AMENDED AND RESTATED
CUSTODY AGREEMENT
AGREEMENT dated as of May 31, 2001, is a complete restatement of that
certain custody agreement dated October 6, 1999 between US Allianz Variable
Insurance Products Trust, a business trust organized under the laws of the State
of Delaware, having its principal office and place of business at 00 Xxxxxx Xxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000(xxx "Fund"), and THE NORTHERN TRUST COMPANY
(the "Custodian"), an Illinois company with its principal place of business at
00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Articles of Incorporation " shall mean the [Articles of
Incorporation] [Declaration of Trust] of the Fund, including all
amendments thereto.
(b) "Authorized Person" shall be deemed to include the Chairman of the
Board of Directors, the President, and any Vice President, the
Secretary, the Treasurer or any other person, whether or not any such
person is an officer or employee of the Fund, duly authorized by the
Board of Directors to give Instructions on behalf of the Fund and
listed in the certification annexed hereto as Schedule A or such other
certification as may be received by the Custodian from time to time
pursuant to Section 18(a).
(c) "Board of Directors" shall mean the Board of Directors or Trustees of
the Fund.
(d) "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor
or successors and its nominee or nominees.
(e) "Delegate of the Fund" shall mean and include any entity to whom the
Board of Directors of the Fund has delegated responsibility under Rule
17f-5 of the 1940 Act.
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(f) "Depository" shall mean The Depository Trust Company, a clearing
agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, the use of which
is hereby specifically authorized. The term "Depository" shall further
mean and include any other person named in an Instruction and approved
by the Fund to act as a depository in the manner required by Rule
17f-4 of the 1940 Act, its successor or successors and its nominee or
nominees.
(g) "Instruction" shall mean written (including telecopied, telexed, or
electronically transmitted in a form that can be converted to print)
or oral instructions actually received by the Custodian which the
Custodian reasonably believes were given by an Authorized Person. An
Instruction shall also include any instrument in writing actually
received by the Custodian which the Custodian reasonably believes to
be genuine and to be signed by any two officers of the Fund, whether
or not such officers are Authorized Persons. Except as otherwise
provided in this Agreement, "Instructions" may include instructions
given on a standing basis.
(h) "1940 Act" shall mean the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
(i) "Portfolio" refers to each of the separate and distinct investment
portfolios of the Fund which the Fund and the Custodian shall have
agreed in writing shall be subject to this Agreement, as identified in
Schedule B hereto.
(j) "Prospectus" shall include each current prospectus and statement of
additional information of the Fund with respect to a Portfolio.
(k) "Rule 17f-5" shall mean Rule 17f-5 under the 1940 Act.
(l) "Rule 17f-7" shall mean Rule 17f-7 under the 1940 Act.
(m) "Shares" refers to the shares of the Fund.
(n) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and
other securities, commodity interests and investments from time to
time owned by the Fund and held in a Portfolio.
(o) "Sub-Custodian" shall mean and include (i) any branch of the
Custodian, and (ii) any "eligible foreign custodian," as that term is
defined in Rule 17f-5 under the 1940 Act, approved by the Fund or a
Delegate of the Fund in the
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manner required by Rule 17f-5. For the avoidance of doubt, the term
"Sub-Custodian" shall not include any central securities depository or
clearing agency.
(o) "Eligible Securities Depository" shall have the same meaning as set
forth in Rule 17f-7(b)(1).
(p) "Transfer Agent" shall mean the person which performs as the transfer
agent, dividend disbursing agent and shareholder servicing agent for
the Fund.
2. APPOINTMENT OF CUSTODIAN.
(a) The Fund hereby constitutes and appoints the Custodian as custodian of
all the Securities and moneys owned by or in the possession of a
Portfolio during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
3. APPOINTMENT AND REMOVAL OF SUB-CUSTODIANS.
(a) The Custodian may appoint one or more Sub-Custodians to act as
sub-custodian or sub-custodians of Securities and moneys at any time
held in any Portfolio, upon the terms and conditions specified in this
Agreement. The Custodian shall oversee the maintenance by any
Sub-Custodian of any Securities or moneys of any Portfolio.
(b) The Agreement between the Custodian and each Sub-Custodian described
in clause (ii) of Section 1(o) and acting hereunder shall contain any
provisions necessary to comply with Rule 17f-5 under the 1940 Act.
(c) Prior to the Custodian's use of any Sub-Custodian described in clause
(ii) of Paragraph 1(o), the Fund or a Delegate of the Fund must
approve such Sub-Custodian in the manner required by Rule 17f-5 and
provide the Custodian with satisfactory evidence of such approval.
(d) The Custodian shall promptly take such steps as may be required to
remove any Sub-Custodian that has ceased to be an "eligible foreign
custodian" or has otherwise ceased to meet the requirements under Rule
17f-5. If the Custodian intends to remove any Sub-Custodian previously
approved by the Fund or a Delegate of the Fund pursuant to paragraph
3(c), and the Custodian proposes to replace such Sub-Custodian with a
Sub-Custodian that has not yet been approved by the Fund or a Delegate
of the Fund, it will so notify the Fund or a Delegate of the Fund and
provide it with information reasonably necessary to determine such
proposed Sub-Custodian's eligibility under Rule 17f-5, including a
copy of the proposed agreement with such Sub-Custodian. The Fund shall
at the meeting of
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the Board of Directors next following receipt of such notice and
information, or a Delegate of the Fund shall promptly after receipt of
such notice and information, determine whether to approve the proposed
Sub-Custodian and will promptly thereafter give written notice of the
approval or disapproval of the proposed action.
(e) The Custodian hereby represents to the Fund that in its opinion,
after due inquiry, the established procedures to be followed by each
Sub-Custodian in connection with the safekeeping of property of a
Portfolio pursuant to this Agreement afford reasonable care for the
safekeeping of such property based on the standards applicable in the
relevant market.
3A. DELEGATION OF FOREIGN CUSTODY MANAGEMENT.
(a) The Fund hereby delegates to Custodian the responsibilities
set forth in subparagraph (b) below of this Section 3A, in
accordance with Rule 17f-5 with respect to foreign custody
arrangements for the Fund's existing and future investment
portfolios, except that the Custodian shall not have such
responsibility with respect to central depositories' and
clearing agencies or with respect to custody arrangements in
the countries listed on Schedule I, attached hereto, as that
Schedule may be amended from time to time by notice to the
Fund.
(b) With respect to each arrangement with any Sub-custodian
regarding the assets of any investment portfolio of the Fund
for which Custodian has responsibility under this Section 3A
(a"Foreign Custodian"), Custodian shall:
(i) determine that the Fund's assets will be subject to
reasonable care, based on the standards applicable to
custodians in the relevant market, if maintained with
the Foreign Custodian, after considering all factors
relevant to the safekeeping of such assets;
(ii) determine that the written contract with such Foreign
Custodian governing the foreign custody arrangements
complies with the requirements of Rule 17f-5 and will
provide reasonable care for the Fund's assets;
(iii) establish a system to monitor the appropriateness of
maintaining the Fund's assets with such Foreign
Custodian and the contract governing the Fund's foreign
custody arrangements;
(iv) provide to the Fund's Board of Directors, at least
annually, written reports notifying the Board of the
placement of the Fund's assets with a particular
Foreign Custodian and periodic reports of any material
changes to the Fund's foreign custodian arrangements;
and
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(v) withdraw the Fund's assets from any Foreign Custodian as
soon as reasonably practicable, if the foreign custody
arrangement no longer meets the requirement of Rule 17f-5.
4. USE OF SUB-CUSTODIANS AND SECURITIES DEPOSITORIES.
With respect to property of a Portfolio which is maintained by the
Custodian in the custody of a Sub-Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as belonging to the
particular Portfolio any property held by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of the Securities
placed in its care to be held in a foreign securities depository,
such Sub-Custodian will be required by its agreement with the
Custodian to identify on its books such Securities as being held
for the account of the Custodian as a custodian for its
customers.
(c) Any Securities held by a Sub-Custodian will be subject only to
the instructions of the Custodian or its agents; and any
Securities held in an foreign securities depository for the
account of a Sub-Custodian will be subject only to the
instructions of such Sub-Custodian.
(d) The Custodian will only deposit property of a Portfolio in an
account with a Sub-Custodian which includes exclusively the
assets held by the Custodian for its customers, and will cause
such account to be designated by such Sub-Custodian as a special
custody account for the exclusive benefit of customers of the
Custodian.
(e) Before any Securities are placed in a foreign securities
depository, the Custodian shall provide the fund's Board of
Directors with an analysis of the custody risks associated with
maintaining assets with the foreign securities depository.
(f) The Custodian or its agent shall continue to monitor the custody
risks associated with maintaining the Securities with a foreign
securities depository and shall promptly notify the Fund's Board
of Directors of any material changes in said risks.
5. COMPENSATION.
(a) The Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule C and incorporated herein. Such Fee
Schedule does not
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include out-of-pocket disbursements of the Custodian for which the
Custodian shall be entitled to xxxx separately; provided that
out-of-pocket disbursements may include only the items specified in
Schedule C.
(b) If the Fund requests that the Custodian act as Custodian for any
Portfolio hereafter established, at the time the Custodian commences
serving as such for said Portfolio, the compensation for such services
shall be reflected in a fee schedule for that Portfolio, dated and
signed by an officer of each party hereto, which shall be attached to
or otherwise reflected in Schedule C of this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule C, or replacing Schedule C with, a revised Fee
Schedule, dated and signed by an officer of each party hereto.
(d) The Custodian will xxxx the Fund for its services to each Portfolio
hereunder as soon as practicable after the end of each calendar
quarter, and said xxxxxxxx will be detailed in accordance with the Fee
Schedule for the Fund. The Fund will promptly pay to the Custodian the
amount of such billing. The Custodian shall have a claim of payment
against the property in each Portfolio for any compensation or expense
amount owing to the Custodian in connection with such Portfolio from
time to time under this Agreement.
(e) The Custodian (not the Fund) will be responsible for the payment of the
compensation of each Sub-Custodian.
6. CUSTODY OF CASH AND SECURITIES
(a) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver or cause to
be delivered to the Custodian and any Sub-Custodians all
Securities and moneys of any Portfolio at any time during the
period of this Agreement and shall specify the Portfolio to which
the Securities and moneys are to be specifically allocated. The
Custodian will not be responsible for such Securities and moneys
until actually received by it or by a Sub-Custodian. The Fund
may, from time to time in its sole discretion, provide the
Custodian with Instructions as to the manner in which and in what
amounts Securities, and moneys of a Portfolio are to be held on
behalf of such Portfolio in the Book-Entry System or a
Depository. Securities and moneys of a Portfolio held in the
Book-Entry System or a Depository will be held in accounts which
include only assets of Custodian that are held for its customers.
(b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and
maintain a separate account for each Portfolio and shall credit
to the separate account all moneys received by it or a
Sub-Custodian for the account of such Portfolio and shall
disburse, or cause a Sub-Custodian to disburse, the same only:
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1. In payment for Securities purchased for the Portfolio, as
provided in Section 7 hereof;
2. In payment of dividends or distributions with respect to the
Shares of such Portfolio, as provided in Section 11 hereof;
3. In payment of original issue or other taxes with respect to the
Shares of such Portfolio, as provided in Section 12(c) hereof;
4. In payment for Shares which have been redeemed by such Portfolio,
as provided in Section 12 hereof;
5. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as
provided in Sections 5 and 16(h) hereof;
6. Pursuant to Instructions setting forth the name of the Portfolio
and the name and address of the person to whom the payment is to
be made, the amount to be paid and the purpose for which payment
is to be made.
(c) FAIL FLOAT. In the event that any payment made for a Portfolio under
this Section 6 exceeds the funds available in that Portfolio's account,
the Custodian or relevant Sub-Custodian, as the case may be, may, in
its discretion, advance the Fund on behalf of that Portfolio an amount
equal to such excess and such advance shall be deemed an overdraft from
the Custodian or such Sub-Custodian to that Portfolio payable on
demand, bearing interest at the rate of interest customarily charged by
the Custodian or such Sub-Custodian on similar overdrafts.
(d) CONFIRMATION AND STATEMENTS. At least monthly, the Custodian shall
furnish the Fund with a detailed statement of the Securities and moneys
held by it and all Sub-Custodians for each Portfolio. Where securities
purchased for a Portfolio are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or shown on
the Custodian's account on the books of a Depository, the Book-Entry
System or a Sub-Custodian, the Custodian shall maintain such records as
are necessary to enable it to identify the quantity of those securities
held for such Portfolio. In the absence of the filing in writing with
the Custodian by the Fund of exceptions or objections to any such
statement within 60 days after the date that a material defect is
reasonably discoverable, the Fund shall be deemed to have approved such
statement; and in such case or upon written approval of the Fund of any
such statement the Custodian shall, to the extent permitted by law and
provided the Custodian has met the standard of care in Section 16
hereof; be released, relieved and discharged with respect to all
matters and things set forth in such statement as though such statement
had been settled by the decree of a court of competent jurisdiction in
an action in which the Fund and all persons having any equity interest
in the Fund were parties.
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(e) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All Securities held
for a Portfolio which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be
held by the Custodian or a Sub-Custodian in that form; all other
Securities held for a Portfolio may be registered in the name of that
Portfolio, in the name of any duly appointed registered nominee of the
Custodian or a Sub-Custodian as the Custodian or such Sub-Custodian may
from time to time determine, or in the name of the Book-Entry System or
a Depository or their successor or successors, or their nominee or
nominees. The Fund reserves the right to instruct the Custodian as to
the method of registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments to enable
the Custodian or any Sub-Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or
in the name of the Book-Entry System or a Depository, any Securities
which the Custodian of a Sub-Custodian may hold for the account of a
Portfolio and which may from time to time be registered in the name of
a Portfolio. The Custodian shall hold all such Securities specifically
allocated to a Portfolio which are not held in the Book-Entry System or
a Depository in a separate account for such Portfolio in the name of
such Portfolio physically segregated at all times from those of any
other person or persons.
(f) SEGREGATED ACCOUNTS. Upon receipt of an Instruction, the Custodian will
establish segregated accounts on behalf of a Portfolio to hold liquid
or other assets as it shall be directed by such Instruction and shall
increase or decrease the assets in such segregated accounts only as it
shall be directed by subsequent Instruction.
(g) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES. Except as
otherwise provided in an Instruction, the Custodian, by itself or
through the use of the Book-Entry System or a Depository with respect
to Securities therein maintained, shall, or shall instruct the relevant
Sub-Custodian to:
1. Collect all income due or payable with respect to Securities in
accordance with this Agreement;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or
otherwise become payable;
3. Surrender Securities in temporary form for derivative Securities;
4. Execute any necessary declarations or certificates of ownership
under the federal income tax laws or the laws or regulations of
any other taxing authority now or hereafter in effect; and
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5. Hold directly, or through the Book-Entry System or a Depository with
respect to Securities therein deposited, for the account of each
Portfolio all rights and similar Securities issued with respect to any
Securities held by the Custodian or relevant Sub-Custodian for each
Portfolio.
(h) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon receipt of an
Instruction, the Custodian, directly or through the use of the Book-Entry System
or a Depository, shall, or shall instruct the relevant Sub-Custodian to:
1. Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Instructions, proxies, consents,
authorizations, and any other instruments whereby the authority of the
Fund as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for a Portfolio in
exchange for other Securities or cash issued or paid in connection with
the liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
3. Deliver or cause to be delivered any Securities held for a Portfolio to
any protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger, consolidation
or recapitalization or sale of assets of any corporation, and receive
and hold under the terms of this Agreement in the separate account for
each such Portfolio certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such
delivery;
4. Make or cause to be made such transfers or exchanges of the assets
specifically allocated to the separate account of a Portfolio and take
such other steps as shall be stated in Written Instructions to be for
the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund;
5. Deliver Securities upon sale of such Securities for the account of a
Portfolio pursuant to Section 7;
6. Deliver Securities upon the receipt of payment in connection with any
repurchase agreement related to such Securities entered into on behalf
of a Portfolio;
7. Deliver Securities of a Portfolio to the issuer thereof or its agent
when such Securities are called, redeemed, retired or otherwise become
payable; provided, however, that in any such case the cash or other
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consideration is to be delivered to the Custodian or Sub-Custodian, as
the case may be;
8. Deliver Securities for delivery in connection with any loans of
securities made by a Portfolio but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian and the
Fund which may be in the form of cash or obligations issued by the
United States Government, its agencies or instrumentalities;
9. Deliver Securities for delivery as security in connection with any
borrowings by a Portfolio requiring a pledge of Portfolio assets, but
only against receipt of the amounts borrowed;
10. Deliver Securities to the Transfer Agent or its designee or to the
holders of Shares in connection with distributions in kind, in
satisfaction of requests by holders of Shares for repurchase or
redemption;
11. Deliver Securities for any other proper business purpose, but only upon
receipt of, in addition to written Instructions, a copy of a resolution
or other authorization of the Fund certified by the 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 business purpose, and naming the person or persons to
whom delivery of such Securities shall be made.
(i) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of a
Portfolio.
(j) EXECUTION OF REQUIRED DOCUMENTS. The Custodian is hereby authorized to
execute any and all applications or other documents required by a
regulatory agency or similar entity as a condition of making
investments in the foreign market under such entity's jurisdiction.
7. PURCHASE AND SALE OF SECURITIES.
(a) Promptly after the purchase of Securities, the Fund or its designee
shall deliver to the Custodian an Instruction specifying with respect
to each such purchase: (1) the name of the Portfolio to which such
Securities are to be specifically allocated; (2) the name of the issuer
and the title of the Securities; (3) the number of shares or the
principal amount purchased and accrued interest, if any; (4) the date
of purchase and settlement; (5) the purchase price per unit; (6) the
total amount payable upon such purchase; and (7) the name of the person
from whom or the broker through whom the purchase was made, if any. The
Custodian or specified Sub-Custodian shall receive the Securities
purchased by or for a
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Portfolio and upon receipt thereof (or upon receipt of advice from a
Depository or the Book-Entry System that the Securities have been
transferred to the Custodian's account) shall pay to the broker or
other person specified by the Fund or its designee out of the moneys
held for the account of such Portfolio the total amount payable upon
such purchase, provided that the same conforms to the total amount
payable as set forth in such Instruction.
(b) Promptly after the sale of Securities, the Fund or its designee shall
deliver to the Custodian an Instruction specifying with respect to
each such sale: (1) the name of the Portfolio to which the Securities
sold were specifically allocated; (2) the name of the issuer and the
title of the Securities; (3) the number of shares or principal amount
sold, and accrued interest, if any; (4) the date of sale; (5) the sale
price per unit; (6) the total amount payable to the Portfolio upon
such sale; and (7) the name of the broker through whom or the person
to whom the sale was made. The Custodian or relevant Sub-Custodian
shall deliver or cause to be delivered the Securities to the broker or
other person designated by the Fund upon receipt of the total amount
payable to such Portfolio upon such sale, provided that the same
conforms to the total amount payable to such Portfolio as set forth in
such Instruction. Subject to the foregoing, the Custodian or relevant
Sub-Custodian may accept payment in such form as shall be satisfactory
to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
(c) Notwithstanding (a) and (b) above, cash in any of the Portfolios may be
invested by the Custodian for short term purposes pursuant to standing
Instructions from the Fund.
8. LENDING OF SECURITIES.
If the Fund and the Custodian enter into a separate written agreement
authorizing the Custodian to lend Securities, the Custodian may lend
Securities pursuant to such agreement. Such agreement must be approved
by the Fund in the manner required by any applicable law, regulation or
administrative pronouncement, and may provide for the payment of
additional reasonable compensation to the Custodian.
9. INVESTMENT IN FUTURES AND OPTIONS
The Custodian shall pursuant to Instructions (which may be standing
instructions) (i) transfer initial margin to a safekeeping bank or,
with respect to options, broker; (ii) pay or demand variation margin
to or from a designated futures commission merchant or other broker
based on daily marking to market calculations and in accordance with
accepted industry practices; and (iii) subject to the Custodian's
consent, enter into separate procedural, safekeeping or other
agreements with safekeeping banks, futures commission merchants and
other brokers pursuant to
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which such banks and, in the case of options, brokers, will act as
custodian for initial margin deposits in transactions involving futures
contracts and options. The Custodian shall have no custodial or
investment responsibility for any assets transferred to a safekeeping
bank, futures commission merchant or broker pursuant to this paragraph.
10. PROVISIONAL CREDITS AND DEBITS.
(a) The Custodian is authorized, but shall not be obligated, to credit
the account of a Portfolio provisionally on payable date with interest,
dividends, distributions, redemptions or other amounts due. Otherwise,
such amounts will be credited to the Portfolio on the date such amounts
are actually received and reconciled to the Portfolio. In cases where
the Custodian has credited a Portfolio with such amounts prior to actual
collection and reconciliation, the Fund acknowledges that the Custodian
shall be entitled to recover any such credit on demand from the Fund and
further agrees that the Custodian may reverse such credit if and to the
extent that Custodian does not receive such amounts in the ordinary
course of business.
(b) If the Portfolio is maintained as a global custody account
it shall participate in the Custodian's contractual settlement date
processing service ("CSDP") unless the Custodian directs the Fund, or
the Fund informs the Custodian, otherwise. Pursuant to CSDP the
Custodian shall be authorized, but not obligated, to automatically
credit or debit the Portfolio provisionally on contractual settlement
date with cash or securities in connection with any sale, exchange or
purchase of securities. Otherwise, such cash or securities shall be
credited to the Portfolio on the day such cash or securities are
actually received by the Custodian and reconciled to the Portfolio. In
cases where the Custodian credits or debits the Portfolio with cash or
securities prior to actual receipt and reconciliation, the Custodian may
reverse such credit or debit as of contractual settlement date if and to
the extent that any securities delivered by the Custodian are returned
by the recipient, or if the related transaction fails to settle (or
fails, due to market change or other reasons, to settle on terms which
provide the Custodian full reimbursement of any provisional credit the
Custodian has granted) within a period of time judged reasonable by the
Custodian under the circumstances. The Fund agrees that it will not make
any claim or pursue any legal action against the Custodian for loss or
other detriment allegedly arising or resulting from the Custodian's good
faith determination to effect, not effect or reverse any provisional
credit or debit to the Portfolio.
The Fund acknowledges and agrees that funds debited from the
Portfolio on contractual settlement date including, without limitation,
funds provided for the purchase of any securities under circumstances
where settlement is delayed or otherwise does not take place in a
timely manner for any reason, shall be held pending actual settlement
of the related purchase transaction in a non-interest
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bearing deposit at the Custodian's London Branch; that such funds shall be
available for use in the Custodian's general operations; and that the
Custodian's maintenance and use of such funds in such circumstances are, without
limitation, in consideration of the Custodian's providing CSDP.
(c) The Fund recognizes that any decision to effect a provisional
credit or an advancement of the Custodian's own funds under this agreement will
be an accommodation granted entirely at the Custodian's option and in light of
the particular circumstances, which circumstances may involve conditions in
different countries, markets and classes of assets at different times. The Fund
shall make the Custodian whole for any loss which it may incur from granting
such accommodations and acknowledges that the Custodian shall be entitled to
recover any relevant amounts from the Fund on demand. All amounts thus due to
the Custodian shall be paid by the Fund from the account of the relevant
Portfolio unless otherwise paid on a timely basis and in that connection the
Fund acknowledges that the Custodian has a continuing lien on all assets of such
Portfolio to secure such payments and agrees that the Custodian may apply or set
off against such amounts any amounts credited by or due from the Custodian to
the Fund. If funds in the Portfolio are insufficient to make any such payment
the Fund shall promptly deliver to the Custodian the amount of such deficiency
in immediately available funds when and as specified by the Custodian's written
or oral notification to the Fund.
(d) In connection with the Custodian's global custody service the
Fund will maintain deposits at the Custodian's London Branch. The Fund
acknowledges and agrees that such deposits are payable only in the currency in
which an applicable deposit is denominated; that such deposits are payable only
on the Fund's demand at the Custodian's London Branch; that such deposits are
not payable at any of the Custodian's offices in the United States; and that the
Custodian will not in any manner directly or indirectly promise or guarantee any
such payment in the United States.
The Fund further acknowledges and agrees that such deposits are subject to
cross-border risk, and therefore the Custodian will have no obligation to make
payment of deposits if and to the extent that the Custodian is prevented from
doing so by reason of applicable law or regulation or any Sovereign Risk event
affecting the London Branch or the currency in which the applicable deposit is
denominated. "Sovereign Risk" for this purpose means nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the property rights of persons who are not
residents of the affected jurisdiction; or acts of war, terrorism, insurrection
or revolution; or any other act or event beyond the Custodian's control.
13
THE FUND ACKNOWLEDGES AND AGREES THAT DEPOSIT ACCOUNTS MAINTAINED AT
FOREIGN BRANCHES OF UNITED STATES BANKS (INCLUDING, IF APPLICABLE,
ACCOUNTS IN WHICH CUSTOMER FUNDS FOR THE PURCHASE OF SECURITIES ARE
HELD ON AND AFTER CONTRACTUAL SETTLEMENT DATE), ARE NOT INSURED BY THE
U.S. FEDERAL DEPOSIT INSURANCE CORPORATION; MAY NOT BE GUARANTEED BY
ANY LOCAL OR FOREIGN GOVERNMENTAL AUTHORITY; ARE UNSECURED; AND IN A
LIQUIDATION MAY BE SUBORDINATED IN PRIORITY OF PAYMENT TO DOMESTIC
(U.S.- DOMICILED) DEPOSITS. THEREFORE, BENEFICIAL OWNERS OF SUCH
FOREIGN BRANCH DEPOSITS MAY BE UNSECURED CREDITORS OF THE NORTHERN
TRUST COMPANY.
Deposit account balances that are owned by United States residents
are expected to be maintained in an aggregate amount of at least
$100,000 or the equivalent in other currencies.
11. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS.
(a) In the event that the Board of Directors of the Fund (or a committee
thereof) authorizes the declaration of dividends or distributions with
respect to a Portfolio, an Authorized Person shall provide the
Custodian with Instructions specifying the record date, the date of
payment of such distribution and the total amount payable to the
Transfer Agent or its designee on such payment date.
(b) Upon the payment date specified in such Instructions, the Custodian
shall pay the total amount payable to the Transfer Agent or its
designee out of the moneys specifically allocated to and held for the
account of the appropriate Portfolio.
12. SALE AND REDEMPTION OF SHARES.
(a) Whenever the Fund shall sell any Shares, the Fund shall deliver or
cause to be delivered to the Custodian an Instruction specifying the
name of the Portfolio whose Shares were sold and the amount to be
received by the Custodian for the sale of such Shares.
(b) Upon receipt of such amount from the Transfer Agent or its designee,
the Custodian shall credit such money to the separate account of the
Portfolio specified in the Instruction described in paragraph (a)
above.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 12, the Custodian shall pay all original
issue or other taxes required
14
to be paid in connection with such issuance upon the receipt of an
Instruction specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares are redeemed, the
Fund shall deliver or cause to be delivered to the Custodian an
Instruction specifying the name of the Portfolio whose Shares were
redeemed and the total amount to be paid for the Shares redeemed.
(e) Upon receipt of an Instruction described in paragraph (d) above, the
Custodian shall pay to the Transfer Agent (or such other person as the
Transfer Agent directs) the total amount specified in such Instruction.
Such payment shall be made from the separate account of the Portfolio
specified in such Instruction.
13. INDEBTEDNESS.
(a) The Fund or its designee will cause to be delivered to the Custodian
by any bank (excluding the Custodian) from which the Fund borrows
money, using Securities as collateral, a notice or undertaking in the
form currently employed by any such bank setting forth the amount
which such bank will loan to the Fund against delivery of a stated
amount of collateral. The Fund shall promptly deliver to the Custodian
an Instruction stating with respect to each such borrowing: (1) the
name of the Portfolio for which the borrowing is to be made; (2) the
name of the bank; (3) the amount and terms of the borrowing, which may
be set forth by incorporating by reference an attached promissory
note, duly endorsed by the Fund, or other loan agreement; (4) the time
and date, if known, on which the loan is to be entered into (the
"borrowing date"); (5) the date on which the loan becomes due and
payable; (6) the total amount payable to the Fund for the separate
account of the Portfolio on the borrowing date; (7) the market value
of Securities to be delivered as collateral for such loan, including
the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities; (8) whether the
Custodian is to deliver such collateral through the Book-Entry System
or a Depository; and (9) a statement that such loan is in conformance
with the 1940 Act and the Prospectus.
(b) Upon receipt of the Instruction referred to in paragraph (a) above,
the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery
by the lending bank of the total amount of the loan payable, provided
that the same conforms to the total amount payable as set forth in the
Instruction. The Custodian may, at the option of the lending bank,
keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the Fund from time to
time such Securities specifically allocated to such Portfolio as may
be specified in the Instruction to collateralize further any
transaction described in this Section 13. The Fund shall cause all
15
Securities released from collateral status to be returned directly to
the Custodian, and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the
Fund fails to specify in such Instruction all of the information
required by this Section 13, the Custodian shall not be under any
obligation to deliver any Securities. Collateral returned to the
Custodian shall be held hereunder as it was prior to being used as
collateral.
14. CORPORATE ACTION.
Whenever the Custodian or any Sub-Custodian receives information
concerning Securities held for a Portfolio which requires discretionary
action by the beneficial owner of the Securities (other than a proxy),
such as subscription rights, bond issues, stock repurchase plans and
rights offerings, or legal notices or other material intended to be
transmitted to Securities holders ("Corporate Actions"), the Custodian
will give the Fund or its designee notice of such Corporate Actions to
the extent that the Custodian's central corporate actions department
has actual knowledge of a Corporate Action in time to notify the Fund.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action
which bears an expiration date is received, the Custodian will endeavor
to obtain an Instruction relating to such Corporate Action from an
Authorized Person, but if such Instruction is not received in time for
the Custodian to take timely action, or actual notice of such Corporate
Action was received too late to seek such an Instruction, the Custodian
is authorized to sell, or cause a Sub-Custodian to sell, such rights
entitlement or fractional interest and to credit the applicable account
with the proceeds and to take any other action it deems, in good faith,
to be appropriate, in which case, provided it has met the standard of
care in Section 16 hereof, it shall be held harmless by the particular
Portfolio involved for any such action.
The Custodian will deliver proxies to the Fund or its designated agent
pursuant to special arrangements which may have been agreed to in
writing between the parties hereto. Such proxies shall be executed in
the appropriate nominee name relating to Securities registered in the
name of such nominee but without indicating the manner in which such
proxies are to be voted; and where bearer Securities are involved,
proxies will be delivered in accordance with an applicable Instruction,
if any.
15. PERSONS HAVING ACCESS TO THE PORTFOLIOS.
(a) Neither the Fund nor any officer, director, employee or agent of the
Fund, the Fund's investment adviser, or any sub-investment adviser,
shall have physical access to the assets of any Portfolio held by the
Custodian or any Sub-Custodian or be authorized or permitted to
withdraw any investments of a Portfolio, nor shall the Custodian or
any Sub-Custodian deliver any assets of a Portfolio to any such
16
person. No officer, director, employee or agent of the Custodian who
holds any similar position with the Fund's investment adviser, with
any sub-investment adviser of the Fund or with the Fund shall have
access to the assets of any Portfolio.
(b) Nothing in this Section 15 shall prohibit any Authorized Person from
giving Instructions to the Custodian so long as such Instructions do
not result in delivery of or access to assets of a Portfolio
prohibited by paragraph (a) of this Section 15.
(c) The Custodian represents that it maintains a system that is reasonably
designed to prevent unauthorized persons from having access to the
assets that it holds (by any means) for its customers.
16. CONCERNING THE CUSTODIAN.
(a) SCOPE OF SERVICES. The Custodian shall be obligated to perform only
such services as are set forth in this Agreement or expressly
contained in an Instruction given to the Custodian which is not
contrary to the provisions of this Agreement.
(b) STANDARD OF CARE.
1. The Custodian will use reasonable care, prudence and diligence with
respect to its obligations under this Agreement and the safekeeping of
property of the Portfolios. The Custodian shall be liable to, and
shall indemnify and hold harmless the Fund from and against any loss
which shall occur as the result of the failure of the Custodian or a
Sub-Custodian to exercise reasonable care, prudence and diligence with
respect to their respective obligations under this Agreement and the
safekeeping of such property. The determination of whether the
Custodian or Sub-Custodian has exercised reasonable care, prudence and
diligence in connection with their obligations under this Agreement
shall be made in light of prevailing standards applicable to
professional custodians in the jurisdiction in which such custodial
services are performed. In the event of any loss to the Fund by reason
of the failure of the Custodian or a Sub-Custodian to exercise
reasonable care, prudence and diligence, the Custodian shall be liable
to the Fund only to the extent of the Fund's direct damages and
expenses, which damages, for purposes of property only, shall 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 condition or circumstances.
2. The Custodian will not be responsible for any act, omission, or
default of, or for the solvency of, any central securities depository
or clearing agency.
17
3. The Custodian will not be responsible for any act, omission, or
default of, or for the solvency of, any broker or agent (not referred
to in paragraph (b)(2) above) which it or a Sub-Custodian appoints and
uses unless such appointment and use is made or done negligently or in
bad faith. In the event such an appointment and use is made or done
negligently or in bad faith, the Custodian shall be liable to the Fund
only for direct damages and expenses (determined in the manner
described in paragraph (b)(1) above) resulting from such appointment
and use and, in the case of any loss due to an act, omission or
default of such agent or broker, only to the extent that such loss
occurs as a result of the failure of the agent or broker to exercise
reasonable care ("reasonable care" for this purpose to be determined
in light of the prevailing standards applicable to agents or brokers,
as appropriate, in the jurisdiction where the services are performed).
4. The Custodian shall be entitled to rely, and may act, upon the
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
in good faith and without negligence pursuant to such advice.
5. The Custodian shall be entitled to rely upon any Instruction it
receives pursuant to the applicable Sections of this Agreement that it
reasonably believes to be genuine and to be from an Authorized Person.
In the event that the Custodian receives oral Instructions, the Fund
or its designee shall cause to be delivered to the Custodian, by the
close of business on the same day that such oral Instructions were
given to the Custodian, written Instructions confirming such oral
Instructions, whether by hand delivery, telex or otherwise. The Fund
agrees that the fact that no such confirming written Instructions are
received by the Custodian shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized
by the Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in connection with (i) acting upon oral
Instructions given to the Custodian hereunder, provided such
instructions reasonably appear to have been received from an
Authorized Person or (ii) deciding not to act solely upon oral
Instructions, provided that the Custodian first contacts the giver of
such oral Instructions and requests written confirmation immediately
following any such decision not to act.
6. The Custodian shall supply the Fund or its designee with such daily
information regarding the cash and Securities positions and activity
of each Portfolio as the Custodian and the Fund or its designee shall
from time to time agree. It is understood that such information will
not be audited by the Custodian and the Custodian represents that such
18
information will be the best information then available to the
Custodian. The Custodian shall have no responsibility whatsoever for
the pricing of Securities, accruing for income, valuing the effect of
Corporate Actions, or for the failure of the Fund or its designee to
reconcile differences between the information supplied by the Custodian
and information obtained by the Fund or its designee from other
sources, including but not limited to pricing vendors and the Fund's
investment adviser. Subject to the foregoing, to the extent that any
miscalculation by the Fund or its designee of a Portfolio's net asset
value is attributable to the willful misfeasance, bad faith or
negligence of the Custodian (including any Sub-Custodian) in supplying
or omitting to supply the Fund or its designee with information as
aforesaid, the Custodian shall be liable to the Fund for any resulting
loss (subject to such de minimis rule of change in value as the Board
of Directors may from time to time adopt).
(c) LIMIT OF DUTIES. Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by any
Portfolio, the legality of the purchase thereof, or the propriety
of the amount specified by the Fund or its designee for payment
therefor;
2. The legality of the sale of any Securities by any Portfolio or
the propriety of the amount of consideration for which the same
are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor;
5. The legality of the declaration or payment of any dividend or
distribution by the Fund; or
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the exclusive benefit
of the Fund, but hereby warrants that as of the date of this Agreement
it is maintaining a bankers Blanket Bond and hereby agrees to notify
the Fund in the event that such bond is canceled or otherwise lapses.
(e) Consistent with and without limiting the language contained in Section
16(a), it is specifically acknowledged that the Custodian shall have no
duty or responsibility to:
19
1. Question any Instruction or make any suggestions to the Fund or an
Authorized Person regarding any Instruction;
2. Supervise or make recommendations with respect to investments or
the retention of Securities;
3. Subject to Section 16(b)(3) hereof, evaluate or report to the Fund
or an Authorized Person regarding the financial condition of any
broker, agent or other party to which Securities are delivered or
payments are made pursuant to this Agreement; or
4. Review or reconcile trade confirmations received from brokers.
(f) AMOUNTS DUE FROM OR TO TRANSFER AGENT. The Custodian shall not be
under any duty or obligation to take action to effect collection of
any amount due to any Portfolio from the Transfer Agent or its
designee nor to take any action to effect payment or distribution by
the Transfer Agent or its designee of any amount paid by the Custodian
to the Transfer Agent in accordance with this Agreement.
(g) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund and specifically allocated to
a Portfolio are such as may properly be held by the Fund under the
provisions of the Articles of Incorporation and the Prospectus.
(h) INDEMNIFICATION. The Fund agrees to indemnify and hold the Custodian
harmless from all loss, cost, taxes, charges, assessments, claims, and
liabilities (including, without limitation, liabilities arising under
the Securities Act of 1933, the Securities Exchange Act of 1934 and
the 1940 Act and state or foreign securities laws) and expenses
(including reasonable attorneys fees and disbursements) arising
directly or indirectly from any action taken or omitted by the
Custodian (i) at the request or on the direction of or in reliance on
the advice of the Fund or in reasonable reliance upon the Prospectus
or (ii) upon an Instruction; provided, that the foregoing indemnity
shall not apply to any loss, cost, tax, charge, assessment, claim,
liability or expense to the extent the same is attributable to the
Custodian's or any Sub-Custodian's negligence, willful misconduct, bad
faith or reckless disregard of duties and obligations under this
Agreement or any other agreement relating to the custody of Fund
property.
(i) The Fund agrees to hold the Custodian harmless from any liability or
loss resulting from the imposition or assessment of any taxes or other
governmental charges on a Portfolio.
20
(j) Without limiting the foregoing, the Custodian shall not be liable for
any loss which results from:
1. the general risk of investing;
2. subject to Section 16(b) hereof, investing or holding property in
a particular country including, but not limited to, losses
resulting from nationalization, expropriation or other
governmental actions; regulation of the banking or securities
industry; currency restrictions, devaluations or fluctuations;
and market conditions which prevent the orderly execution of
securities transactions or affect the value of property held
pursuant to this Agreement; or
3. consequential, special or punitive damages for any act or failure
to act under any provision of this Agreement, even if advised of
the possibility thereof.
(k) FORCE MAJEURE. No party shall be liable to the other for any delay in
performance, or non- performance, of any obligation hereunder to the
extent that the same is due to forces beyond its reasonable control,
including but not limited to delays, errors or interruptions caused by
the other party or third parties, any industrial, juridical,
governmental, civil or military action, acts of terrorism, insurrection
or revolution, nuclear fusion, fission or radiation, failure or
fluctuation in electrical power, heat, light, air conditioning or
telecommunications equipment, or acts of God.
(1) INSPECTION OF BOOKS AND RECORDS. The Custodian shall create and
maintain all records relating to its activities and obligations under
this Agreement in such manner as will meet the obligations of the Fund
under the 1940 Act, with particular attention to Section 31 thereof and
Rules 31 a-1 and 31 a-2 thereunder, and under applicable federal and
state laws. All such records shall be the property of the Fund and
shall at all times during regular business hours of the Custodian be
open for inspection by duly authorized officers, employees and agents
of the Fund and by the appropriate employees of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply
the Fund with a tabulation of Securities 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.
(m) ACCOUNTING CONTROL REPORTS. The Custodian shall provide the Fund with
any report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System, each Depository, and each
Sub-Custodian and with an annual report on its own systems of internal
accounting control.
21
17. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth above
(the "Effective Date") and shall continue in effect thereafter until
terminated in accordance with Section 17(b).
(b) Either of the parties hereto may terminate this Agreement with respect
to any Portfolio by giving to the other party a notice in writing
specifying the date of such termination, which, in case the Fund is the
terminating party, shall be not less than 60 days after the date of
Custodian receives such notice or, in case the Custodian is the
terminating party, shall be not less than 90 days after the date the
Fund receives such notice. In the event such notice is given by the
Fund, it shall be accompanied by a certified resolution of the Board of
Directors, electing to terminate this Agreement with respect to any
Portfolio and designating a successor custodian or custodians.
In the event such notice is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a certified
resolution of the Board of Directors, designating a successor custodian
or custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian, which shall be a person
qualified to so act under the 0000 Xxx. If the Fund fails to designate
a successor custodian with respect to any Portfolio, the Fund shall
upon the date specified in the notice of termination of this Agreement
and upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to
the Fund) and moneys of such Portfolio, be deemed to be its own
custodian and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 17, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and moneys then held by the
Custodian and specifically allocated to the Portfolio or Portfolios
specified, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled with
respect to such Portfolio or Portfolios.
18. MISCELLANEOUS.
(a) Annexed hereto as Schedule A is a certification signed by two of
the present officers of the Fund setting forth the names of the
present Authorized Persons. The Fund agrees to furnish to the
Custodian a new certification in similar form in the event that any
such present Authorized Person ceases to be
22
such an Authorized Person or in the event that other or additional
Authorized Persons are elected or appointed. Until such new
certification is received by the Custodian, the Custodian shall be
fully protected in acting under the provisions of this Agreement upon
Instructions which Custodian reasonably believes were given by an
Authorized Person, as identified in the last delivered certification.
Unless such certification specifically limits the authority of an
Authorized Person to specific matters or requires that the approval of
another Authorized Person is required, Custodian shall be under no
duty to inquire into the right of such person, acting alone, to give
any instructions whatsoever under this Agreement.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at its address stated on the first page hereof or at such
other place as the Custodian may from time to time designate in
writing.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund, shall be sufficiently given
if addressed to the Fund and mailed or delivered to it at its offices
at its address shown on the first page hereof or at such other place
as the Fund may from time to time designate in writing.
(d) Except as expressly provided herein, Agreement may not be amended
or modified in any manner except by a written agreement executed by
both parties with the same formality as this Agreement.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of the Fund, and any attempted assignment
without such written consent shall be null and void.
(f) This Agreement shall be construed in accordance with the laws of
the State of Illinois.
(g) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
23
[FOR MASS. BUSINESS TRUSTS:
(i) The Fund and the Custodian agree that the
obligations of the Fund under this Agreement shall not
be binding upon or any member of the Board of Directors
or any shareholder, nominee, officer, employee or agent,
whether past, present or future, of the Fund
individually, but are binding only upon the assets and
property of the Fund or of the appropriate Portfolio(s)
thereof. The execution and delivery of this Agreement
have been duly authorized by Fund and signed by an
authorized officer of the Fund, acting as such, but
neither such authorization by the Fund nor such
execution and delivery by such officer shall be deemed
to have been made by any member of the Board of
Directors or by any officer or shareholder of the Fund
individually or to impose any liability on any of them
personally, but shall bind only the assets and property
of the Fund or of the appropriate Portfolio(s) thereof.]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their respective
representatives duly authorized as of the day and year first
above written.
US ALLIANZ VARIABLE INSURANCE
PRODUCTS TRUST
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: VP
The undersigned, Xxxxxx Xxxxxx, does hereby certify that he/she
is the duly elected, Assistant Secretary of US Allianz Variable
Insurance Products Trust (the "Fund") and further certifies that
the person whose signature appears above is a duly elected,
qualified and acting officer of the Fund with full power and
authority to execute this Custody Agreement on behalf of the Fund
and to take such other actions and execute such other documents
as may be necessary to effectuate this Agreement.
/s/ Xxxxxx Xxxxxx
Assistant Secretary
US Allianz Variable Insurance Products Trust
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxxxxx X. Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
24
SCHEDULE I
(COUNTRIES FOR WHICH CUSTODIAN SHALL NOT HAVE
RESPONSIBILITY UNDER SECTION 3A FOR
MANAGING FOREIGN CUSTODY ARRANGEMENTS)
Russia
Lithuania
Romania
Croatia
Nigeria
Palestinian Autonomous Area
Ukraine
Vietnam
A GLOBAL CUSTODY FEE SCHEDULE FOR
USAllianz VIP Funds & Allianz Variable Annuity Funds
ACCOUNT-BASED FEES
Base charge per securities portfolio $4,000 per annum
ASSET-BASED FEES Tier I
United States 0.75 basis points
Tier II Australia, Belgium, Canada, Denmark, Euroclear, France, 3.0 basis points
Germany, Ireland, Italy, Japan, Luxembourg, Malaysia, Netherlands, New Zealand, Sweden and United Kingdom
Tier Ill Austria, Hong Kong, Norway, Singapore, South Korea, 9.0 basis
Spain, Switzerland, Taiwan and Thailand points
Tier IV Argentina, China, Finland, Mexico, Portugal, Sri Lanka,
South Africa and Turkey 20.0 basis points
Tier V Bahrain, Bangladesh, Botswana, Brazil, Cote d'lvoire, 40.0 basis points
Chile, Colombia, Cyprus, Czech Rep., Ecuador, Egypt, Estonia, Ghana, Greece, Hungary, India, Indonesia,
Israel, Jamaica, Jordan, Kenya, Latvia, Mauritius, Morocco, Namibia, Nigeria, Oman, Pakistan, Peru,
Philippines, Poland, Romania, Russia, Slovenia, Xxxxxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxxxxx,
Xxxxxx and Zimbabwe
TRANSACTION-BASED FEES
Tier l $ 5 per
Tier II $ 35 per
Tier III $ 65 per
Tier IV $ 95 per
Tier V $150 per
Future/option transaction (roundtrip) $ 35 per
Third-party payments and fixed deposits outside Northern Trust $ 35 per
Wire transfers and Xxxx to Markets $ 4 per
Short-term settlements $ 15 per
OUT OF POCKET EXPENSES
Costs relating but not limited to stamp duty, security re-registration
or other fees resulting from participation in a particular market will
be passed through if and as applicable.
QUARTERLY MINIMUM
A quarterly minimum custody fee of $12,500 applies or the quoted fee
schedule, whichever is greater.
DESKTOP SERVICES
Full access to Northern Trust's on-line customized reporting system,
Passport(R), will be made available for an annual charge of $5,000.
Training on the software is included in the above charge assuming that
training is done in one location. Any telecommunication charges
incurred by Northern in supporting Passport would be passed through at
cost where applicable.
Any investment advisors retained by the client will be provided access
to our on-line reporting free of charge for information pertaining to
relevant portfolios.
Technology consulting services are offered for $150 per hour.
SECURITIES LENDING
Northern Trust has an extensive securities lending program.
Historically we have been very successful in offsetting significant
portions or all of client custody fees through lending activity. We
would be happy to provide an evaluation of revenue potential, if
desired.
RISK & PERFORMANCE SERVICES
As the largest Bank provider of Performance Services, Northern Trust
has an array of products available to assist in managing risk as well
as analyzing performance. If this value-added service is of interest,
we would be happy to provide a proposal.
Alerts, Northern Trust's risk and policy monitoring application, would
be made available via Passport(R) for an annual charge of $25,000.
MATERIAL CHANGES
The fees quoted above are offered contingent upon the information
provided and assume that actual experience will not be materially
different from projected activity. "Material" changes, for the purposes
of this provision, will be changes in excess of 10% from the
assumptions used.
TERMS OF PROPOSAL
Fees will be calculated and debited to the account quarterly. The
assumptions used in the new model will be as follows:
o 25 funds/portfolio
o 60 -- 150 U.S. equity security holdings
o 50 - 175% security turnover per annum Approximately 0% excess
cash invested with Northern
o Bisys to provide fund accounting, administration, and transfer
agency services
ACCEPTED BY
XXXXXXX XXXXX XXXXXXXXX X. XXXXX
--------------- ------------------
USAllianz The Northern Trust Company
VP VICE PRESIDENT
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Title Title
______________ 5-17-02
-----------------
Date Date
NEW VIP FUNDS(AS OF 5/01/02)
USAZ AIM BASIC VALUE FUND
USAZ AIM BLUE CHIP FUND
USAZ AIM DENT DEMOGRAPHIC TRENDS FUND
USAZ AIM INTERNATIONAL EQUITY FUND
USAZ XXXXXXXXXXX EMERGING GROWTH FUND
NEW VIP FUNDS(AS OF 11/05/01)
USAZ XXXXXXXXX DEVELOPED MARKETS FUND
USAZ ALLIANCE CAPITAL TECHNOLOGY FUND
USAZ ALLIANCE CAPITAL LARGE CAP GROWTH FUND
USAZ PIMCO RENAISSANCE FUND
USAZ PIMCO VALUE FUND
USAZ PIMCO GROWTH AND INCOME FUND
USAZ ALLIANCE CAPITAL GROWTH AND INCOME FUND
Existing VIP Funds- New Names
USAZ XXX XXXXXX AGGRESSIVE GROWTH FUND
USAZ XXX XXXXXX STRATEGIC GROWTH FUND
AZOA GLOBAL OPPORTUNITIES FUND
USAZ XXX XXXXXX GROWTH FUND
AZOA GROWTH FUND
USAZ XXX XXXXXX EMERGING GROWTH FUND
USAZ XXX XXXXXX XXXXXXXX FUND
USAZ XXX XXXXXX GROWTH AND INCOME FUND
AZOA DIVERSIFIED ASSETS FUND
AZOA FIXED INCOME FUND
USAZ MONEY MARKET FUND
