SUBCUSTODIAN AGREEMENT
between
STATE STREET BANK AND TRUST COMPANY
and
SECURITY PACIFIC NATIONAL COMPANY
SUBCUSTODIAN AGREEMENT
AGREEMENT dated as of December 19, 1988, between State Street Bank and
Trust Company organized under the laws of the Commonwealth of Massachusetts (the
"Custodian"), and Security Pacific National Bank (the "Subcustodian").
WITNESSETH:
WHEREAS, the Custodian has entered into a custodian agreement dated
November 20, 1987 with Prudential Institutional Liquidity Portfolio (the
"Fund"), an open-end management investment company, comprised of four separate
series, Institutional Domestic Liquid Assets Series, Institutional Government
Series, Institutional Money Market Series, Institutional Tax-Exempt Series
("Series") whose shares are registered pursuant to the Investment Company Act of
1940;
WHEREAS, the Custodian desires to utilize Subcustodian for the purpose
of holding cash and short term securities ("Securities") of the Fund;
WHEREAS, the Subcustodian is a bank within the meaning of Section
2(a)(5) of the Investment Company Act of 1940 having an aggregate capital
surplus and undivided profits of not less than two million ($2,00O,00O);
NOW THEREFORE, the Custodian and Subcustodian hereby agree as follows:
I. The Custodian may from time to time deposit Securities or cash with the
Subcustodian. The Subcustodian shall not be responsible for any property of the
Fund not delivered to the Subcustodian.
II. The Subcustodian shall hold and dispose of the Securities hereafter held by
or deposited with the Subcustodian as follows:
A. 1) The Subcustodian shall hold in a separate account, and physically
segregated at all times from those of any other persons, firms, corporations, or
other series, pursuant to the provisions hereof, all Securities received by it
for the account of the Custodian as custodian with respect to such Series. All
such Securities are to be held or disposed of by the Subcustodian for and
subject at all times to, the instructions of the Custodian pursuant to the terms
of this Agreement.
B. Upon receipt of instructions from the Custodian, the Subcustodian
shall release or deliver Securities owned by a Series only for the following
purposes:
(1) upon sale of Securities for the account of such Series against
receipt of payment therefor in Federal funds or;
(2) to the issuer thereof or its agent when Securities are called,
redeemed, retired or otherwise become payable, provided that payment as
aforesaid is to be delivered to the Subcustodian;
(3) for exchange for a different number of bonds or certificates
representing the same aggregate face amount or number of units, 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
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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
Subcustodian;
(4) in the case of warrants, rights or similar Securities the
surrender thereof in the exercise of such warrants, rights or similar
Securities; provided that the surrender of interim receipts or temporary
Securities for definitive Securities may be made at any time; provided that, in
any such case, the new Securities are to be delivered to the Subcustodian;
(5) in the case of tender offers or similar offers to purchase
received in writing, the delivery of Securities to the designated depository or
other receipt agent. The Subcustodian shall have full responsibility for
transmitting to the Custodian any such offers received by it. Thereafter, the
Custodian, if it desires to respond to such offer, shall have full
responsibility for providing the Subcustodian with all necessary instructions in
timely enough fashion for the Subcustodian to act thereon prior to any
expiration time for such offer;
(6) upon receipt from the Custodian of instructions directing
disposition of Securities in a manner other than or for purposes other than the
manners and purposes enumerated in the foregoing five items; provided, however,
the disposition pursuant to this item (6) shall be made by the Subcustodian only
upon receipt of instructions from the Custodian specifying the amount of such
Securities to be delivered, the purpose for which
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the delivery is to be made, and the name of the person or persons to whom such
delivery is to be made.
III. The Subcustodian shall hold and dispose of cash held by or deposited with
the Subcustodian as follows:
A. The Subcustodian shall open and maintain a separate account or
accounts for each Series in the name of the Custodian as custodian with respect
to such series, subject only to draft or order by the Subcustodian acting
pursuant to the terms of this Agreement. The Subcustodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
for the account of the Custodian as custodian for such Series.
B. Upon receipt of instructions from the Custodian, the Subcustodian
shall make payments of cash for the account of a Series from such cash only for
the following purposes:
(1) upon the purchase of Securities for the account of such Series
but only against the delivery of such Securities to the Subcustodian.
(2) in connection with the subscription, conversion, exchange,
tender or surrender of Securities owned by such Series as set forth in Paragraph
II.B hereof; and
(3) for deposit with the Custodian or with such other banking
institutions as may from time to time be approved by the Fund. All deposits will
be effected by the transfer of Federal Reserve funds to the Custodian or such
other banks.
IV. All instructions shall be in writing executed by the Custodian, and the
Subcustodian shall not be required to act on
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instructions otherwise communicated; provided, however, that the Subcustodian
may in its discretion act on the basis of instructions received from the
Custodian via telecommunications facilities. The Subcustodian may require that
instructions received via telecommunications facilities be authenticated. The
Subcustodian may receive and accept a certificate signed by the Assistant
Secretary of the Custodian as conclusive evidence of the authority of any person
to act on behalf of the Custodian, and such certificate may be considered as in
full force and effect until receipt by the Subcustodian or written notice the
contrary.
V. Unless and until the Subcustodian receives instructions from the Custodian to
the contrary, the Subcustodian shall:
A. Present for payment all coupons and other income items held by it for
the account of the Custodian as custodian for the Fund which call for payment
upon presentation and hold the cash received by it upon such payment for the
account of the Custodian as custodian for the Fund;
B. Collect interest and cash dividends received, with notice to the
Custodian, for the account of the Custodian as custodian for the Fund;
C. Hold for the account of the Custodian as custodian for the Fund
hereunder all stock dividends, rights and similar Securities issued with respect
to any Securities held by it hereunder.
VI. The Subcustodian shall execute on behalf of the Custodian, in the Fund's
name, any declarations, affidavits, or
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certificates of ownership which may be necessary or useful from time to time for
the Subcustodian to perform any or several of its obligations arising under the
provisions of this Agreement.
VII. If the Subcustodian shall receive any notices or reports in respect of
Securities held by it hereunder, it shall promptly upon receipt thereof transmit
to the Custodian by airmail, telecommunications facilities, or comparable means
any such notices or reports.
VIII. On each day on which there is a cash or Securities transaction for the
account of the Custodian as custodian for the Fund, the Subcustodian shall
dispatch to the Custodian separate cash and Securities advices (each designating
the affected Series). The Subcustodian shall furnish to the Custodian at the end
of every month a statement of the cash and Securities held by the Subcustodian
and any agent for the Custodian as custodian for the Fund. Such statements shall
be broken down by Series and shall be sent by airmail, telecommunications
facilities or comparable means to the Custodian within 15 days after the end of
each month. The Subcustodian shall furnish the Custodian with such additional
statements as the Custodian may reasonably request.
IX. As compensation for the services rendered pursuant to this Agreement, the
Custodian shall pay the Subcustodian a fee computed in accordance with the
schedule attached hereto as Exhibit A, as such schedule may be amended from time
to time by written agreement between the Custodian and Subcustodian.
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X. Upon request, the Custodian shall deliver, or shall request the Fund to
deliver, to the Subcustodian, such proxies, powers-of-attorney or other
instruments as may be necessary or desirable in connection with the performance
by the Subcustodian of its obligations under this Agreement.
XI. So long as and to the extent that it is in the exercise of reasonable care,
the Subcustodian 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 Agreement. The Subcustodian shall not be liable for any action
taken or omitted in good faith upon any notice, request, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties. The Subcustodian shall be obligated to exercise
reasonable care and diligence in carrying out the provisions of this Agreement
and shall indemnify and hold harmless the Custodian from any loss, claim,
expense (including counsel fees) or liability for its actions but shall be
without liability for any action taken or thing done by it in good faith and
without negligence. The Subcustodian shall be entitled to and may act upon
advice of counsel (who may be counsel for the Company) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to such
advice.
XII. This Agreement may be terminated at any time by the Custodian or the
Subcustodian by giving written notice to the other party at least thirty (30)
days prior to the date on which such termination is to become effective. In the
event of
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termination, the Subcustodian will deliver any Securities held by it or any
agent to the Custodian or to such successor subcustodian as the Custodian shall
instruct in a manner to be mutually agreed upon by the parties hereto or, in the
absence of such agreement, in a reasonable manner. Further in the event of
termination, the Subcustodian shall be entitled to receive prior to the delivery
of the Securities held by it or any agent all accrued fees and unreimbursed
expenses the payment of which is contemplated by Paragraph IX hereof upon
receipt by the Custodian of a final statement setting forth such fees and
expenses.
XIII. Except as the parties shall from time to time otherwise agree, all
instructions, notices, reports and other communications contemplated by this
Agreement shall be dispatched as follows:
If to the Custodian: State Street Bank and Trust Company
Mutual Funds Division
X.X. Xxx 0000
Xxxxxx, XX 00000
Attention:
Telex Number:
If to the Subcustodian: Security Pacific National Bank
000 X. Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx
XIV. This Agreement constitutes the entire understanding and agreement of the
parties hereto, and neither this Agreement nor any provisions hereof may be
changed, waived, discharged or terminated except by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
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XV. This Agreement shall be binding upon and shall inure to the benefit of the
Custodian and the Subcustodian and their successors and assignees provided that
neither the Custodian nor the Subcustodian may assign this Agreement or any of
the rights or obligations hereunder without the prior written consent of the
other party.
XVI. This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts.
XVII. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. This Agreement shall become effective when one or more counterparts
have been signed and delivered by each of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY
(the "Custodian)
/s/ [Illegible]
--------------------------------
Vice President
SECURITY PACIFIC NATIONAL BANK
(the "Subcustodian)
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
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