Exhibit h.22
FORM OF
CUSTODIAN MONITORING AGREEMENT
FORM OF
CUSTODIAN MONITORING AGREEMENT
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THIS AGREEMENT made as of the __ day __________2000 by and among AETNA
SERIES FUND, INC. (the "Fund"), MBIA INSURANCE CORPORATION ("MBIA") and
XXXXXXX/MELLON ANALYTICAL SERVICES, LLC ("Xxxxxxx/Mellon").
WHEREAS, the Fund intends to establish a separate series of the
Fund, Aetna Principal Protection Fund III (the "Series"), with an obligation by
the Fund, on behalf of the Series, to repay the amount initially invested by
each shareholder in the Series on a date certain ("Repayment Obligation"); and
WHEREAS, the Fund, on behalf of the Series, has entered into a
Financial Guaranty Agreement with MBIA (the "Financial Guaranty Agreement")
whereby MBIA will issue a policy to support the Repayment Obligation (the
"Policy"); and
WHEREAS, in connection therewith, the Fund intends to open custody
accounts with Mellon Bank, N.A. (in its capacity as custodian, "Mellon") under
the terms of the Custodian Agreement (the "Custodian Agreement") between the
Fund and Mellon dated as of September 1, 1992, as amended, on behalf of the
Series, to hold the Series' portfolio investments; and
WHEREAS, under the terms of the Financial Guaranty Agreement, in
consideration of MBIA's issuing the Policy, the Fund, on behalf of the Series,
has agreed to a particular investment strategy and to provide an arrangement
whereby trades executed on behalf of the Series will be monitored for conformity
with certain guidelines; and
WHEREAS, the Fund and MBIA wish for Xxxxxxx/Mellon to provide
investment monitoring services in respect of the Series, and Xxxxxxx/Mellon is
willing to perform such services upon the following terms and conditions.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration the parties hereto agree to the following:
1. Construction.
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Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular the plural and the
part the whole and "or" has the inclusive meaning sometimes represented by the
phrase "and/or". The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation thereof in any respect.
Section, subsection, schedule, exhibit and attachment references are to this
Agreement unless otherwise specified.
2. Monitoring Services.
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The Fund will open with Mellon one or more custody accounts, each
designated "Series" (each such designated custody account hereinafter referred
to as a "Series Account"). Each Series Account will contain the appropriate
designation in its title and will be operated subject to the terms of the
Custodian Agreement. Xxxxxxx/Mellon will monitor the assets delivered to each
Series Account for conformity with the guidelines set forth in Schedule A
attached hereto entitled Conforming Assets Guidelines (the "Guidelines"). For
purposes of this
Agreement, Xxxxxxx/Mellon will only be responsible for performing conforming
assets tests on assets that are traded through the Series Accounts and shall not
be responsible for monitoring the continuing compliance with the Guidelines of
assets held in the Series Accounts. In order to carry out the conforming assets
tests, Xxxxxxx/Mellon will rely on the trade information that Mellon receives
from the Fund on behalf of the Series and from broker confirmations tendered by
brokers to Mellon through The Depository Trust Company's Institutional Delivery
Confirmation System ("DTC ID"). Such trade information must be complete,
properly formatted and provided to Mellon in a timely manner. Xxxxxxx/Mellon
shall perform the conforming asset tests with respect to each asset added to the
Series Account promptly after receipt of the related trade information and in
any event within one business day of such receipt by Mellon. If by applying the
conforming assets tests to the Series Accounts an instance of noncompliance with
the Guidelines is noted, Xxxxxxx/Mellon will notify MBIA and the Fund promptly
of such noncompliance in writing via facsimile transmission. Once Xxxxxxx/Mellon
has notified the Fund and MBIA as to the existence of noncompliance,
Xxxxxxx/Mellon shall have no further obligation or duty to the Fund, the Series
or MBIA to monitor the trade, or to report its cure.
3. Delivery of Documents.
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The Fund and MBIA will promptly furnish to Xxxxxxx/Mellon such
copies, properly certified or authenticated, of documents and other related
information that Xxxxxxx/Mellon may reasonably request or require to properly
discharge its duties herein.
4. Fees and Expenses.
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(a) As compensation for the services rendered hereunder, the Fund,
on behalf of the Series, shall pay to Mellon, as billing and collection agent
for Xxxxxxx/Mellon, the monthly fees determined as set forth in Schedule A to
the Custodian Service Agreement of even date herewith among the Fund, MBIA and
Mellon. Such fees are to be billed monthly and shall be due and payable upon
receipt of the Mellon invoice. Upon any termination of the provision of services
under this Agreement before the end of any month, the fee for the part of the
month before such termination shall be prorated according to the proportion
which such part bears to the full monthly period and shall be payable upon the
date of such termination.
(b) The Fund, on behalf of the Series, may request additional
services, additional processing, or special reports, with such specifications
and requirements documentation as may be reasonably required by the Fund or by
Xxxxxxx/Mellon. If Xxxxxxx/Mellon elects to provide such services, it shall be
entitled to additional fees and expenses at its customary rates and charges.
(c) All fees, out-of-pocket expenses, or additional charges of
Xxxxxxx/Mellon shall be billed on a monthly basis by Mellon, as billing and
collection agent for Xxxxxxx/Mellon, and shall be due and payable by the Fund,
on behalf of the Series, upon receipt of the invoice.
5. Limitation of Liability and Indemnification.
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(a) In undertaking the performance of its obligations hereunder,
Xxxxxxx/Mellon shall not be liable for any loss, damage or expense suffered by
the Fund, the Series or MBIA in connection with the matters to which this
Agreement relates or the services provided hereunder except for general damages
solely caused by or resulting from willful misfeasance, bad faith or negligence
on the part of Xxxxxxx/Mellon, its members, directors, officers, employees or
agents, in the performance of its or their duties under this Agreement. "General
damages" means only those damages as directly and necessarily result from such
act or omission without reference to any special conditions or circumstances of
the Fund, the Series or MBIA. In no event shall Xxxxxxx/Mellon be liable for any
indirect, special or consequential losses or damages of any kind
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whatsoever (including but not limited to lost profits), even if Xxxxxxx/Mellon
has been advised of the likelihood of such losses or damages and regardless of
the form of action through which any such losses or damages may be claimed.
(b) Xxxxxxx/Mellon shall not be responsible for, and the Fund
shall indemnify and hold Xxxxxxx/Mellon, its members, directors, officers,
employees and agents (collectively "Xxxxxxx/Mellon Indemnified Parties")
harmless from and against any and all losses, damages, costs, reasonable
attorneys' fees and expenses, incurred by Xxxxxxx/Mellon Indemnified Parties, in
the performance of its/their duties hereunder, including but not limited to
those arising out of or attributable to:
(i) any and all actions of Xxxxxxx/Mellon Indemnified
Parties required to be taken pursuant to this Agreement;
(ii) the reliance on or use by Xxxxxxx/Mellon Indemnified
Parties of information, records, or documents which are received
by Xxxxxxx/Mellon Indemnified Parties and furnished to it or them
by or on behalf of the Fund, the Series or MBIA in accordance with
this Agreement, and which have been prepared or maintained by the
Fund, the Series or MBIA or any third party on behalf of either
the Fund, the Series or MBIA;
(iii) The Fund's or MBIA's refusal or failure to comply with
the terms of this Agreement or any agreement between the Series,
the Fund and MBIA relating to the matters herein, or the Fund's,
the Series' or MBIA's lack of good faith, or its actions, or lack
thereof, involving negligence or willful misfeasance;
(iv) any delays, inaccuracies, errors in or omissions from
information or data provided to Xxxxxxx/Mellon Indemnified Parties
by MBIA, the Series or the Fund or provided to Xxxxxxx/Mellon
Indemnified Parties by data or corporate action services or
vendors;
(v) the offer or sale of shares by the Fund, the Series or
MBIA in violation of any requirement under the Federal securities
laws or regulations or the securities laws or regulations of any
state, or in violation of any stop order or other determination or
ruling by any Federal agency or any state agency with respect to
the offer or sale of such shares in such state (1) resulting from
activities, actions, or omissions by the Fund, the Series or MBIA,
or (2) existing or arising out of activities, actions or omissions
by or on behalf of the Fund, the Series or MBIA prior to the
effective date of this Agreement; or
(vi) all actions, omissions, or errors caused by third parties to
whom Xxxxxxx/Mellon, any Xxxxxxx/Mellon Indemnified Parties, the
Fund, the Series or MBIA has assigned any rights and/or delegated
any duties under this Agreement at the request of or as required
by the Fund, the Series or MBIA;
provided that, in no event shall any Xxxxxxx/Mellon Indemnified Party be
indemnified for its negligence, bad faith or willful misfeasance in carrying out
its duties hereunder.
(c) Any liability of the Fund under this Agreement with respect to
the Series, or in connection with the transactions contemplated herein with
respect to the Series, shall be discharged only out of the assets of the Series,
and no other series of the Fund shall be liable with respect thereto.
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6. Term.
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This Agreement shall become effective immediately and shall
terminate on the earlier of the termination date under the Custodian Agreement
or May 31, 2005, unless earlier terminated by any party hereto on 90 days' prior
written notice to the other parties.
7. Representations.
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(a) The Fund, on behalf of the Series, represents and warrants
that the Fund has directed the Series' investment adviser to comply with the
Guidelines and purchase for such accounts only assets conforming to the
Guidelines.
(b) Each of the parties hereto represents and warrants that: (i)
it has the legal right, power and authority to execute, deliver and perform this
Agreement and to carry out all of the transactions contemplated hereby; (ii) it
has obtained all necessary authorizations; (iii) the execution, delivery and
performance of this Agreement and the carrying out of any of the transactions
contemplated hereby will not be in conflict with, result in a breach of or
constitute a default under any agreement or other instrument to which it is a
party or which is otherwise known to it; (iv) it does not require the consent or
approval of any governmental agency or instrumentality, except any such consents
and approvals which it has obtained; and (v) the execution and delivery of this
Agreement by it will not violate any law, regulation, charter, by-law, order of
any court or governmental agency or judgment applicable to it.
8. Notices.
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Any notice required or permitted hereunder shall be in writing and
shall be deemed effective on the date of personal delivery (by private
messenger, courier service or otherwise) or upon confirmed receipt of telex or
facsimile or other electronic system acceptable to Xxxxxxx/Mellon, whichever
occurs first, or upon receipt if by mail to the parties at the following address
(or such other address as a party may specify by notice to the others):
If to the Fund or the Series:
Aetna Series Fund, Inc./Series
00 Xxxxx Xxxxx Xxxxxx, XX00
Xxxxxxxx, XX 00000-0000
Attention: Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Attention: Xxxxxxxxx X. XxXxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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If to MBIA:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxxx/Mellon:
Xxxxxxx/Mellon Analytical Services
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
9. Waiver.
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The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed by
the waiving party.
10. Amendments.
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This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto. No provision of this Agreement
may be changed, discharged, or terminated orally, but only by an instrument in
writing signed by the parties.
11. Severability.
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If any provision of this Agreement is invalid or unenforceable,
the balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
12. Governing Law.
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This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to laws as to conflicts
of laws, and shall be binding on all the parties hereto and their respective
successors and assigns. The headings of the sections hereof are included for
convenience of reference only and do not form a part of this Agreement.
13. Benefit of the Parties.
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This Agreement is for the exclusive benefit of the parties hereto
and shall not be relied upon by or create any beneficial interest in any person
not a party hereto including any shareholders of the Fund.
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14. Counterparts.
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This Agreement may be executed by the parties in a number of
counterparts each of which shall be an original and together shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
AETNA SERIES FUND, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
MBIA INSURANCE CORPORATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
XXXXXXX/MELLON ANALYTICAL
SERVICES, LLC
By:________________________________________
Name:______________________________________
Title:_____________________________________
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SCHEDULE A
CONFORMING ASSETS GUIDELINES
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