AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of December 1, 2000
by and between SAFECO Resource Series Trust (the "Trust") and State Street
Bank and Trust Company (the "Custodian"). Capitalized terms used in this
Amendment without definition shall have the respective meanings given to such
terms in the Custodian Contract referred to below.
WHEREAS, the Trust and the Custodian entered into a Custodian Contract
dated as of March 31, 1997 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Trust is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and the Trust has made Growth Opportunities
Portfolio, Equity Portfolio, Northwest Portfolio, Small Company Value
Portfolio, Bond Portfolio and Money Market Portfolio subject to the Contract
(each such series, together with all other series subsequently established by
the Trust and made subject to the Contract in accordance with the terms
thereof, shall be referred to as a "Portfolio", and, collectively, the
"Portfolios"); and
WHEREAS, with respect to each Portfolio the Trust and the Custodian
desire to amend certain provisions of the Contract to reflect revisions to
Rule 17f-5 ("Rule 17f-5") and the adoption of Rule 17f-7 ("Rule 17f-7")
promulgated under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust and the Custodian desire to amend and restate
certain other provisions of the Contract relating to the custody of assets of
each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree to
amend the Contract, pursuant to the terms thereof, as follows:
I. With respect to each Portfolio, the amendment to the Contract dated April
30, 1998, and relating to the 1997 revision of Rule 17f-5 revision is
hereby deleted, and the parties hereto agree that it shall be and is
replaced in its entirety by the provisions set forth below.
3. PROVISIONS RELATING TO RULES 17f-5 AND 17f-7
3.1. DEFINITIONS. Capitalized terms in this Amendment shall have the
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 any Eligible Securities Depository operating in the country),
prevailing or developing custody and
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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, including a majority-owned or indirect subsidiary of a U.S. Bank
(as defined in Rule 17f-5), a bank holding company meeting the requirements
of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other
appropriate action of the U.S. Securities and Exchange Commission (the
"SEC")), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the
0000 Xxx) meeting the requirements of a custodian under Section 17(f) of the
1940 Act; the term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1)
of Rule 17f-7.
"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 as are reasonably necessary to effect the
Portfolios' transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The
Trust, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Section 3.2 with respect to Foreign Assets
of the Portfolios held outside the United States, and the Custodian hereby
accepts such delegation as Foreign Custody Manager with respect to the
Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Trust with the agreement of the Foreign Custody
Manager. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
assets of the Portfolios, which list of Eligible Foreign Custodians may be
amended from time to time in the sole discretion of the Foreign Custody
Manager. The Foreign Custody Manager will provide amended versions of
Schedule A in accordance with Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to
open an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Trust, on behalf of the Portfolios, of
the applicable account opening requirements for such country, the Foreign
Custody Manager shall be deemed to have been delegated by the Board on behalf
of the Portfolios responsibility as Foreign Custody Manager with respect to
that country and to have accepted such delegation. Execution of this
Amendment by the Trust shall be deemed to be a Proper Instruction to open an
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account, or to place or maintain Foreign Assets, in each country listed on
Schedule A in which the Custodian has previously placed or currently
maintains Foreign Assets pursuant to the terms of the Contract. Following the
receipt of Proper Instructions directing the Foreign Custody Manager to close
the account of a Portfolio with the Eligible Foreign Custodian selected by
the Foreign Custody Manager in a designated country, the delegation by the
Board on behalf of the Portfolios to the Custodian as Foreign Custody Manager
for that country shall be deemed to have been withdrawn and the Custodian
shall immediately cease to be the Foreign Custody Manager of the Portfolios
with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to
the Trust. Thirty days (or such longer period to which the parties agree in
writing) after receipt of any such notice by the Trust, the Custodian shall
have no further responsibility in its capacity as Foreign Custody Manager to
the Trust with respect to the country as to which the Custodian's acceptance
of delegation is withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Section 3.2, the Foreign Custody Manager may place and
maintain the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the Foreign Custody Manager in each country listed on Schedule A,
as amended from time to time. In performing its delegated responsibilities as
Foreign Custody Manager to place or maintain Foreign Assets with an Eligible
Foreign Custodian, the Foreign Custody Manager shall 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 the
factors specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign
Custody Manager shall determine that the contract governing the foreign
custody arrangements with each Eligible Foreign Custodian selected by the
Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
(C) MONITORING. In each case in which the Foreign Custody
Manager maintains Foreign Assets with an Eligible Foreign Custodian selected
by the Foreign Custody Manager, the Foreign Custody Manager shall establish a
system to monitor (i) the appropriateness of maintaining the Foreign Assets
with such Eligible Foreign Custodian and (ii) the contract governing the
custody arrangements established by the Foreign Custody Manager with the
Eligible Foreign Custodian. In the event the Foreign Custody Manager
determines that the custody arrangements with an Eligible Foreign Custodian
it has selected are no longer appropriate, the Foreign Custody Manager shall
notify the Board in accordance with Section 3.2.5 hereunder.
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3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which the Custodian is
serving as Foreign Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and
the placement of such Foreign Assets with another Eligible Foreign Custodian
by providing to the Board an amended Schedule A at the end of the calendar
quarter in which an amendment to such Schedule has occurred. The Foreign
Custody Manager shall make written reports notifying the Board of any other
material change in the foreign custody arrangements of the Portfolios
described in this Section 3.2 after the occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In
performing the responsibilities delegated to it, the Foreign Custody Manager
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.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign Custody
Manager represents to the Trust that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5. The Trust represents to the Custodian that the Board
has determined that it is reasonable for the Board to rely on the Custodian
to perform the responsibilities delegated pursuant to this Contract to the
Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and shall
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 (30) days after receipt by the non-terminating
party of such notice. The provisions of Section 3.2.2 hereof shall govern the
delegation to and termination of the Custodian as Foreign Custody Manager of
the Portfolios with respect to designated countries.
3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the
Trust (or its duly-authorized investment manager or investment adviser) with
an analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Trust (or its duly-authorized
investment manager or investment adviser) of any material change in such
risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7.
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3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.3.1.
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD
OUTSIDE THE UNITED STATES.
4.1 DEFINITIONS. Capitalized terms in this Article 4 shall have the
following meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES. The Custodian shall identify on its books as
belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any
Foreign Sub-Custodian in an account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to foreign securities of the Portfolios
which are maintained in such account shall identify those securities as
belonging to the Portfolios and (ii), to the extent permitted and customary
in the market in which the account is maintained, the Custodian shall require
that securities so held by the Foreign Sub-Custodian be held separately from
any assets of such Foreign Sub-Custodian or of other customers of such
Foreign Sub-Custodian.
4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a
Foreign Securities System in a designated country through arrangements
implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in
such country.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by the Custodian or such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the parties, and
only in the following cases:
(i) upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded, including,
without limitation: (A) delivery against expectation of receiving
later payment; or (B) in the case of a sale effected through a
Foreign Securities System, in accordance with the rules governing the
operation of the Foreign Securities System;
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(ii) in connection with any repurchase agreement related to
foreign securities;
(iii) to the depository agent in connection with tender or
other similar offers for foreign securities of the
Portfolios;
(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian or
of any nominee of the Custodian or such Foreign Sub-Custodian) or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units;
(vi) to brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with market custom; provided that in
any such case the Foreign Sub-Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except as
may arise from the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities;
(ix) for delivery as security in connection with any
borrowing by the Portfolios requiring a pledge of
assets by the Portfolios;
(x) in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;
(xi) in connection with the lending of foreign securities;
and
(xii) for any other purpose, but only upon receipt of Proper Instructions
specifying the foreign securities to be delivered and naming the
person or persons to whom delivery of such securities shall be made.
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4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies
of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by Proper Instructions, by (A) delivering money to
the seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery of
such foreign securities; or (B) in the case of a purchase effected
through a Foreign Securities System, in accordance with the rules
governing the operation of such Foreign Securities System;
(ii) in connection with the conversion, exchange or
surrender of foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest, taxes,
investment advisory fees, transfer agency fees, fees under this
Contract, legal fees, accounting fees, and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Portfolio, including transactions executed with or
through the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;
(vi) for payment of part or all of the dividends received in
respect of securities sold short;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other purpose, but only upon receipt of Proper Instructions
specifying the amount of such payment and naming the person or
persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received
for the account of the Portfolios and delivery of Foreign Assets maintained
for the account of the Portfolios may be effected in accordance with the
customary established securities trading or processing practices and
procedures in the country or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
with the expectation of receiving later payment for such Foreign Assets from
such purchaser or dealer.
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The Custodian shall provide to the Board the information with respect to
custody and settlement practices in countries in which the Custodian employs
a Foreign Sub-Custodian described on Schedule C hereto at the time or times
set forth on such Schedule. The Custodian may revise Schedule C from time to
time, provided that no such revision shall result in the Board being provided
with substantively less information than had been previously provided
hereunder.
4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in
the custody of a Foreign Sub-Custodian (other than bearer securities) shall
be registered in the name of the applicable Portfolio or in the name of the
Custodian or in the name of any Foreign Sub-Custodian or in the name of any
nominee of the foregoing, and the Trust on behalf of such Portfolio agrees to
hold any such nominee harmless from any liability as a holder of record of
such foreign securities. The Custodian or a Foreign Sub-Custodian shall not
be obligated to accept securities on behalf of a Portfolio under the terms of
this Contract unless the form of such securities and the manner in which they
are delivered are in accordance with reasonable market practice.
4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging to
the Trust cash (including cash denominated in foreign currencies) deposited
with the Custodian. Where the Custodian is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts shall be opened and maintained
outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian. All accounts referred to in this Section shall be subject only
to draft or order by the Custodian (or, if applicable, such Foreign
Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash
received by or from or for the account of the Portfolio. Cash maintained on
the books of the Custodian (including its branches, subsidiaries and
affiliates), regardless of currency denomination, is maintained in bank
accounts established under, and subject to the laws of, The Commonwealth of
Massachusetts.
4.7. COLLECTION OF INCOME. The Custodian shall use reasonable commercial
efforts to collect all income and other payments with respect to the Foreign
Assets held hereunder to which the Portfolios shall be entitled and shall
credit such income, as collected, to the applicable Portfolio. In the event
that extraordinary measures are required to collect such income, the Trust
and the Custodian shall consult as to such measures and as to the
compensation and expenses of the Custodian relating to such measures.
4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant
to this Article 4, the Custodian will use reasonable commercial efforts to
facilitate the exercise of voting and other shareholder rights, subject
always to the laws, regulations and practical constraints that may exist in
the country where such securities are issued. The Trust acknowledges that
local conditions, including lack of regulation, onerous procedural
obligations, lack of notice and other factors may have the effect of severely
limiting the ability of the Trust to exercise shareholder rights.
4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall
transmit promptly to the Trust written information with respect to materials
received by the
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Custodian via the Foreign Sub-Custodians from issuers of the foreign
securities being held for the account of the Portfolios (including, without
limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Trust written
information with respect to materials so received by the Custodian from
issuers of the foreign securities whose tender or exchange is sought or from
the party (or its agents) making the tender or exchange offer. The Custodian
shall not be liable for any untimely exercise of any tender, exchange or
other right or power in connection with foreign securities or other property
of the Portfolios at any time held by it unless (i) the Custodian or the
respective Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) the Custodian receives Proper Instructions
with regard to the exercise of any such right or power, and both (i) and (ii)
occur at least three business days prior to the date on which the Custodian
is to take action to exercise such right or power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a Foreign Sub-Custodian shall, to the extent possible,
require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising
out of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Trust's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against
a Foreign Sub-Custodian as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Portfolios have not
been made whole for any such loss, damage, cost, expense, liability or claim.
4.11 TAX LAW. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Trust, the Portfolios or the
Custodian as custodian of the Portfolios by the tax law of the United States
or of any state or political subdivision thereof. It shall be the
responsibility of the Trust to notify the Custodian of the obligations
imposed on the Trust with respect to the Portfolios or the Custodian as
custodian of the Portfolios by the tax law of countries other than those
mentioned in the above sentence, including responsibility for withholding and
other taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with regard
to such tax law shall be to use reasonable efforts to assist the Trust with
respect to any claim for exemption or refund under the tax law of countries
for which the Trust has provided such information.
4.12. LIABILITY OF CUSTODIAN. Except as may arise from the Custodian's own
negligence or willful misconduct or the negligence or willful misconduct of a
Sub-Custodian, the Custodian shall be without liability to the Trust for any
loss, liability, claim or expense resulting from or caused by anything which
is part of Country Risk.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian to the same extent as set forth with respect to sub-custodians
generally in the Contract and, regardless of whether assets are maintained in
the custody of a Foreign Sub-Custodian or a Foreign Securities System, the
Custodian shall not be liable for any loss, damage, cost,
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expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism, or any other loss where
the Sub-Custodian has otherwise acted with reasonable care.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail. If the Custodian is delegated the responsibilities of
Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the
event of any conflict between the provisions of Articles 3 and 4 hereof,
the provisions of Article 3 shall prevail.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of
the date first above written.
WITNESSED BY: STATE STREET BANK and TRUST COMPANY
/S/ XXXXXX X. XXXXXX
--------------------
Xxxxxx X. Xxxxxx By: /S/ XXXXXX X. XXXXX
VP & Counsel --------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice Chairman and Chief Operating Officer
WITNESSED BY: SAFECO RESOURCE SERIES TRUST
/S/ XXXXXXX XXXXXXX
-------------------
Xxxxxxx Xxxxxxx By: /S/XXXXX X. XXXX
VP & Counsel -------------------------------
Name: Xxxxx X. Xxxx
Title: President
