection form (and any updated executed by
the Client). The Client agrees that the Security Procedures are reasonable and
adequate for its wire transfer transactions and agrees to be bound by any
payment orders, amendments and cancellations, whether or not authorized, issued
in its name and accepted by SSB after being confirmed by any of the selected
Security Procedures. The Client also agrees to be bound by any other valid and
authorized payment order accepted by SSB. SSB shall execute payment orders in
compliance with the selected Security Procedures and with the
Client's/Investment Manager's instructions on the execution date provided that
such payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. SSB will use
reasonable efforts to execute on the execution date payment orders received
after the customary deadline, but if it is unable to execute any such payment
order on the execution date, such payment order will be deemed to have been
received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB will also rely on any financial
institution identification numbers included in any payment order, regardless of
any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's sole judgment, to
exceed any applicable volume, aggregate dollar, network, time, credit or similar
limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB reasonable efforts.
6. ERRORS: SSB shall assume no responsibility for failure to detect any
erroneous payment order provided that SSB complies with the payment order
instructions as received and SSB complies with the selected Security Procedures.
The Security Procedures are established for the purpose of authenticating
payment orders only and not for the detection of errors in payment orders.
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
the Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the Mid-America Payment Exchange or other similar body, SSB or its agent
will act as an Originating Depository Financial Institution and/or Receiving
Depository Financial Institution, as the case may be, with respect to such
entries. Credits given with respect to an ACH credit entry are provisional until
final settlement for such entry is received from the Federal Reserve Bank. If
such final settlement is not received, the Client agrees to promptly refund the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute
payment orders, and any payment order carried in whole or in part through
Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
25
SECURITY PROCEDURES SELECTION FORM
Please select at least two of the funds transfer security procedures indicated
below.
[] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions
that provides telecommunication services for its membership. Participation
is limited to securities brokers and dealers, clearing and depository
institutions, recognized exchanges for securities, and investment
management institutions. SWIFT provides a number of security features
through encryption and authentication to protect against unauthorized
access, loss or wrong delivery of messages, transmission errors, loss of
confidentiality and fraudulent changes to messages.
Selection of this security procedure would be most appropriate for
existing SWIFT members.
[] REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and SSB
and/or its agent. Security procedures include encryption and/or the use of
a test key by those individuals authorized as Automated Batch Verifiers or
a callback procedure to those individuals.
Clients selecting this option should have an existing facility for
completing CPU-CPU transmissions. This delivery mechanism is typically
used for high-volume business such as shareholder redemptions and dividend
payments.
[] AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the
initiation of payment (credit) or collection (debit) transactions through
the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. The transmission is sent from the
Client's or its agent's system to SSB's or its agent's system with
encryption.
[] REPETITIVE WIRES
For situations where funds are transferred periodically from an existing
authorized account to the same payee (destination bank and account number)
and only the date and currency amount are variable, a repetitive wire may
be implemented. Repetitive wires will be subject to a $10 million limit.
If the payment order exceeds the $10 million limit, the instruction will
be confirmed by Telephone Confirmation (Call Back) or Test Key prior to
execution. Repetitive wire instructions must be reconfirmed annually.
Clients may establish Repetitive Wires by following the agreed upon
security procedures as described by Telephone Confirmation (Call Back) or
Test Key.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts. If this option is selected, choose either
Telephone Confirmation or Test Key to be used as a secondary procedure
when over $10 million.
[] STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the
dollar amount are variable. Clients may establish Standby Instructions by
following the agreed upon security procedures as described by Telephone
Confirmation (Call Back) or Test Key.
This option is used for transactions that include but are not limited to
Foreign Exchange Contracts, Time Deposits and Tri-Party Repurchase
Agreements. If this option is selected, choose either Telephone
Confirmation or Test Key to be used as a secondary procedure when over $10
million.
[] TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will contact someone other than the originator at the
Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have
the capability to use other security procedures. Please complete the
Telephone Confirmation Instructions attached as a Schedule hereto.
[] TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide
test keys if this option is chosen. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will authenticate the test key provided with the
corresponding test key at SSB.
Selection of this alternative is appropriate for Clients who do not have
the capability to use other security procedures.
The individual signing below must be authorized to sign contract on behalf of
the client. The execution of payment orders under the selected Security
Procedures is governed by the Funds Transfer Operating Guidelines, which are
incorporated by reference.
CLIENT
By:
-------------------------------------------------
Authorized Signature
_____________________________________________________
Type or Print Name
_____________________________________________________
Title
_____________________________________________________
Date
26
SCHEDULE TO FUNDS TRANSFER OPERATING GUIDELINES
AND SECURITY PROCEDURES SELECTION FORM
CLIENT/INVESTMENT MANAGER:
-------------------------------------------------
Company Name
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
_____________________________________________ ______________________________________________
Name Name
_____________________________________________ ______________________________________________
Address Address
_____________________________________________ ______________________________________________
City/State/Zip Code City/State/Zip Code
_____________________________________________ ______________________________________________
Telephone Number Telephone Number
_____________________________________________ ______________________________________________
Facsimile Number Facsimile Number
_____________________________________________
SWIFT Number
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
_______________________________ _______________________________ _______________________________
00
XXXXXXX X
XXXXX XXXXXX XXXXXX XXXXXXX NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain The British Bank of the Middle East (as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada State Street Trust Company Canada --
Chile Citibank, N.A. --
People's The Hongkong and Shanghai Banking Corporation --
Republic of Limited, Shanghai and Shenzhen branches
China
Colombia Cititrust Colombia S.A.Sociedad Fiduciaria --
Costa Rica Banco BCT S.A. --
Croatia Privredana Banka Zagreb d.d --
Cyprus Cypress Popular Bank Ltd. --
Czech Ceskoslovenska Obchodni Banka, A.S. --
Republic
Denmark Den Danske Bank --
28
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Xxxxxx Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
India Deutsche Bank AG;The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en Cote d'Ivoire --
Jamaica Scotiabank Jamaica Trust and Merchant Bank, Ltd. --
Japan The Daiwa Bank, Limited; The Fuji Bank Limited Japan Securities Depository
Jordan British Bank of the Middle East (as delegate of The --
Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
00
XXXXXXX X
XXXXX XXXXXX GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Republic of The Hongkong and Shanghai Banking --
Korea Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking --
Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse --
Oman The British Bank of the Middle East (as delegate of The --
Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
30
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Russia Credit Suisse First Boston, AO, Moscow --
(as delegate of Credit Suisse First Boston, Zurich)
Singapore The Development Bank of Singapore Ltd. --
Slovak Ceskoslovenska Obchodna Banka A.S. --
Republic
Slovenia Banka Austria d.d. --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited --
Swaziland Barclays Bank of Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AS --
Taiwan - Central Trust of China --
R.O.C.
Thailand Standard Chartered Bank --
Trinidad Republic Bank Ltd. --
& Tobago
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A.; Ottoman Bank --
Ukraine ING Bank, Ukraine --
United State Street Bank and Trust Company, --
Kingdom London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
00
XXXXXXX X
XXXXX XXXXXX GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
32
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
Country Mandatory Depositories (Includes entities for which use is
mandatory as a matter of law or effectively mandatory as a
matter of market practice)
Argentina -Caja de Valores S.A.
Australia -Austraclear Limited;
-Reserve Bank Information and Transfer System
Austria -Oesterreichische Kontrollbank AG (Wertpapiersammelbank
Division)
Belgium -Caisse Interprofessionnelle de Depot et de Virement de
Titres S.A.;
-Banque Nationale de Belgique
Brazil -Companhia Brasileira de Liquidacao e
-Custodia (CBLC)
-Bolsa de Valores de Rio de Janeiro
- All SSB clients presently use CBLC
-Central de Custodia e de Liquidacao Financeira de Titulos
Bulgaria -Central Depository AD
-Bulgarian National Bank
Canada -The Canadian Depository for Securities Limited
People's Republic -Shanghai Securities Central Clearing and Registration
of China Corporation;
Costa Rica -Central de Valores S.A. (CEVAL)
Croatia Ministry of Finance; - National Bank of Croatia
Czech Republic --Stredisko cennych papiru;
-Czech National Bank
Denmark -Vaerdipapircentralen (The Danish Securities Center)
Egypt -Misr Company for Clearing, Settlement, and Central
Depository
Estonia -Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities Depository
France -Societe Interprofessionnelle pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany -The Deutscher Borse Clearing AG
33
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
Country Mandatory Depositories (Includes entities for which use is
mandatory as a matter of law or effectively mandatory as a
matter of market practice)
Greece -The Central Securities Depository (Apothetirion Titlon AE)
Hong Kong -The Central Clearing and Settlement System;
-Central Money Markets Unit
Hungary -The Central Depository and Clearing House (Budapest)
Ltd.(KELER) [Mandatory for Gov't Bonds only; SSB does not
use for other securities]
India -The National Securities Depository Limited
Indonesia -Bank Indonesia
Ireland -The Central Bank of Ireland, Securities Settlement Office
Israel -The Tel Aviv Stock Exchange Clearing House Ltd.;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Jamaica -The Jamaican Central Securities Depository
Japan -Bank of Japan Net System
Kenya -Central Bank of Kenya
Republic of Korea -Korea Securities Depository Corporation
Latvia -The Latvian Central Depository
Lebanon -The Custodian and Clearing Center of Financial Instruments
for Lebanon and the Middle East (MIDCLEAR) X.X.X.; - The
Central Bank of Lebanon
Lithuania -The Central Securities Depository of Lithuania
Malaysia -The Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities Trading and
Safekeeping Systems
Mauritius -The Central Depository & Settlement Co. Ltd.
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el Deposito de
Valores);
Morocco -Maroclear
34
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
Country Mandatory Depositories (Includes entities for which use is
mandatory as a matter of law or effectively mandatory as a
matter of market practice)
The Netherlands -Nederlands Centraal Instituut voor Giraal Effectenverkeer
B.V. (NECIGEF)
-Nederlandsche Bank N.V.
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen (the Norwegian Registry of Securities)
Oman -Muscat Securities Market
Pakistan -Central Depository Company of Pakistan Limited
Peru -Caja de Valores y Liquidaciones S.A. (CAVALI)
Philippines -The Philippines Central Depository Inc.
-The Registry of Scripless Securities (XXXX) of the Bureau
of the Treasury
Poland -The National Depository of Securities (Krajowy Depozyt
Papierow Wartos<180>ciowych);
-Central Treasury Bills Registrar
Portugal -Central de Valores Mobiliarios (Central)
Romania -National Securities Clearing, Settlement and Depository
Co.;
-Bucharest Stock Exchange Registry Division;
Singapore -The Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko Cennych Papierov;
-National Bank of Slovakia
Slovenia -Klirinsko Depotna Xxxxxx x.x.
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y Liquidacion de Valores, S.A.;
-Banco de Espana; Central de Anotaciones en Cuenta
Sri Lanka -Central Depository System (Pvt) Limited
Sweden -Vardepapperscentralen AB (the Swedish Central Securities
Depository)
Switzerland -Schweizerische Effekten - Giro AG;
00
XXXXXXX X
XXXXX XXXXXX GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
Country Mandatory Depositories (Includes entities for which use is
mandatory as a matter of law or effectively mandatory as a
matter of market practice)
Taiwan - R.O.C. -The Taiwan Securities Central Depository Company, Ltd.
Thailand -Thailand Securities Depository Company Limited
Tunisia -Societe Tunisienne Interprofessionelle de Compensation et
de Depot de Valeurs Mobilieres
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S. (TAKASBANK)
-Central Bank of Turkey
Ukraine -The National Bank of Ukraine
United Kingdom -The Bank of England, The Central Gilts Office; The Central
Moneymarkets Office
Uruguay -Central Bank of Uruguay
Venezuela -Central Bank of Venezuela
Zambia -Lusaka Central Depository Limited
-Bank of Zambia
36
