EXHIBIT 99(g)(3)
SUB-CUSTODIAN CONTRACT
Among
ST. CLAIR FUNDS, INC.,
COMERICA BANK
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. Employment of Sub-Custodian and Property to be Held By
It.....................................................................1
2. Duties of the Sub-Custodian with Respect to Property
of the Fund Held by the Sub-Custodian in the United States.............2
2.1 Holding Securities...............................................2
2.2 Delivery of Securities...........................................2
2.3 Registration of Securities.......................................4
2.4 Bank Accounts....................................................4
2.5 Availability of Federal Funds....................................5
2.6 Collection of Income.............................................5
2.7 Payment of Fund Monies...........................................5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased.............................................6
2.9 Appointment of Agents............................................7
2.10 Deposit of Fund Assets in U.S. Securities System.................7
2.11 Fund Assets Held in the Sub-Custodian's Direct
Paper System.....................................................9
2.12 Segregated Account...............................................9
2.13 Ownership Certificates for Tax Purposes..........................9
2.14 Proxies.........................................................10
2.15 Communications Relating to Portfolio
Securities......................................................10
3. Duties of the Sub-Custodian with Respect to Property of
the Fund Held Outside of the United States............................10
3.1 Appointment of Foreign Sub-Sub-Custodians.......................10
3.2 Assets to be Held...............................................10
3.3 Foreign Securities Systems......................................10
3.4 Holding Securities..............................................11
3.5 Agreements with Foreign Banking Institutions....................11
3.6 Access of Independent Accountants of the Fund...................11
3.7 Reports by Sub-Sub-Custodian....................................11
3.8 Transactions in Foreign Custody Account.........................11
3.9 Liability of Foreign Sub-Sub-Custodians.........................12
3.10 Liability of Sub-Custodian......................................12
3.11 Reimbursement for Advances......................................12
3.12 Monitoring Responsibilities.....................................13
3.13 Branches of U.S. Banks..........................................13
3.14 Tax Law.........................................................13
4. Payments for Sales or Repurchases or Redemptions
of Shares of the Fund.................................................13
5. Proper Instructions...................................................14
6. Actions Permitted Without Express Authority...........................14
7. Evidence of Authority.................................................15
8. Duties of Sub-Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income.....................15
9. Records...............................................................15
10. Opinion of Fund's Independent Accountants.............................15
11. Reports to Fund by Independent Public Accountants.....................16
12. Compensation of Sub-Custodian.........................................16
13. Responsibility of Sub-Custodian.......................................16
14. Effective Period, Termination and Amendment...........................18
15. Successor Sub-Custodian...............................................18
16. Interpretive and Additional Provisions................................19
17. Additional Funds......................................................19
18. Massachusetts Law to Apply............................................19
19. Prior Contracts.......................................................20
20. Reproduction of Documents.............................................20
21. Shareholder Communications Election...................................20
22. Use of Fund's Name....................................................20
SUB-CUSTODIAN CONTRACT
This Contract among St. Clair Funds, Inc., a corporation organized and
existing under the laws of Maryland, having its principal place of business at
000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, hereinafter called the "Fund",
Comerica Bank, a Michigan banking corporation having a principal place of
business at 000 Xxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxx 00000, hereinafter called the
"Custodian" and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, hereinafter called the "Sub-Custodian",
WITNESSETH:
WHEREAS, the Fund has appointed the Custodian as custodian of its
assets;
WHEREAS, the Custodian and the Fund desire to appoint the Sub-Custodian
to act as sub-custodian of the assets of the Fund;
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund currently offers shares in eleven series, Munder S&P 500
Index Equity Fund, Munder S&P MidCap Index Equity Fund, Munder S&P SmallCap
Index Equity Fund, Munder Aggregate Bond Index Fund, Munder Foreign Equity Fund,
Liquidity Plus Money Market Fund, Munder Institutional S&P 500 Index Equity
Fund, Munder Institutional S&P MidCap Index Equity Fund, Munder Institutional
S&P SmallCap Index Equity Fund, Munder Institutional Short Term Treasury Fund
and Munder Institutional Money Market Fund (such series together with all other
series subsequently established by the Fund and made subject to this Contract in
accordance with paragraph 17, being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF SUB-CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Custodian and the Fund hereby employ the Sub-Custodian as the
Sub-Custodian of the assets of the Portfolios of the Fund, including securities
which the Fund, on behalf of the applicable Portfolio desires to be held in
places within the United States ("domestic securities") and securities it
desires to be held outside the United States ("foreign securities") pursuant to
the provisions of the Articles of Incorporation. The Fund on behalf of the
Portfolio(s) agrees to deliver to the Sub-Custodian all securities and cash of
the Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for
such new or treasury shares of capital stock of the Fund representing interests
in the Portfolios, ("Shares") as may be issued or sold from time to time. The
Sub-Custodian shall not be responsible for any property of a Portfolio held or
received by the Portfolio and not delivered to the Sub-Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Sub-Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-sub-custodians, located in the United States but
only in accordance with an applicable vote by the Board of Directors of the Fund
on
behalf of the applicable Portfolio(s), and provided that the Sub-Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-sub-custodian so employed than any such
sub-sub-custodian has to the Sub-Custodian. The Sub-Custodian may employ as
sub-sub-custodian for the Fund's foreign securities on behalf of the applicable
Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedule A hereto but only in accordance with the
provisions of Article 3.
2. DUTIES OF THE SUB-CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
BY THE SUB-CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Sub-Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by it
in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury
(each, a U.S. Securities System") and (b) commercial paper of an issuer
for which State Street Bank and Trust Company acts as issuing and paying
agent ("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Sub-Custodian (the "Direct Paper System") pursuant to
Section 2.11.
2.2 DELIVERY OF SECURITIES. The Sub-Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Sub-Custodian or in a
U.S. Securities System account of the Sub-Custodian or in the
Sub-Custodian's Direct Paper book entry system account ("Direct Paper
System Account") only upon receipt of Proper Instructions from the Fund on
behalf of the applicable Portfolio, which may be continuing instructions
when deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Sub-Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of the
Sub-Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee name
of any sub-sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units; PROVIDED that, in any such case, the new securities are to be
delivered to the Sub-Custodian;
2
7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the 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 Sub-Custodian's own negligence or
willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Sub-Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Sub-Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, BUT ONLY against receipt of adequate collateral as agreed
upon from time to time by the Sub-Custodian and the Fund on behalf
of the Portfolio, which may be in the form of cash or obligations
issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Sub-Custodian's account in
the book-entry system authorized by the U.S. Department of the
Treasury, the Sub-Custodian will not be held liable or responsible
for the delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by the
Fund on behalf of the Portfolio, BUT ONLY against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Sub-Custodian and a
broker-dealer registered under the Securities Exchange Act of 1934
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Sub-Custodian, and a
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions
3
in kind, as may be described from time to time in the currently
effective prospectus and statement of additional information of the
Fund, related to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board
of Directors or of the Executive Committee signed by an officer of
the Fund and certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio to be delivered, setting
forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Sub-Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Sub-Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-sub-custodian
appointed pursuant to Article 1. All securities accepted by the
Sub-Custodian on behalf of the Portfolio under the terms of this Contract
shall be in "street name" or other good delivery form. If, however, the
Fund directs the Sub-Custodian to maintain securities in "street name",
the Sub-Custodian shall utilize its best efforts only to timely collect
income due the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Sub-Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Sub-Custodian acting
pursuant to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from
or for the account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Sub-Custodian for a Portfolio may be deposited by it to its credit as
Sub-Custodian in the Banking Department of the Sub-Custodian or in such
other banks or trust companies as it may in its discretion deem necessary
or desirable; PROVIDED, however, that every such bank or trust company
shall be qualified to act as a Sub-Custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of each
applicable Portfolio be approved by vote of a majority of the Board of
Directors of the Fund. Such funds shall be deposited by the Sub-Custodian
in its capacity as Sub-Custodian and shall be withdrawable by the
Sub-Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Sub-Custodian, the
Sub-Custodian shall, upon the receipt of Proper Instructions from the Fund
on behalf of a Portfolio, make federal funds available to such Portfolio
as of specified times agreed upon from time to time by the Fund and the
Sub-Custodian in the amount of checks received in payment for Shares of
such Portfolio which are deposited into the Portfolio's account.
4
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Sub-Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held hereunder to
which each Portfolio shall be entitled either by law or pursuant to custom
in the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the
Sub-Custodian or its agent thereof and shall credit such income, as
collected, to such Portfolio's Sub-Custodian account. Without limiting the
generality of the foregoing, the Sub-Custodian shall detach and present
for payment all coupons and other income items requiring presentation as
and when they become due and shall collect interest when due on securities
held hereunder. Income due each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Sub-Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data as
may be necessary to assist the Fund in arranging for the timely delivery
to the Sub-Custodian of the income to which the Portfolio is properly
entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Sub-Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts to the Sub-Custodian (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to
act as a Sub-Custodian and has been designated by the Sub-Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Sub-Custodian referred
to in Section 2.3 hereof or in proper form for transfer; (b) in the
case of a purchase effected through a U.S. Securities System, in
accordance with the conditions set forth in Section 2.10 hereof; (c)
in the case of a purchase involving the Direct Paper System, in
accordance with the conditions set forth in Section 2.11; (d) in the
case of repurchase agreements entered into between the Fund on
behalf of the Portfolio and the Sub-Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry crediting
the Sub-Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Sub-Custodian
along with written evidence of the agreement by the Sub-Custodian to
repurchase such securities from the Portfolio or (e) for transfer to
a time deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes,
5
management, accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio declared
pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions from the Fund on behalf of the Portfolio, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment is to
be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
a Portfolio is made by the Sub-Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from
the Fund on behalf of such Portfolio to so pay in advance, the
Sub-Custodian shall be absolutely liable to the Fund for such securities
to the same extent as if the securities had been received by the
Sub-Custodian.
2.9 APPOINTMENT OF AGENTS. The Sub-Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a Sub-Custodian, as its agent to carry out
such of the provisions of this Article 2 as the Sub-Custodian may from
time to time direct; PROVIDED, however, that the appointment of any agent
shall not relieve the Sub-Custodian of its responsibilities or liabilities
hereunder.
2.10 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Sub-Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Sub-Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account ("Account") of the Sub-Custodian in the U.S. Securities
System which shall not include any assets of the Sub-Custodian other
than assets held as a fiduciary, Custodian or otherwise for
customers;
2) The records of the Sub-Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
6
3) The Sub-Custodian shall pay for securities purchased for the account
of the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Sub-Custodian
to reflect such payment and transfer for the account of the
Portfolio. The Sub-Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Sub-Custodian to reflect such transfer and payment
for the account of the Portfolio. Copies of all advices from the
U.S. Securities System of transfers of securities for the account of
the Portfolio shall identify the Portfolio, be maintained for the
Portfolio by the Sub-Custodian and be provided to the Fund at its
request. Upon request, the Sub-Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each transfer to or from the
account of the Portfolio in the form of a written advice or notice
and shall furnish to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's transactions in the
U.S. Securities System for the account of the Portfolio;
4) The Sub-Custodian shall provide the Fund for the Portfolio with any
report obtained by the Sub-Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Sub-Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Sub-Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Sub-Custodian or any of its agents
or of any of its or their employees or from failure of the
Sub-Custodian or any such agent to enforce effectively such rights
as it may have against the U.S. Securities System; at the election
of the Fund, it shall be entitled to be subrogated to the rights of
the Sub-Custodian with respect to any claim against the U.S.
Securities System or any other person which the Sub-Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Portfolio has not been made whole for any such loss
or damage.
2.11 FUND ASSETS HELD IN THE SUB-CUSTODIAN'S DIRECT PAPER SYSTEM. The
Sub-Custodian may deposit and/or maintain securities owned by a Portfolio
in the Direct Paper System of the Sub-Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the Fund
on behalf of the Portfolio;
2) The Sub-Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Sub-Custodian in the Direct Paper System which
shall not include any assets of the Sub-Custodian other than assets
held as a fiduciary, Custodian or otherwise for customers;
3) The records of the Sub-Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
7
4) The Sub-Custodian shall pay for securities purchased for the account
of the Portfolio upon the making of an entry on the records of the
Sub-Custodian to reflect such payment and transfer of securities to
the account of the Portfolio. The Sub-Custodian shall transfer
securities sold for the account of the Portfolio upon the making of
an entry on the records of the Sub-Custodian to reflect such
transfer and receipt of payment for the account of the Portfolio;
5) The Sub-Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;
6) The Sub-Custodian shall provide the Fund on behalf of the Portfolio
with any report on its system of internal accounting control as the
Fund may reasonably request from time to time.
2.12 SEGREGATED ACCOUNT. The Sub-Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Sub-Custodian pursuant to Section 2.10 hereof, (i) in accordance with
the provisions of any agreement among the Fund on behalf of the Portfolio,
the Sub-Custodian and a broker-dealer registered under the Exchange Act
and a member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the rules
of The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the purposes of compliance
by the Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the Securities
and Exchange Commission relating to the maintenance of segregated accounts
by registered investment companies and (iv) for other proper corporate
purposes, BUT ONLY, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of Directors or
of the Executive Committee signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such purposes to be
proper corporate purposes.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Sub-Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.14 PROXIES. The Sub-Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Portfolio or a nominee of the Portfolio, all proxies, without
8
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the provisions
of Section 2.3, the Sub-Custodian shall transmit promptly to the Fund for
each Portfolio all written information (including, without limitation,
pendency of calls and maturities of domestic securities and expirations of
rights in connection therewith and notices of exercise of call and put
options written by the Fund on behalf of the Portfolio and the maturity of
futures contracts purchased or sold by the Portfolio) received by the
Sub-Custodian from issuers of the securities being held for the Portfolio.
With respect to tender or exchange offers, the Sub-Custodian shall
transmit promptly to the Portfolio all written information received by the
Sub-Custodian from issuers of the securities whose tender or exchange is
sought and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Portfolio
shall notify the Sub-Custodian at least three business days prior to the
date on which the Sub-Custodian is to take such action.
3. DUTIES OF THE SUB-CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Sub-Custodian to employ as sub-sub-custodians for the
Portfolio's securities and other assets maintained outside the United
States the foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign
sub-sub-custodians"). Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Directors, the Sub-Custodian and the Fund may agree to
amend Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as
sub-sub-custodian. Upon receipt of Proper Instructions, the Fund may
instruct the Sub-Custodian to cease the employment of any one or more such
sub-sub-custodians for maintaining custody of the Portfolio's assets.
3.2 ASSETS TO BE HELD. The Sub-Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-Sub-Custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Sub-Custodian or the Fund may determine to be
reasonably necessary to effect the Portfolio's foreign securities
transactions. The Sub-Custodian shall identify on its books as belonging
to the Fund, the foreign securities of the Fund held by each foreign
sub-sub-custodian.
3.3 FOREIGN SECURITIES SYSTEMS. Except as may otherwise be agreed upon in
writing by the Sub-Custodian and the Fund, assets of the Portfolios shall
be maintained in a clearing agency which acts as a securities depository
or in a book-entry system for the central handling of securities located
outside the United States (each a "Foreign Securities System") only
through arrangements implemented by the foreign banking institutions
serving as sub-sub-custodians pursuant to the terms hereof (Foreign
Securities Systems and U.S. Securities Systems are collectively referred
to herein as the "Securities Systems"). Where possible, such arrangements
shall include entry into agreements containing the provisions set forth in
Section 3.5 hereof.
3.4 HOLDING SECURITIES. The Sub-Custodian may hold securities and other
non-cash property for all of its customers, including the Fund, with a
foreign sub-sub-custodian in a single account that is identified as
belonging to the Sub-Custodian for the benefit of its customers, PROVIDED
HOWEVER,
9
that (i) the records of the Sub-Custodian with respect to securities and
other non-cash property of the Fund which are maintained in such account
shall identify by book-entry those securities and other non-cash property
belonging to the Fund and (ii) the Sub-Custodian shall require that
securities and other non-cash property so held by the foreign
sub-sub-custodian be held separately from any assets of the foreign
sub-sub-custodian or of others.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Sub-Custodian, including to the extent permitted
under applicable law the independent public accountants for the Fund, will
be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the
Sub-Custodian; and (e) assets of the Portfolios held by the foreign
sub-sub-custodian will be subject only to the instructions of the
Sub-Custodian or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the Fund,
the Sub-Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-Sub-Custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Sub-Custodian.
3.7 REPORTS BY SUB-CUSTODIAN. The Sub-Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other assets
and advices or notifications of any transfers of securities to or from
each custodial account maintained by a foreign banking institution for the
Sub-Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Except as otherwise provided
in paragraph (b) of this Section 3.8, the provision of Sections 2.2 and
2.7 of this Contract shall apply, MUTATIS MUTANDIS to the foreign
securities of the Fund held outside the United States by foreign
sub-sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the account
of each applicable Portfolio may be effected in accordance with the
customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-sub-custodian
may be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of such
securities.
10
3.9 LIABILITY OF FOREIGN SUB-SUB-CUSTODIANS. Each agreement pursuant to which
the Sub-Custodian employs a foreign banking institution as a foreign
sub-sub-custodian shall require the institution to exercise reasonable
care in the performance of its duties and to indemnify, and hold harmless,
the Sub-Custodian and the Fund from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Sub-Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.10 LIABILITY OF SUB-CUSTODIAN. The Sub-Custodian shall be liable for the acts
or omissions of a foreign banking institution to the same extent as set
forth with respect to sub-sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S.
bank as contemplated by paragraph 3.13 hereof, the Sub-Custodian shall not
be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.10, in delegating custody duties to State
Street London Ltd., the Sub-Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
other losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear incident or
other losses under circumstances where the Sub-Custodian and State Street
London Ltd. have exercised reasonable care.
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Sub-Custodian to
advance cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Sub-Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security
therefor to the extent thereof, and should the Fund fail to repay the
Sub-Custodian promptly, the Sub-Custodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets to the extent
necessary to obtain reimbursement.
3.12 MONITORING RESPONSIBILITIES. The Sub-Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-sub-custodians employed by the Sub-Custodian. Such information shall
be similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Sub-Custodian
will promptly inform the Fund in the event that the Sub-Custodian learns
of a material adverse change in the financial condition of a foreign
sub-sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-sub-custodian not the subject of an exemptive
order from the Securities and Exchange Commission is notified by such
foreign sub-sub-custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200 million
(U.S. dollars or the equivalent thereof) or that its shareholders' equity
has declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principles).
11
3.13 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2 (a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26 (a) of said Act. The appointment of any such branch as a
sub-sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund with
the Sub-Custodian's London branch, which account shall be subject to the
direction of the Sub-Custodian, State Street London Ltd. or both.
3.14 TAX LAW. The Sub-Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the Sub-Custodian
as Sub-Custodian of the Fund by the tax law of the United States of
America or any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Sub-Custodian of the obligations
imposed on the Fund or the Sub-Custodian as Sub-Custodian of the Fund by
the tax law of jurisdictions 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 Sub-Custodian with regard to
such tax law shall be to use reasonable efforts to assist the Fund with
respect to any claim for exemption or refund under the tax law of
jurisdictions for which the Fund has provided such information.
4. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
The Sub-Custodian shall receive from the distributor for the Shares or
from the transfer agent of the Fund and deposit into the account of the
appropriate Portfolio such payments as are received for Shares of that Portfolio
issued or sold from time to time by the Fund. The Sub-Custodian will provide
timely notification to the Fund on behalf of each such Portfolio and the
transfer agent of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Sub-Custodian shall, upon
receipt of instructions from the transfer agent, make funds available for
payment to holders of Shares who have delivered to the transfer agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Sub-Custodian is authorized upon
receipt of instructions from the transfer agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Sub-Custodian shall honor
checks drawn on the Sub-Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the
Sub-Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Fund and the Sub-Custodian.
5. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Sub-Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral instructions
to be
12
confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Sub-Custodian are satisfied that such procedures afford
adequate safeguards for the Portfolios' assets. For purposes of this Section,
Proper Instructions shall include instructions received by the Sub-Custodian
pursuant to any three - party agreement which requires a segregated asset
account in accordance with Section 2.12.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Sub-Custodian may in its discretion, without express authority from
the Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, PROVIDED that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board of Directors of the Fund.
7. EVIDENCE OF AUTHORITY
The Sub-Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Sub-Custodian may receive and accept a certified copy of a vote of the Board
of Directors of the Fund as conclusive evidence (a) of the authority of any
person to act in accordance with such vote or (b) of any determination or of any
action by the Board of Directors pursuant to the Articles of Incorporation as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Sub-Custodian of written notice to the contrary.
8. DUTIES OF SUB-CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Sub-Custodian shall keep the books of account of each Portfolio and
compute the net asset value per share of the outstanding shares of each
Portfolio. The Sub-Custodian shall also calculate daily the net income of the
Portfolio as described in the Fund's currently effective prospectus related to
such Portfolio and shall advise the Fund and the transfer agent daily of the
total amounts of such net income and shall advise the transfer agent
periodically of the division of such net income among its various components.
The calculations of the net asset value per share and the daily income of each
Portfolio shall be made at the time or times described from time to time in the
Fund's currently effective prospectus related to such Portfolio.
13
9. RECORDS
The Sub-Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the Investment
Company Act of 1940, with particular attention to Section 31 thereof and Rules
31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund
and shall at all times during the regular business hours of the Sub-Custodian be
open for inspection by duly authorized officers, employees or agents of the Fund
and employees and agents of the Securities and Exchange Commission. The
Sub-Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by the Sub-Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed upon
between the Fund and the Sub-Custodian, include certificate numbers in such
tabulations.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Sub-Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Sub-Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a Securities System, relating to the services provided by the Sub-Custodian
under this Contract; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
12. COMPENSATION OF SUB-CUSTODIAN
The Sub-Custodian shall be entitled to reasonable compensation for its
services and expenses as Sub-Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Sub-Custodian.
13. RESPONSIBILITY OF SUB-CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Sub-Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Sub-Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by the Fund and shall be without liability to the Fund
or to the Custodian for any action taken or omitted by it in good faith without
14
negligence, willful misconduct or reckless disregard of its duties and
obligations under this Contract. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
Except as may arise from the Sub-Custodian's own bad faith, negligence,
willful misconduct or reckless disregard of its duties and obligations hereunder
or the bad faith, negligence or willful misconduct or reckless disregard of the
duties and obligations of a sub-sub-custodian or agent, the Sub-Custodian shall
be without liability to the Fund or to the Custodian for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Sub-Custodian or any sub-sub-custodian or
Securities System or any agent or nominee of any of the foregoing, including,
without limitation, nationalization or expropriation, imposition of currency
controls or restrictions, the interruption, suspension or restriction of trading
on or the closure of any securities market, power or other mechanical or
technological failures or interruptions, computer viruses or communications
disruptions, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by the Fund or
the Investment Advisor in their instructions to the Sub-Custodian provided such
instructions have been in accordance with this Contract; (iii) the insolvency of
or acts or omissions by a Securities System; (iv) any delay or failure of any
broker, agent or intermediary, central bank or other commercially prevalent
payment or clearing system to deliver to the Sub-Custodian's sub-sub-custodian
or agent securities purchased or in the remittance or payment made in connection
with securities sold; (v) any delay or failure of any company, corporation, or
other body in charge of registering or transferring securities in the name of
the Sub-Custodian, the Fund, the Sub-Custodian's sub-sub-custodians, nominees or
agents or any consequential losses arising out of such delay or failure to
transfer such securities including non-receipt of bonus, dividends and rights
and other accretions or benefits; (vi) delays or inability to perform its duties
due to any disorder in market infrastructure with respect to any particular
security or Securities System; and (vii) any provision of any present or future
law or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.
The Sub-Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-sub-custodians generally in this Contract.
If the Fund on behalf of a Portfolio requires the Sub-Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Sub-Custodian, result in the
Sub-Custodian or its nominee assigned to the Fund or the Portfolio being liable
for the payment of money or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the Sub-Custodian to
take such action, shall provide indemnity to the Sub-Custodian in an amount and
form satisfactory to it.
If the Fund requires the Sub-Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Sub-Custodian or its nominee shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in connection
with the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor to the extent thereof, and should the Fund fail to repay
the Sub-Custodian promptly, the Sub-Custodian shall be entitled to utilize
available cash and to dispose of such Portfolio's assets to the extent necessary
to obtain reimbursement.
15
The Sub-Custodian shall have no responsibility or liability for any acts
or omissions of any prior custodian, subcustodian, accounting agent or other
service provider to the Fund and shall be indemnified by the Fund against any
claims arising out of or attributable to the acts or omissions of any prior
custodian, subcustodian, accounting agent or other service provider. Without in
any way limiting the foregoing, the Subcustodian shall have no liability in
respect of any loss, damage or expense suffered by the Fund insofar as such
loss, damage or expense arises from the performance of the Subcustodian's duties
hereunder in reliance upon records that were maintained for the Fund by entities
other than the Subcustodian prior to the Subcustodian's appointment as
subcustodian for the Fund.
In no event shall the Sub-Custodian be liable for indirect, special or
consequential damages.
14. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by the Fund, the Custodian or the Sub-Custodian by an instrument in
writing delivered or mailed, postage prepaid to the other parties, such
termination to take effect not sooner than thirty (30) days after the date of
such delivery or mailing; PROVIDED, however that the Sub-Custodian shall not
with respect to a Portfolio act under Section 2.10 hereof in the absence of
receipt of an initial certificate of the Secretary or an Assistant Secretary
that the Board of Directors of the Fund has approved the initial use of a
particular Securities System by such Portfolio, as required by Rule 17f-4 under
the Investment Company Act of 1940, as amended and that the Sub-Custodian shall
not with respect to a Portfolio act under Section 2.11 hereof in the absence of
receipt of an initial certificate of the Secretary or an Assistant Secretary
that the Board of Directors has approved the initial use of the Direct Paper
System by such Portfolio ; PROVIDED FURTHER, however, that the Fund shall not
amend or terminate this Contract in contravention of any applicable federal or
state regulations, or any provision of the Articles of Incorporation, and
further provided, that the Fund on behalf of one or more of the Portfolios may
at any time by action of its Board of Directors (i) substitute another bank or
trust company for the Sub-Custodian by giving notice as described above to the
Sub-Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Sub-Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Sub-Custodian such compensation as may be due as of
the date of such termination and shall likewise reimburse the Sub-Custodian for
its costs, expenses and disbursements.
15. SUCCESSOR SUB-CUSTODIAN
If a successor Sub-Custodian for the Fund, of one or more of the
Portfolios shall be appointed by the Board of Directors of the Fund, the
Sub-Custodian shall, upon termination, deliver to such successor Sub-Custodian
at the office of the Sub-Custodian, duly endorsed and in the form for transfer,
all securities of each applicable Portfolio then held by it hereunder and shall
transfer to an account of the successor Sub-Custodian all of the securities of
each such Portfolio held in a Securities System.
If no such successor Sub-Custodian shall be appointed, the Sub-Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Directors of the Fund, deliver at the office of the Sub-Custodian and
transfer such securities, funds and other properties in accordance with such
vote.
16
In the event that no written order designating a successor Sub-Custodian
or certified copy of a vote of the Board of Directors shall have been delivered
to the Sub-Custodian on or before the date when such termination shall become
effective, then the Sub-Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Sub-Custodian on behalf of each applicable Portfolio and
all instruments held by the Sub-Custodian relative thereto and all other
property held by it under this Contract on behalf of each applicable Portfolio
and to transfer to an account of such successor Sub-Custodian all of the
securities of each such Portfolio held in any Securities System. Thereafter,
such bank or trust company shall be the successor of the Sub-Custodian under
this Contract.
In the event that securities, funds and other properties remain in the
possession of the Sub-Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor Sub-Custodian, the Sub-Custodian
shall be entitled to fair compensation for its services during such period as
the Sub-Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Sub-Custodian shall remain in full force and effect.
16. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Sub-Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor of
this Contract. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, PROVIDED that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Articles of Incorporation
of the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
17. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to Munder S&P 500 Index Equity Fund, Munder S&P MidCap Index Equity
Fund, Munder S&P SmallCap Index Equity Fund, Munder Aggregate Bond Index Fund,
Munder Foreign Equity Fund, Liquidity Plus Money Market Fund, Munder
Institutional S&P 500 Index Equity Fund, Munder Institutional S&P MidCap Index
Equity Fund, Munder Institutional S&P SmallCap Index Equity Fund, Munder
Institutional Short Term Treasury Fund and Munder Institutional Money Market
Fund with respect to which it desires to have the Sub-Custodian render services
as Sub-Custodian under the terms hereof, it shall so notify the Sub-Custodian in
writing, and if the Sub-Custodian agrees in writing to provide such services,
such series of Shares shall become a Portfolio hereunder.
18. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
17
19. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the
Sub-Custodian relating to the custody of the Fund's assets.
20. REPRODUCTION OF DOCUMENTS
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
21. SHAREHOLDER COMMUNICATIONS ELECTION
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Sub-Custodian needs the Fund to indicate whether it authorizes the
Sub-Custodian to provide the Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If the Fund tells the
Sub-Custodian "no", the Sub-Custodian will not provide this information to
requesting companies. If the Fund tells the Sub-Custodian "yes" or does not
check either "yes" or "no" below, the Sub-Custodian is required by the rule to
treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Sub-Custodian is authorized to release the Fund's name,
address, and share positions.
NO [ ] The Sub-Custodian is not authorized to release the Fund's name,
address, and share positions.
22. USE OF FUND'S NAME
The Sub-Custodian shall not, without the written consent of the Custodian
and the Fund, identify the Fund, or any Portfolio, as a custodial client of the
Sub-Custodian in any promotional materials, proposals to or other communications
with clients or prospective clients.
18
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 5th day of August, 1997.
ATTEST ST. CLAIR FUNDS, INC.
/S/ XXXX XXXXXXXX- XXXXXXXX By: /S/ XXXX XXXX XXXXX
---------------------------- -------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/S/ XXXXXXX XXXX By: /S/ XXXXXXXX X. XXXXXXX
---------------------------- -------------------------------
ATTEST COMERICA BANK
/S/ XXXXXXX X. XXXXXXX By: /S/ XXXXX X. XXXXXXX
---------------------------- -------------------------------
19
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of St. Clair Funds,
Inc. for use as sub-sub-custodians for the Fund's securities and other assets:
(Insert banks and securities depositories)
Certified:
---------------------------
Fund's Authorized Officer
Date:
--------------------
20
