MASTER CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and entered into
as of (), 1997, by and between Xxxxxxxxx Variable Products Series Fund
("Investment Company"), for itself and for each of its Series listed on
Exhibit A, and State Street Bank and Trust Company, a Massachusetts
Trust Company authorized to do a banking business (the "Custodian").
RECITALS
A. The Investment Company is an investment company registered
under the Investment Company Act of 1940, as amended (the "Investment
Company Act") that invests and reinvests, for itself or on behalf of its
Series, in Domestic Securities and Foreign Securities.
B. The Custodian is, and has represented to the Investment
Company that the Custodian is, a "bank" as that term is defined in
Section 2(a)(5) of the Investment Company Act, and is eligible to
receive and maintain custody of investment company assets pursuant to
Section 17(f) and Rule 17f-2 thereunder.
C. The Custodian and the Investment Company, for itself and
for each of its Series, desire to provide for the retention of the
Custodian as a custodian of the assets of the Investment Company and
each Series, on the terms and subject to the provisions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1.0 FORM OF AGREEMENT
Although the parties have executed this Agreement in the form
of a Master Custody Agreement for administrative convenience, this
Agreement shall create a separate custody agreement for each Series
designated on Exhibit A, as though the Investment Company had separately
executed an identical custody agreement for itself and for each of its
Series. No rights, responsibilities or liabilities of any Series shall
be attributed to any other or Series.
Section 1.1 DEFINITIONS
For purposes of this Agreement, the following terms shall have
the respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board" shall mean the Board of Trustees, of the Investment
Company.
"Business Day" with respect to any Domestic Security means any
day, other than a Saturday or Sunday, that is not a day on which banking
institutions are authorized or required by law to be closed in The City
of New York and, with respect to Foreign Securities, a London Business
Day. "London Business Day" shall mean any day on which dealings and
deposits in U.S. dollars are transacted in the London interbank market.
"Custodian" shall mean State Street Bank and Trust Company.
"Domestic Securities" shall have the meaning provided in
Subsection 2.1 hereof.
"Executive Committee" shall mean the executive committee of the
Board.
"Foreign Custodian" shall have the meaning provided in Section
4.1 hereof.
"Foreign Securities" shall have the meaning provided in Section
2.1 hereof.
"Foreign Securities Depository" shall have the meaning provided
in Section 4.1 hereof.
"Fund" shall mean a Series.
"Investment Company" shall mean Xxxxxxxxx Variable Products
Series Fund
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended.
"Securities" shall have the meaning provided in Section 2.1
hereof.
"Securities System" shall have the meaning provided in Section
3.1 hereof.
"Securities System Account" shall have the meaning provided in
Subsection 3.8(a) hereof.
"Series" shall mean a series of the Investment Company which is
identified as such on Exhibit A.
"Shares" shall mean shares of beneficial interest of the
Investment Company.
"Subcustodian" shall have the meaning provided in Subsection
3.7 hereof, but shall not include any Foreign Custodian.
"Transfer Agent" shall mean the duly appointed and acting
transfer agent for the Investment Company.
"Writing" shall mean a communication in writing, a
communication by telex, facsimile transmission, bankwire or other
teleprocess or electronic instruction system acceptable to the Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 APPOINTMENT OF CUSTODIAN. The Investment Company hereby
appoints and designates the Custodian as a custodian of the assets of
the Fund, including cash denominated in U.S. dollars or foreign currency
("cash"), securities the Fund desires to be held within the United
States ("Domestic Securities") and securities it desires to be held
outside the United States ("Foreign Securities"). Domestic Securities
and Foreign Securities are sometimes referred to herein, collectively,
as "Securities." The Custodian hereby accepts such appointment and
designation and agrees that it shall maintain custody of the assets of
the Fund delivered to it hereunder in the manner provided for herein.
2.2 DELIVERY OF ASSETS. The Investment Company may deliver to
the Custodian Securities and cash owned by the Funds, payments of
income, principal or capital distributions received by the Funds with
respect to Securities owned by the Funds from time to time, and the
consideration received by the Funds for such Shares or other securities
of the Funds as may be issued and sold from time to time. The Custodian
shall have no responsibility whatsoever for any property or assets of
the Funds held or received by the Funds and not delivered to the
Custodian pursuant to and in accordance with the terms hereof. All
Securities accepted by the Custodian on behalf of the Funds under the
terms of this Agreement shall be in "street name" or other good delivery
form as determined by the Custodian.
2.3 SUBCUSTODIANS. Upon receipt of Proper Instructions and a
certified copy of a resolution of the Board or of the Executive
Committee, and certified by the Secretary or an Assistant Secretary, of
an Investment Company, the Custodian may from time to time appoint one
or more other Subcustodians or Foreign Custodians to hold assets of the
affected Funds in accordance with the provisions of this Agreement.
2.4 NO DUTY TO MANAGE. The Custodian, a Subcustodian or a
Foreign Custodian shall not have any duty or responsibility to manage or
recommend investments of the assets of any Fund held by them or to
initiate any purchase, sale or other investment transaction in the
absence of Proper Instructions or except as otherwise specifically
provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO ASSETS OF THE FUNDS
HELD BY THE CUSTODIAN
3.1 HOLDING SECURITIES. The Custodian shall hold and
physically segregate from any property owned by the Custodian, for the
account of each Fund, all non-cash property delivered by each Fund to
the Custodian hereunder other than Securities which, pursuant to
Subsection 3.8 hereof, are held through a registered clearing agency, a
registered securities depository, the Federal Reserve's book-entry
securities system (referred to herein, individually, as a "Securities
System"), or held by a Subcustodian, Foreign Custodian or in a Foreign
Securities Depository.
3.2 DELIVERY OF SECURITIES. Except as otherwise provided
in Subsection 3.5 hereof, the Custodian, upon receipt of Proper
Instructions, shall release and deliver Securities owned by a Fund and
held by the Custodian in the following cases or as otherwise directed in
Proper Instructions:
(a) except as otherwise provided herein, upon sale of such
Securities for the account of the Fund and receipt by the Custodian, a
Subcustodian or a Foreign Custodian of payment therefor;
(b) upon the receipt of payment by the Custodian, a
Subcustodian or a Foreign Custodian in connection with any repurchase
agreement related to such Securities entered into by the Fund;
(c) in the case of a sale effected through a Securities
System, in accordance with the provisions of Subsection 3.8 hereof;
(d) to a tender agent or other authorized agent in
connection with (i) a tender or other similar offer for Securities owned
by the Fund, or (ii) a tender offer or repurchase by the Fund of its own
Shares;
(e) 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 Custodian, a Subcustodian or a Foreign Custodian;
(f) to the issuer thereof, or its agent, for transfer into
the name or nominee name of the Fund, the name or nominee name of the
Custodian, the name or nominee name of any Subcustodian or Foreign
Custodian; 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 Custodian, a Subcustodian or Foreign Custodian;
(g) to the broker selling the same for examination in
accordance with the "street delivery" custom;
(h) for exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, or reorganization of the issuer
of such Securities, or pursuant to a conversion of such Securities;
provided that, in any such case, the new Securities and cash, if any,
are to be delivered to the Custodian or a Subcustodian;
(i) in the case of warrants, rights or similar securities,
the surrender thereof in connection with 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 Custodian, a subcustodian or a Foreign Custodian;
(j) for delivery in connection with any loans of
Securities made by the Fund, but only against receipt by the Custodian,
a Subcustodian or a Foreign Custodian of adequate collateral as
determined by the Fund (and identified in Proper Instructions
communicated to the Custodian), 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 account of the Custodian, a
Subcustodian or a Foreign Custodian in the Federal Reserve's book-entry
securities system, the Custodian will not be held liable or responsible
for the delivery of Securities owned by the Fund prior to the receipt of
such collateral;
(k) for delivery as security in connection with any
borrowings by the Fund requiring a pledge of assets by the Fund, but
only against receipt by the Custodian, a Subcustodian or a Foreign
Custodian of amounts borrowed;
(l) for delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, a Subcustodian or a Foreign
Custodian and a broker-dealer relating to compliance with the rules of
registered clearing corporations 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 Fund;
(m) for delivery in accordance with the provisions of any
agreement among the Fund, the Custodian, a Subcustodian or a Foreign
Custodian and a futures commission merchant, 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 Fund;
(n) upon the receipt of instructions from the Transfer
Agent for delivery to the Transfer Agent or to the holders of Shares in
connection with distributions in kind in satisfaction of requests by
holders of Shares for repurchase or redemption; and
(o) for any other proper purpose, but only upon receipt of
Proper Instructions, and a certified copy of a resolution of the Board
or of the Executive Committee certified by the Secretary or an Assistant
Secretary of the Fund, specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper purpose, and naming the person or
persons to whom delivery of such securities shall be made.
3.3 REGISTRATION OF SECURITIES. Securities held by the
Custodian, a Subcustodian or a Foreign Custodian (other than bearer
Securities) shall be registered in the name or nominee name of the
appropriate Fund, in the name or nominee name of the Custodian or in the
name or nominee name of any Subcustodian or Foreign Custodian. Each
Fund agrees to hold the Custodian, any such nominee, Subcustodian or
Foreign Custodian harmless from any liability as a holder of record of
such Securities.
3.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts for each Fund, subject only to draft
or order by the Custodian acting pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it hereunder from or for the
account of each Fund, other than cash maintained by a Fund in a bank
account established and used in accordance with Rule 17f-3 under the
Fund Act. Funds held by the Custodian for a Fund may be deposited by it
to its credit as Custodian in the banking departments of the Custodian,
a Subcustodian or a Foreign Custodian. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be withdrawable by
the Custodian only in that capacity. In the event a Fund's account for
any reason becomes overdrawn, or in the event an action requested in
Proper Instructions would cause such an account to become overdrawn, the
Custodian shall immediately notify the affected Fund.
3.5 COLLECTION OF INCOME; TRADE SETTLEMENT; CREDITING OF
ACCOUNTS. The Custodian shall collect income payable with respect to
Securities owned by each Fund, settle Securities trades for the account
of each Fund and credit and debit each Fund's account with the Custodian
in connection therewith as stated in this Subsection 3.5. This
Subsection shall not apply to repurchase agreements, which are treated
in Subsection 3.2(b), above.
(a) Upon receipt of Proper Instructions, the Custodian
shall effect the purchase of a Security by charging the account of the
Fund on the contractual settlement date, and by making payment against
delivery. If the seller or selling broker fails to deliver the Security
within a reasonable period of time, the Custodian shall notify the Fund
and credit the transaction amount to the account of the Fund, but the
Custodian shall have no further liability or responsibility for the
transaction.
(b) Upon receipt of Proper Instructions, the Custodian
shall effect the sale of a Security by withdrawing a certificate or
other indicia of ownership from the account of the Fund and by making
delivery against payment, and shall credit the account of the Fund with
the amount of such proceeds on the contractual settlement date. If the
purchaser or the purchasing broker fails to make payment within a
reasonable period of time, the Custodian shall notify the Fund, debit
the Fund's account for any amounts previously credited to it by the
Custodian as proceeds of the transaction and, if delivery has not been
made, redeposit the Security into the account of the Fund.
(c) The Fund is responsible for ensuring that the
Custodian receives timely and accurate Proper Instructions to enable the
Custodian to effect settlement of any purchase or sale. If the
Custodian does not receive such instructions within the required time
period, the Custodian shall have no liability of any kind to any person,
including the Fund, for failing to effect settlement on the contractual
settlement date. However, the Custodian shall use its best reasonable
efforts to effect settlement as soon as possible after receipt of Proper
Instructions.
(d) The Custodian shall credit the account of the Fund
with interest income payable on interest bearing Securities on payable
date. Dividends and other amounts payable with respect to Domestic
Securities and Foreign Securities shall be credited to the account of
the Fund when received by the Custodian. The Custodian shall not be
required to commence suit or collection proceedings or resort to any
extraordinary means to collect such income and other amounts payable
with respect to Securities owned by the Fund. The collection of income
due the Fund on Domestic Securities loaned pursuant to the provisions of
Subsection 3.2(j) shall be the responsibility of the Fund. The
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
Custodian of the income to which the Fund is entitled. The Custodian
shall have no liability to any person, including the Fund, if the
Custodian credits the account of the Fund with such income or other
amounts payable with respect to Securities owned by the Fund (other than
Securities loaned by the Fund pursuant to Subsection 3.2(j) hereof) and
the Custodian subsequently is unable to collect such income or other
amounts from the payors thereof within a reasonable time period, as
determined by the Custodian in its sole discretion. In such event, the
Custodian shall be entitled to reimbursement of the amount so credited
to the account of the Fund.
3.6 PAYMENT OF FUND MONIES. Upon receipt of Proper
Instructions the Custodian shall pay out monies of a Fund in the
following cases or as otherwise directed in Proper Instructions:
(a) upon the purchase of Securities, futures contracts or
options on futures contracts for the account of the Fund but only,
except as otherwise provided herein, (i) against the delivery of such
securities, or evidence of title to futures contracts or options on
futures contracts, to the Custodian or a Subcustodian registered
pursuant to Subsection 3.3 hereof or in proper form for transfer; (ii)
in the case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Subsection 3.8 hereof; or
(iii) in the case of repurchase agreements entered into between the Fund
and the Custodian, another bank or a broker-dealer (A) against delivery
of the Securities either in certificated form to the Custodian or a
Subcustodian or through an entry crediting the Custodian's account at
the appropriate Federal Reserve Bank with such Securities or (B) against
delivery of the confirmation evidencing purchase by the Fund of
Securities owned by the Custodian or such broker-dealer or other bank
along with written evidence of the agreement by the Custodian or such
broker-dealer or other bank to repurchase such Securities from the Fund;
(b) in connection with conversion, exchange or surrender
of Securities owned by the Fund as set forth in Subsection 3.2 hereof;
(c) for the redemption or repurchase of Shares issued by
the Fund;
(d) for the payment of any expense or liability incurred
by the Fund, including but not limited to the following payments for the
account of the Fund: custodian fees, interest, taxes, 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; and
(e) for the payment of any dividends or distributions
declared by the Board with respect to the Shares.
3.7 APPOINTMENT OF SUBCUSTODIANS. The Custodian may, upon
receipt of Proper Instructions, another bank or trust company, which is
itself qualified under the Investment Company Act to act as a custodian
(a "Subcustodian"), as the agent of the Custodian to carry out such of
the duties of the Custodian hereunder as a Custodian may from time to
time direct; provided, however, that the appointment of any Subcustodian
shall not relieve the Custodian of its responsibilities or liabilities
hereunder.
3.8 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain Domestic Securities owned by a
Fund in a 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:
(a) the Custodian may hold Domestic Securities of the Fund
in the Depository Trust Company or the Federal Reserve's book entry
system or, upon receipt of Proper Instructions, in another Securities
System provided that such securities are held in an account of the
Custodian in the Securities System ("Securities System Account") which
shall not include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
(b) the records of the Custodian with respect to Domestic
Securities of the Fund which are maintained in a Securities System shall
identify by book-entry those Domestic Securities belonging to the Fund;
(c) the Custodian shall pay for Domestic Securities
purchased for the account of the Fund upon (i) receipt of advice from
the Securities System that such securities have been transferred to the
Securities System Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer Domestic Securities
sold for the account of the Fund upon (A) receipt of advice from the
Securities System that payment for such securities has been transferred
to the Securities System Account, and (B) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the Securities System
of transfers of Domestic Securities for the account of the Fund shall be
maintained for the Fund by the Custodian and be provided to the Fund at
its request. Upon request, the Custodian shall furnish the Fund
confirmation of the transfer to or from the account of the Fund in the
form of a written advice or notice; and
(d) upon request, the Custodian shall provide the Fund
with any report obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding domestic securities deposited in the Securities System.
3.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated account or
accounts for and on behalf of a Fund, into which account or accounts may
be transferred cash and/or Securities, including Securities maintained
in an account by the Custodian pursuant to Section 3.8 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer or futures commission merchant, relating
to compliance with the rules of registered clearing corporations and of
any 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 Fund, (ii) for purposes of
segregating cash or securities in connection with options purchased,
sold or written by the Fund or commodity futures contracts or options
thereon purchased or sold by the Fund, and (iii) for other proper
corporate purposes, but only, in the case of this clause (iii), upon
receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board or of the Executive Committee 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.
3.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The 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 Fund held by
it and in connection with transfers of such securities.
3.11 PROXIES. The Custodian shall, with respect to the
Securities held hereunder, promptly deliver to each Fund all proxies,
all proxy soliciting materials and all notices relating to such
Securities. If the Securities are registered otherwise than in the name
of a Fund or a nominee of a Fund, the Custodian shall use its best
reasonable efforts, consistent with applicable law, to cause all proxies
to be promptly executed by the registered holder of such Securities in
accordance with Proper Instructions.
3.12 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The
Custodian shall transmit promptly to each Fund all written information
(including, without limitation, pendency of calls and maturities of
Securities and expirations of rights in connection therewith and notices
of exercise of put and call options written by the Fund and the maturity
of futures contracts purchased or sold by the Fund) received by the
Custodian from issuers of Securities being held for the Fund. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to each Fund all written information received by the Custodian
from issuers of the Securities whose tender or exchange is sought and
from the party (or its agents) making the tender or exchange offer. If
a Fund desires to take action with respect to any tender offer, exchange
offer or any other similar transaction, the Fund shall notify the
Custodian at least three Business Days prior to the date of which the
Custodian is to take such action.
3.13 REPORTS BY CUSTODIAn. The Custodian shall each business
day furnish each Fund with a statement summarizing all transactions and
entries for the account of the Fund for the preceding day. At the end
of every month, the Custodian shall furnish each Fund with a list of the
cash and portfolio securities showing the quantity of the issue owned,
the cost of each issue and the market value of each issue at the end of
each month. Such monthly report shall also contain separate listings of
(a) unsettled trades and (b) when-issued securities. The Custodian
shall furnish such other reports as may be mutually agreed upon from
time-to-time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT TO ASSETS OF
THE FUNDS HELD OUTSIDE THE UNITED STATES
4.1 CUSTODY OUTSIDE THE UNITED STATES. Each Fund authorizes
the Custodian to hold Foreign Securities and cash in custody accounts
which have been established by the Custodian with (i) its foreign
branches, (ii) foreign banking institutions, foreign branches of United
States banks and subsidiaries of United States banks or bank holding
companies (each a "Foreign Custodian") and (iii) Foreign Securities
depositories or clearing agencies (each a "Foreign Securities
Depository"); provided, however, that the appropriate Board or Executive
Committee has approved in advance the use of each such Foreign Custodian
and Foreign Securities Depository and the contract between the Custodian
and each Foreign Custodian and that such approval is set forth in Proper
Instructions and a certified copy of a resolution of the Board or of the
Executive Committee certified by the Secretary or an Assistant Secretary
of the appropriate Investment Company. Unless expressly provided to the
contrary in this Section 4, custody of Foreign Securities and assets
held outside the United States by the Custodian, a Foreign Custodian or
through a Foreign Securities Depository shall be governed by this
Agreement, including Section 3 hereof.
4.2 ASSETS TO BE HELD. The Custodian shall limit the
securities and other assets maintained in the custody of its foreign
branches, Foreign Custodians and Foreign Securities Depositories to:
(i) "foreign securities", as defined in paragraph (c) (1) of Rule 17f-5
under the Fund Act, and (ii) cash and cash equivalents in such amounts
as the Custodian or an affected Fund may determine to be reasonably
necessary to effect the Fund's Foreign Securities transactions.
4.3 OMITTED.
4.4 SEGREGATION OF SECURITIES. The Custodian shall identify
on its books and records as belonging to the appropriate Fund, the
Foreign Securities of each Fund held by each Foreign Custodian.
4.5 AGREEMENTS WITH FOREIGN CUSTODIANS. Each agreement
between the Custodian and a Foreign Custodian shall be substantially in
the form as delivered to the Investment Company for its Board's review,
and shall not be amended in a way that materially adversely affects any
Fund without the prior written consent of the Fund. Upon request, the
Custodian shall certify to the Funds that an agreement between the
Custodian and a Foreign Custodian meets the requirements of Rule 17f-5
under the 1940 Act.
4.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUNDS. Upon
request of a Fund, the Custodian will use its best reasonable efforts to
arrange for the independent accountants or auditors of the Fund to be
afforded access to the books and records of any Foreign Custodian
insofar as such books and records relate to the custody by any such
Foreign Custodian of assets of the Fund.
4.7 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNTS. Upon receipt of
Proper Instructions, the Custodian shall instruct the appropriate
Foreign Custodian to transfer, exchange or deliver Foreign Securities
owned by a Fund, but, except to the extent explicitly provided herein,
only in any of the cases specified in Subsection 3.2. Upon receipt of
Proper Instructions, the Custodian shall pay out or instruct the
appropriate Foreign Custodian to pay out monies of a Fund in any of the
cases specified in Subsection 3.6. Notwithstanding anything herein to
the contrary, settlement and payment for Foreign Securities received for
the account of a Fund and delivery of Foreign Securities maintained for
the account of a Fund may be effected in accordance with the customary
or 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.
Foreign Securities maintained in the custody of a Foreign Custodian may
be maintained in the name of such entity or its nominee name to the same
extent as set forth in Section 3.3 of this Agreement and each Fund
agrees to hold any Foreign Custodian and its nominee harmless from any
liability as a holder of record of such securities.
4.8 LIABILITY OF FOREIGN CUSTODIAN. Each agreement between
the Custodian and a Foreign Custodian shall, unless otherwise mutually
agreed to by the Custodian and a Fund, require the Foreign Custodian to
exercise reasonable care or, alternatively, impose a contractual
liability for breach of contract without an exception based upon a
standard of care in the performance of its duties and to indemnify and
hold harmless the Custodian from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the
Foreign Custodian's performance of such obligations. At the election of
a Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a Foreign Custodian 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, unless such subrogation
is prohibited by local law.
4.9 MONITORING RESPONSIBILITIES.
(a) The Custodian will promptly inform each Fund in the
event that the Custodian learns of a material adverse change in the
financial condition of a Foreign Custodian or learns that a Foreign
Custodian's financial condition has declined or is likely to decline
below the minimum levels required by Rule 17f-5 of the 1940 Act.
(b) The custodian will furnish such information as may be
reasonably necessary to assist the Investment Company's Board in its
annual review and approval of the continuance of all contracts or
arrangements with Foreign Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper Instructions" means
instructions of a Fund received by the Custodian via telephone or in
Writing which the Custodian believes in good faith to have been given by
Authorized Persons (as defined below) or which are transmitted with
proper testing or authentication pursuant to terms and conditions which
the Custodian may specify. Any Proper Instructions delivered to the
Custodian by telephone shall promptly thereafter be confirmed in
accordance with procedures, and limited in subject matter, as mutually
agreed upon by the parties. Unless otherwise expressly provided, all
Proper Instructions shall continue in full force and effect until
canceled or superseded. If the Custodian requires test arrangements,
authentication methods or other security devices to be used with respect
to Proper Instructions, any Proper Instructions given by the Funds
thereafter shall be given and processed in accordance with such terms
and conditions for the use of such arrangements, methods or devices as
the Custodian may put into effect and modify from time to time. The
Funds shall safeguard any testkeys, identification codes or other
security devices which the Custodian shall make available to them. The
Custodian may electronically record any Proper Instructions given by
telephone, and any other telephone discussions, with respect to its
activities hereunder. As used in this Agreement, the term "Authorized
Persons" means such officers or such agents of a Fund as have been
properly appointed pursuant to a resolution of the Board or Executive
Committee, a certified copy of which has been provided to the Custodian,
to act on behalf of the Fund under this Agreement. Each of such persons
shall continue to be an Authorized Person until such time as the
Custodian receives Proper Instructions that any such officer or agent is
no longer an Authorized Person.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority
from a Fund:
(a) make payments to itself or others for minor expenses
of handling Securities or other similar items relating to its duties
under this Agreement, provided that all such payments shall be accounted
for to the Fund;
(b) endorse for collection, in the name of the Fund,
checks, drafts and other negotiable instruments; and
(c) 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 Fund except as
otherwise provided in Proper Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any
instructions (conveyed by telephone or in Writing), notice, request,
consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly given or executed by or on behalf of a
Fund. The Custodian may receive and accept a certified copy of a
resolution of the Board or Executive Committee as conclusive evidence
(a) of the authority of any person to act in accordance with such
resolution or (b) of any determination or of any action by the Board or
Executive Committee as described in such resolution, and such resolution
may be considered as in full force and effect until receipt by the
Custodian of written notice by an Authorized Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary
information in its possession (to the extent permissible under
applicable law) to the entity or entities appointed by the Board to keep
the books of account of a Fund and/or compute the net asset value per
Share of the outstanding Shares of a Fund.
Section 9. RECORDS
The Custodian shall create and maintain all records relating to
its activities under this Agreement which are required with respect to
such activities under Section 31 of the Investment Company Act and Rules
31a-1 and 31a-2 thereunder. All such records shall be the property of
the Investment Company and shall at all times during the regular
business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Investment Company and
employees and agents of the Securities and Exchange Commission. The
Custodian shall, at a Fund's request, supply the Fund with a tabulation
of Securities and Cash owned by the Fund and held by the 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 Custodian, include
certificate numbers in such tabulations.
Section 10. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time
between the Investment Company, on behalf of each Fund, and the
Custodian. In addition, should the Custodian in its discretion advance
funds (to include overdrafts) to or on behalf of a Fund pursuant to
Proper Instructions, the Custodian shall be entitled to prompt
reimbursement of any amounts advanced. In the event of such an advance,
and to the extent permitted by the 1940 Act and the Fund's policies, the
Custodian shall have a continuing lien and security interest in and to
the property of the Fund in the possession or control of the Custodian
or of a third party acting in the Custodian's behalf, until the advance
is reimbursed. Nothing in this Agreement shall obligate the Custodian
to advance funds to or on behalf of a Fund, or to permit any borrowing
by a Fund except for borrowings for temporary purposes, to the extent
permitted by the Fund's policies.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance of only
such duties as are set forth herein or contained in Proper Instructions
and shall use reasonable care in carrying out such duties. The
Custodian shall be liable to a Fund for any loss which shall occur as
the result of the failure of a Foreign Custodian engaged directly or
indirectly by the Custodian to exercise reasonable care with respect to
the safekeeping of securities and other assets of the Fund to the same
extent that the Custodian would be liable to the Fund if the Custodian
itself were holding such securities and other assets. Nothing in this
Agreement shall be read to limit the responsibility or liability of the
Custodian or a Foreign Custodian for their failure to exercise
reasonable care with regard to any decision or recommendation made by
the Custodian or Subcustodian regarding the use or continued use of a
Foreign Securities Depository. In the event of any loss to a Fund by
reason of the failure of the Custodian or a Foreign Custodian to utilize
reasonable care, the Custodian shall be liable to the Fund to the extent
of the Fund's damages, to be determined based on the market value of the
property which is the subject of the loss at the date of discovery of
such loss and without reference to any special conditions or
circumstances. The Custodian shall be held to the exercise of
reasonable care in carrying out this Agreement, and shall not be liable
for acts or omissions unless the same constitute negligence or willful
misconduct on the part of the Custodian or any Foreign Custodian engaged
directly or indirectly by the Custodian. Each Fund agrees to indemnify
and hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including legal
fees and expenses) incurred by the Custodian or its nominees in
connection with the performance of this Agreement with respect to such
Fund, except such as may arise from any negligent action, negligent
failure to act or willful misconduct on the part of the indemnified
entity or any Foreign Custodian. The Custodian shall be entitled to
rely, and may act, on advice of counsel (who may be counsel for a Fund)
on all matters and shall be without liability for any action reasonably
taken or omitted pursuant to such advice. The Custodian need not
maintain any insurance for the benefit of any Fund.
All collections of funds or other property paid or distributed
in respect of Securities held by the Custodian, agent, Subcustodian or
Foreign Custodian hereunder shall be made at the risk of the Funds. The
Custodian shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Custodian, agent, Subcustodian or by
a Foreign Custodian of any payment, redemption or other transaction
regarding securities in respect of which the Custodian has agreed to
take action as provided in Section 3 hereof. The Custodian shall not be
liable for any action taken in good faith upon Proper Instructions or
upon any certified copy of any resolution of the Board and may rely on
the genuineness of any such documents which it may in good faith believe
to be validly executed. Notwithstanding the foregoing, the Custodian
shall not be liable for any loss resulting from, or caused by, the
direction of a Fund to maintain custody of any Securities or cash in a
foreign country including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, civil
disturbance, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation or other similar occurrences, or events
beyond the control of the Custodian. Finally, the Custodian shall not
be liable for any taxes, including interest and penalties with respect
thereto, that may be levied or assessed upon or in respect of any assets
of any Fund held by the Custodian.
Section 12. LIMITED LIABILITY OF THE INVESTMENT COMPANY
The Custodian acknowledges that it has received notice of and
accepts the limitations of liability as set forth in the Investment
Company's Agreement and Declaration of Trust, Articles of Incorporation,
or Agreement of Limited Partnership. The Custodian agrees that each
Fund's obligation hereunder shall be limited to the assets of the Fund,
and that the Custodian shall not seek satisfaction of any such
obligation from the shareholders of the Fund nor from any Board Member,
officer, employee, or agent of the Fund or the Investment Company on
behalf of the Fund.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of its
execution and shall continue in full force and effect until terminated
as hereinafter provided. This Agreement may be terminated by the
Investment Company, on behalf of a Fund, or by the Custodian by 90 days
notice in Writing to the other provided that any termination by the
Investment Company shall be authorized by a resolution of the Board, a
certified copy of which shall accompany such notice of termination, and
provided further, that such resolution shall specify the names of the
persons to whom the Custodian shall deliver the assets of the affected
Funds held by the Custodian. If notice of termination is given by the
Custodian, the Investment Company shall, within 90 days following the
giving of such notice, deliver to the Custodian a certified copy of a
resolution of the Board specifying the names of the persons to whom the
Custodian shall deliver assets of the affected Funds held by the
Custodian. In either case the Custodian will deliver such assets to the
persons so specified, after deducting therefrom any amounts which the
Custodian determines to be owed to it hereunder (including all costs and
expenses of delivery or transfer of Fund assets to the persons so
specified). If within 90 days following the giving of a notice of
termination by the Custodian, the Custodian does not receive from the
Investment Company certified copies of resolutions of the Board
specifying the names of the persons to whom the Custodian shall deliver
the assets of the Funds held by the Custodian, the Custodian, at its
election, may deliver such assets to a bank or trust company doing
business in the State of California to be held and disposed of pursuant
to the provisions of this Agreement or may continue to hold such assets
until a certified copy of one or more resolutions as aforesaid is
delivered to the Custodian. The obligations of the parties hereto
regarding the use of reasonable care, indemnities and payment of fees
and expenses shall survive the termination of this Agreement.
Section 14. MISCELLANEOUS
14.1 RELATIONSHIP. Nothing contained in this Agreement shall
(i) create any fiduciary, joint venture or partnership relationship
between the Custodian and any Fund or (ii) be construed as or constitute
a prohibition against the provision by the Custodian or any of its
affiliates to any Fund of investment banking, securities dealing or
brokerages services or any other banking or financial services.
14.2 FURTHER ASSURANCES. Each party hereto shall furnish to
the other party hereto such instruments and other documents as such
other party may reasonably request for the purpose of carrying out or
evidencing the transactions contemplated by this Agreement.
14.3 ATTORNEYS' FEES. If any lawsuit or other action or
proceeding relating to this Agreement is brought by a party hereto
against the other party hereto, the prevailing party shall be entitled
to recover reasonable attorneys' fees, costs and disbursements
(including allocated costs and disbursements of in-house counsel), in
addition to any other relief to which the prevailing party may be
entitled.
14.4 NOTICES. Except as otherwise specified herein, each
notice or other communication hereunder shall be in Writing and shall be
delivered to the intended recipient at the following address (or at such
other address as the intended recipient shall have specified in a
written notice given to the other parties hereto):
if to a Fund or Investmentif to the Custodian:
Company:
Xxxxxxxxx Variable ProductsState Street Bank and Trust
Series Fund Company
c/o Franklin Resources, Inc. Mutual Fund Custody Manager
000 Xxxxxxxx Xxxxxx Xxxx. 0000 Xxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000 Xxxxx Xxxxxx, XX 00000
Attention: Chief Legal
Officer
14.5 HEADINGS. The underlined headings contained herein are
for convenience of reference only, shall not be deemed to be a part of
this Agreement and shall not be referred to in connection with the
interpretation hereof.
14.6 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original and both of
which, when taken together, shall constitute one agreement.
14.7 GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the State
of New York (without giving effect to principles of conflict of laws).
14.8 FORCE MAJEURE. Notwithstanding the provisions of
Section 11 hereof regarding the Custodian's general standard of care, no
failure, delay or default in performance of any obligation hereunder
shall constitute an event of default or a breach of this agreement, or
give rise to any liability whatsoever on the part of one party hereto to
the other, to the extent that such failure to perform, delay or default
arises out of a cause beyond the control and without negligence of the
party otherwise chargeable with failure, delay or default; including,
but not limited to: action or inaction of governmental, civil or
military authority; fire; strike; lockout or other labor dispute; flood;
war; riot; theft; earthquake; natural disaster; breakdown of public or
common carrier communications facilities; computer malfunction; or act,
negligence or default of the other party. This paragraph shall in no
way limit the right of either party to this Agreement to make any claim
against third parties for any damages suffered due to such causes.
14.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns, if any.
14.10 WAIVER. No failure on the part of any person to
exercise any power, right, privilege or remedy hereunder, and no delay
on the part of any person in the exercise of any power, right, privilege
or remedy hereunder, shall operate as a waiver thereof; and no single or
partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.
14.11 AMENDMENTS. This Agreement may not be amended,
modified, altered or supplemented other than by means of an agreement or
instrument executed on behalf of each of the parties hereto.
14.12 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any person or set
of circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than
those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by
law.
14.13 PARTIES IN INTEREST. None of the provisions of this
Agreement is intended to provide any rights or remedies to any person
other than the Investment Companies, for themselves and for the Funds,
and the Custodian and their respective successors and assigns, if any.
14.14 PRE-EMPTION OF OTHER AGREEMENTS. In the event of any
conflict between this Agreement, including without limitation any
amendments hereto, and any other agreement which may now or in the
future exist between the parties, the provisions of this Agreement shall
prevail.
14.15 VARIATIONS OF PRONOUNS. Whenever required by the
context hereof, the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter
genders; and the neuter gender shall include the masculine and feminine
genders.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above
written.
State Street Bank and Trust Company
By: _____________________________
Xxxxxx Xxxxx
Its: _____________________________
Executive Vice President
Xxxxxxxxx Variable Products Series Funds
By: ______________________________
()
Its:
Vice President & Secretary
