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Exhibit(g)(3)
AMENDED AND RESTATED DELEGATION AGREEMENT
AGREEMENT, dated as of ________ __, 2001 by and between INVESTORS BANK &
TRUST COMPANY, a Massachusetts trust company (the "Delegate"), and CitiStreet
Funds, Inc., a Maryland Corporation (the "Fund").
WHEREAS, Delegate currently acts as Delegate to the Fund pursuant to a
Delegation Agreement (the "Old Agreement") between the Delegate and the Fund
dated as of May 28, 1998; and
WHEREAS, in connection with the issuance of Rule 17f-7 and amendments to
Rule 17f-5, each under the Investment Company Act of 1940, as amended (the "1940
Act") Delegate and Fund desire to amend and restate the Old Agreement in
accordance with the terms hereof; and
WHEREAS, pursuant to the provisions of Rule 17f-5 under the 1940 Act, and
subject to the terms and conditions set forth herein, the Board of Directors of
the Fund desires to continue to delegate to the Delegate certain
responsibilities concerning Foreign Assets (as defined below), and the Delegate
hereby agrees to retain such delegation, but only in accordance with the terms
described herein; and
WHEREAS, pursuant to the provisions of Rule 17f-7 under the 1940 Act, and
subject to the terms and conditions set forth herein, the Board of Directors of
the Fund desires to retain the Delegate to provide certain services concerning
Foreign Assets, and the Delegate hereby agrees to provide such services, as
described herein;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. DEFINITIONS
Capitalized terms in this Agreement have the following meanings:
a. Authorized Representative
Authorized Representative means any one of the persons who are
empowered, on behalf of the parties to this Agreement, to receive notices from
the other party and to send notices to the other party.
b. Board
Board means the Board of Directors (or the body authorized to
exercise authority similar to that of the board of directors of a corporation)
of Fund.
c. Country Risk
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 financial infrastructure (including any Securities
Depositories operating in such country); prevailing
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custody and settlement practices; and laws applicable to the safekeeping and
recovery of Foreign Assets held in custody.
d. Eligible Foreign Custodian
Eligible Foreign Custodian has the meaning set forth in Rule
17f-5(a)(1) and it is understood that such term includes foreign branches of
U.S. Banks (as the term "U.S. Bank" is defined in Rule 17f-5(a)(7)) (or as such
term may be interpreted or modified by the SEC).
e. Foreign Assets
Foreign Assets has the meaning set forth in Rule 17f-5(a)(2) (or as
such term may be interpreted or modified by the SEC).
f. Foreign Custody Manager
Foreign Custody Manager has the meaning set forth in Rule
17f-5(a)(3) (or as such term may be interpreted or modified by the SEC).
g. Securities Depository
Securities Depository has the meaning set forth in Rule 17f-4(a) (or
as such term may be interpreted or modified by the SEC).
h. Monitor
Monitor means to re-assess or re-evaluate, at reasonable intervals
and on the basis of a reasonable investigation of the relevant circumstances, a
decision, determination or analysis previously made.
2. REPRESENTATIONS
a. Delegate's Representations
Delegate represents that it is a trust company chartered under the
laws of the Commonwealth of Massachusetts and is a "U.S. Bank" within the
meaning of Rule 17f-5(a)(7) (or as such term may be interpreted or modified by
the SEC). Delegate further represents that the persons executing this Agreement
and any amendment or appendix hereto on its behalf are duly authorized to so
bind the Delegate with respect to the subject matter of this Agreement.
b. Fund's Representations
Fund represents that the Board has determined that it is reasonable
to rely on Delegate to perform the responsibilities described in this Agreement.
Fund further represents that the persons executing this Agreement and any
amendment or appendix hereto on its behalf are duly authorized to so bind the
Fund with respect to the subject matter of this Agreement.
3. JURISDICTIONS AND DEPOSITORIES COVERED
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a. Initial Jurisdictions and Depositories
The authority delegated by this Agreement in connection with Rule
17f-5 applies only with respect to Foreign Assets held in the jurisdictions
listed in Appendix A1. Delegate's responsibilities under this Agreement in
connection with Rule 17f-7 apply only with respect to the Securities
Depositories listed in Appendix A2. Upon the creation of a new Securities
Depository in any of the jurisdictions listed in Appendix A1 at the time of such
creation, such Securities Depository will automatically be deemed to be listed
in Appendix A2 and will be covered by the terms of this Agreement.
b. Added Jurisdictions and Depositories
Jurisdictions and related Securities Depositories may be added to
Appendix A1 and Appendix A2, respectively, by written agreement in the form of
Appendix B. Delegate's responsibility and authority with respect to any
jurisdiction or Securities Depository, respectively, so added will commence at
the later of (i) the time that Delegate's Authorized Representative and Board's
Authorized Representative have both executed a copy of Appendix B listing such
jurisdiction and/or Securities Depository, or (ii) the time that Delegate's
Authorized Representative receives a copy of such fully executed Appendix B.
c. Withdrawn Jurisdictions
Board may withdraw its (i) delegation to Delegate with respect to
any jurisdiction or (ii) retention of Delegate with respect to any Securities
Depository, upon written notice to Delegate. Delegate may withdraw its (i)
acceptance of delegation with respect to any jurisdiction or (ii) retention with
respect to any Securities Depository, upon written notice to Board. Ninety (90)
days (or such longer period as to which the parties agree in such event) after
receipt of any such notice by the Authorized Representative of the party other
than the party giving notice, Delegate shall have no further responsibility or
authority under this Agreement with respect to the jurisdiction(s) or Securities
Depository as to which delegation is withdrawn.
4. DELEGATION OF AUTHORITY TO ACT AS FOREIGN CUSTODY MANAGER
a. Selection of Eligible Foreign Custodians
Subject to the provisions of this Agreement and the requirements of
Rule 17f-5 (and any other applicable law), Delegate is authorized and directed
to place and maintain Foreign Assets in the care of any Eligible Foreign
Custodian(s) selected by Delegate in each jurisdiction to which this Agreement
applies, except that Delegate does not accept such authorization and direction
with regard to Securities Depositories.
b. Contracts With Eligible Foreign Custodians
Subject to the provisions of this Agreement and the
requirements of Rule 17f-5 (and any other applicable law), Delegate is
authorized to enter into, on behalf of Fund, such written contracts governing
Fund's foreign custody arrangements with such Eligible Foreign Custodians as
Delegate deems appropriate.
5. MONITORING OF ELIGIBLE FOREIGN CUSTODIANS AND CONTRACTS
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In each case in which Delegate has exercised the authority delegated
under this Agreement to place Foreign Assets with an Eligible Foreign Custodian,
Delegate is authorized to, and shall, on behalf of Fund, establish a system to
Monitor the appropriateness of maintaining Foreign Assets with such Eligible
Foreign Custodian. In each case in which Delegate has exercised the authority
delegated under this Agreement to enter into a written contract governing Fund's
foreign custody arrangements, Delegate is authorized to, and shall, on behalf of
Fund, establish a system to Monitor the appropriateness of such contract.
6. SECURITIES DEPOSITORIES
a. In accordance with the requirements of Rule 00x-0, Xxxxxxxx
shall, by no later than June 2, 2001, provide the Fund and each of its
investment advisers (including subadvisers) with an analysis of the custody
risks associated with maintaining assets with each Securities Depository listed
on Appendix A2 hereto. That analysis will include information which will enable
the Fund and its advisers to determine whether each securities depository listed
on Appendix A2 is an eligible securities depository as defined in Rule
17f-7(b)(1). Delegate shall notify the Fund and its advisers (including
subadvisers) of any material change in any information provided by delegate
regarding whether a securities depository meets the definition of eligible
securities depository promptly after becoming aware of any such change.
b. In accordance with the requirements of Rule 17f-7, Delegate shall
Monitor the custody risks associated with maintaining assets with each
Securities Depository listed on Appendix A2 hereto on a continuing basis, and
shall promptly notify the Fund and each of its investment subadvisers of any
material change in such risks.
7. GUIDELINES AND PROCEDURES FOR THE EXERCISE OF DELEGATED AUTHORITY
a. Board's Conclusive Determination Regarding Country Risk
In exercising its delegated authority under this Agreement, Delegate
may assume, for all purposes, that Board (or Fund's investment adviser or
subadviser, pursuant to authority delegated by Board) has considered, and
pursuant to its fiduciary duties to Fund and Fund's shareholders, determined to
accept, such Country Risk as is incurred by placing and maintaining Foreign
Assets in the jurisdictions to which this Agreement applies. In exercising its
delegated authority under this Agreement, Delegate may also assume that Board
(or Fund's investment adviser or subadviser, pursuant to authority delegated by
Board) has, and will continue to, Monitor such Country Risk to the extent Board
deems necessary or appropriate.
Except as specifically described herein, nothing in this Agreement
shall require Delegate to make any selection or to engage in any Monitoring on
behalf of Fund that would entail consideration of Country Risk.
b. Selection of Eligible Foreign Custodians
In exercising the authority delegated under this Agreement to place
Foreign Assets with an Eligible Foreign Custodian, Delegate shall determine that
Foreign Assets will be subject to reasonable care, based on the standards
applicable to custodians in the market in which
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the Foreign Assets will be held, after considering all factors relevant to the
safekeeping of such Foreign Assets, including, without limitation:
i. The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if
applicable), the method of keeping custodial records, and the
security and data protection practices;
ii. Whether the Eligible Foreign Custodian has the financial strength
to provide reasonable care for Foreign Assets;
iii. The Eligible Foreign Custodian's general reputation and standing;
iv. Whether Fund will have jurisdiction over and be able to enforce
judgments against the Eligible Foreign Custodian, such as by
virtue of the existence of any offices of the Eligible Foreign
Custodian in the United States or the Eligible Foreign
Custodian's consent to service of process in the United States;
and
v. In the case of an Eligible Foreign Custodian that is a banking
institution or trust company, any additional factors and criteria
set forth in Appendix C to this Agreement.
c. Evaluation of Written Contracts
In exercising the authority delegated under this Agreement to enter
into written contracts governing Fund's foreign custody arrangements with an
Eligible Foreign Custodian, Delegate shall determine that such contracts provide
reasonable care for Foreign Assets based on the standards applicable to Eligible
Foreign Custodians in the relevant market. In making this determination,
Delegate shall ensure that the terms of such contracts comply with the
provisions of Rule 17f-5(c)(2).
d. Monitoring of Eligible Foreign Custodians
In exercising the authority delegated under this Agreement to establish
a system to Monitor the appropriateness of maintaining Foreign Assets with an
Eligible Foreign Custodian or the appropriateness of a written contract
governing Fund's foreign custody arrangements, Delegate shall consider any
factors and criteria set forth in subsections (b) and (c) hereof and Appendix D
to this Agreement. If, as a result of its Monitoring of Eligible Foreign
Custodian relationships hereunder or otherwise, the Delegate determines in its
sole discretion that it is in the best interest of the safekeeping of the
Foreign Assets to move such Foreign Assets to a different Eligible Foreign
Custodian, the Fund shall bear any expense related to such relocation of Foreign
Assets.
8. STANDARD OF CARE
a. In exercising the authority delegated under this Agreement with
regard to its duties under Rule 00x-0, Xxxxxxxx agrees to exercise reasonable
care, prudence and diligence
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such as a person having responsibility for the safekeeping of Foreign Assets of
an investment company registered under the 1940 Act would exercise.
b. In carrying out its responsibilities under this Agreement with
regard to Rule 00x-0, Xxxxxxxx agrees to exercise reasonable care, prudence and
diligence.
9. REPORTING REQUIREMENTS
Delegate agrees to provide written reports notifying Board of the
placement of Foreign Assets with a particular Eligible Foreign Custodian and of
any material change in Fund's arrangements with such Eligible Foreign
Custodians. Such reports shall be provided to Board quarterly for consideration
at the next regularly scheduled meeting of the Board or earlier if deemed
necessary or advisable by the Delegate in its sole discretion.
10. PROVISION OF INFORMATION REGARDING COUNTRY RISK
With respect to the jurisdictions listed in Appendix A1, or added
thereto pursuant to Article 3, Delegate agrees to provide the Board and the
Fund's investment advisers (including subadvisers) with access to Eyes to the
World(TM), a service available through the Delegate's Web Site at xxx.xxxxx.xxx,
containing information relating to Country Risk, if available, as is specified
in Appendix E to this Agreement. Such information relating to Country Risk shall
be updated from time to time as the Delegate deems necessary.
11. LIMITATION OF LIABILITY.
a. Notwithstanding anything in this Agreement to the contrary, in no
event shall the Delegate or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Delegate and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "Claim") arising as
a result of any act or omission of the Delegate or any Indemnified Party under
this Agreement, except for any Claim resulting solely from the negligence,
willful misfeasance or bad faith of the Delegate or any Indemnified Party.
Without limiting the foregoing, neither the Delegate nor the Indemnified Parties
shall be liable for, and the Delegate and the Indemnified Parties shall be
indemnified against, any Claim arising as a result of:
i. Any act or omission by the Delegate or any Indemnified Party
in reasonable good faith reliance upon the terms of this
Agreement, any resolution of the Board, telegram, telecopy,
notice, request, certificate or other instrument reasonably
believed by the Delegate to be genuine;
ii. Any acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots,
nationalization, expropriation, currency restrictions, acts of
war, civil war or terrorism, insurrection, nuclear fusion,
fission or radiation, the interruption, loss or malfunction of
utilities, transportation or computers (hardware or software)
and computer facilities, the unavailability of energy sources
and other similar happenings or events. Notwithstanding the
foregoing, the
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Delegate shall maintain appropriate backup and disaster
recovery facilities.
b. Notwithstanding anything to the contrary in this Agreement, in no
event shall the Delegate or the Indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any activities hereunder.
12. EFFECTIVENESS AND TERMINATION OF AGREEMENT
The term of this Agreement shall continue through April 30, 2003 (the
"Initial Term"), unless earlier terminated as provided herein. After the
expiration of the Initial Term, this Agreement may be terminated at any time
without penalty upon sixty days written notice delivered by either party to the
other by means of registered mail, and upon the expiration of such sixty days
this Agreement will terminate; provided, however, that the effective date of
such termination may be postponed to a date not more than ninety days from the
date of delivery of such notice (i) by Delegate in order to prepare for the
transfer by Delegate of all the assets of Fund, and (ii) by Fund in order to
give Fund an opportunity to make suitable arrangements for a successor delegate.
At any time after the termination of this Agreement, Fund will, at its request,
have access to the records of Delegate relating to the performance of its duties
as delegate. Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the violating party does not
cure such violation within ninety days of receipt of written notice from the
non-violating party of such violation.
13. AUTHORIZED REPRESENTATIVES AND NOTICES
The respective Authorized Representatives of Fund and Board, and the
addresses to which notices and other documents under this Agreement are to be
sent to each, are as set forth in Appendix F. Any Authorized Representative of a
party may add or delete persons from that party's list of Authorized
Representatives by written notice to an Authorized Representative of the other
party.
14. GOVERNING LAW
This Agreement shall be constructed in accordance with the laws of the
Commonwealth of Massachusetts without regard to principles of choice of law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
Investors Bank & Trust Company
By: ___________________________________
Name:
Title:
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CITISTREET FUNDS, INC.
By:____________________________________
Name:
Title:
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LIST OF APPENDICES
A1 -- Jurisdictions Covered
A2 -- Securities Depositories Covered
B -- Additional Jurisdictions/Securities Depositories Covered
C -- Additional Factors and Criteria To Be Applied in the Selection of
Eligible Foreign Custodians That Are Banking Institutions or Trust Companies
D -- Factors and Criteria To Be Applied in Establishing Systems For the
Monitoring of Foreign Custody Arrangements and Contracts
E -- Information Regarding Country Risk
F -- Authorized Representatives
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APPENDIX A1
JURISDICTIONS COVERED
[delete those countries which are not delegated]
Argentina Kenya
Austria Korea
Australia Latvia
Bahrain Lebanon
Bangladesh Lithuania
Belgium Luxembourg
Bermuda Malaysia
Bolivia Mauritius
Botswana Mexico
Brazil Morocco
Bulgaria Namibia
Canada Netherlands
Chile New Zealand
China Norway
Clearstream (Cedel) Oman
Colombia Pakistan
Costa Rica Panama
Croatia Papau New Guinea
Cyprus Peru
Czech Republic Philippines
Denmark Poland
Ecuador Portugal
Egypt Romania
Estonia Russia
Euroclear Singapore
Finland Slovak Republic
France Slovenia
Germany South Africa
Ghana Spain
Greece Sri Lanka
Hong Kong Swaziland
Hungary Sweden
Iceland Switzerland
India Taiwan
Indonesia Thailand
Ireland Turkey
Israel Ukraine
Italy United Kingdom
Ivory Coast Uruguay
Japan Venezuela
Jordan Zambia
Kazakhstan Zimbabwe
A1-1
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APPENDIX A2
SECURITIES DEPOSITORIES COVERED
Argentina CDV Philippines PCD
XXXX XxXX
Australia Austraclear Ltd. Poland CRBS
CHESS NDS
RITS
Austria OeKB AG Portugal Central de Valores
Mobiliarios
Bahrain None Romania NBR
SNCDD
Stock Exchange
Registry, Clearing &
Settlement
Bangladesh None Russia DCC
NDC
VTB
Belgium BKB Singapore CDP
CIK MAS
Bermuda None Slovak Republic NBS
SCP
Botswana None Slovenia KDD
Brazil CBLC South Africa STRATE
CETIP The Central Depository
SELIC (Pty) Ltd.
Bulgaria The Bulgarian National Spain Banco de Espana
Bank SCLV
The Central Depository
Canada Bank of Canada Sri Lanka CDS
CDS
Chile DCV Sweden VPC AB
X0-0
00
Xxxxx XXXX Xxxxxxxxxxx SIS SegaIntersettle AG
SSCCRC
Clearstream Taiwan TSCD
Colombia DCV Thailand TSD
DECEVAL
Costa Rica CEVAL Turkey CBT
Takasbank
Croatia CNB Ukraine Depository of the
Ministry of Finance National Bank of
SDA Ukraine
MFS Depository
Czech Republic SCP Uruguay None
TKD
Denmark VP United Kingdom CMO
CREST
Ecuador DECEVALE, S.A. Venezuela BCV
CVV
Egypt Misr for Clearing, Zambia Bank of Zambia
Settlement & Dep. XxXX CSD
Estonia ECDSL Zimbabwe None
Euroclear
Finland APK
France Sicovam SA
Germany Clearstream
Ghana None
Greece Bank of Greece
CSD
Hong Kong XXXXX
XXX
X0-0
00
Xxxxxxx Keler Ltd.
India CDSL
NSDL
Indonesia Bank Indonesia
PT.KSEI
Ireland CREST
Gilt Settlement Office
Israel TASE Clearing
House Ltd.
Italy Banca d-Italia
Monte Titoli
Ivory Coast* Depositaire Central/
Banque de Reglement
Japan Bank of Japan
JASDEC
Jordan SDC
Kazakhstan Kazakhstan Central
Securities Depository
Kenya Central Bank of Kenya
Central Depository
Korea KSD
Latvia Bank of Latvia
LCD
Lebanon Banque de Liban
MIDCLEAR
Lithuania CSDL
Luxembourg Clearstream
Malaysia BNM (SSTS)
MCD
Mauritius XXX
X0-0
00
Xxxxxx X.X. Xxxxxxx
Xxxxxxx Maroclear S.A.
Netherlands NECIGEF
New Zealand New Zealand Central
Securities Depository
Norway VPS
Oman MDSRC
Pakistan Central Depository Co.
of Pakistan Limited
State Bank of Pakistan
Peru CAVALI
* Benin, Burkina-Faso, Guinea Bissau, Mali, Nigeria, Senegal, and Togo are
available through the Xxxxx Xxxxx
X0-0
00
XXXXXXXX X
ADDITIONAL JURISDICTIONS COVERED
Pursuant to Article 3 of this Agreement, Delegate and Board agree that
the following jurisdictions shall be added to Appendix A1:
[insert additional countries/depositories]
Investors Bank & Trust Company
By: ___________________________________
Name:
Title:
[FUND]
By:____________________________________
Name:
Title:
DATE: ______________________________
X-0
00
XXXXXXXX X
ADDITIONAL FACTORS AND CRITERIA TO BE APPLIED
IN THE SELECTION OF ELIGIBLE FOREIGN CUSTODIANS
THAT ARE BANKING INSTITUTIONS OR TRUST COMPANIES
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are banking institutions or trust companies,
Delegate shall consider the following factors, if such information is available
(check all that apply):
___X_____ None
_________ Other (list below):
C-1
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APPENDIX D
FACTORS AND CRITERIA TO BE APPLIED
IN THE ESTABLISHING SYSTEMS FOR THE MONITORING OF
FOREIGN CUSTODY ARRANGEMENTS AND CONTRACTS
In establishing systems for the Monitoring of foreign custody
arrangements and contracts with Eligible Foreign Custodians, Delegate shall
consider the following factors, if such information is available:
1. Operating performance
2. Established practices and procedures
3. Relationship with market regulators
4. Contingency planning
X-0
00
XXXXXXXX X
INFORMATION REGARDING COUNTRY RISK
To aid the Board in its determinations regarding Country Risk, Delegate
will furnish Board annually with respect to the jurisdictions specified in
Article 3, the following information:
1. Copy of Addenda or Side Letters to Subcustodian Agreements
2. Legal Opinion, if available, with regard to:
a) Access to books and records by the Fund's accountants
b) Ability to recover assets in the event of bankruptcy of a
custodian
c) Ability to recover assets in the event of a loss
d) Likelihood of expropriation or nationalization, if available
e) Ability to repatriate or convert cash or cash equivalents
3. Audit Report
4. Copy of Balance Sheet from Annual Report
5. Country Profile Matrix containing market practice for:
a) Delivery versus payment
b) Settlement method
c) Currency restrictions
d) Buy-in practice
e) Foreign ownership limits
f) Unique market arrangements
X-0
00
XXXXXXXX X
AUTHORIZED REPRESENTATIVES
The names and addresses of each party's authorized representatives are set forth
below:
A. BOARD/FUND
CitiStreet Funds, Inc.
Xxx Xxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, President
Fax: (000) 000-0000
B. DELEGATE
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: _______________, Director, Client Management
Fax: (000) 000-0000
With a copy to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Assistant General Counsel
Fax: (000) 000-0000
F-1
