Exhibit 2(j)
CUSTODY AGREEMENT
This CUSTODY AGREEMENT (this "Agreement") is made as of this 15th day of
December, 2000, by and between STATE STREET BANK AND TRUST COMPANY, a trust
company chartered under the laws of the Commonwealth of Massachusetts, having
its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 ("Custodian"), and ING PILGRIM SENIOR INCOME FUND, a Delaware business
trust, having its principal office and place of business at 0000 X. Xxxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx, XX, 00000-0000 ("Fund").
WHEREAS, Fund desires to appoint State Street Bank and Trust Company as
Custodian of the Fund; and
WHEREAS, State Street Bank and Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian as
custodian of the Assets (as defined below) at any time owned by the Fund.
For purposes of this Agreement, the term "Assets" shall mean investment
securities, interests in loans and other non-cash investment property, and
cash.
2. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. DELIVERY OF ASSETS. Except as permitted by the Investment Company Act
of 1940, Fund will deliver or cause to be delivered to Custodian all
Assets acquired and owned by it during the time this Agreement shall
continue in effect, including all documentation required by Fund to be
delivered to Custodian relating to or evidencing the interests in
loans acquired by the Fund. Custodian shall have no responsibility or
liability whatsoever for or on account of Assets or loan documents not
so delivered. All Assets so delivered to Custodian (other than bearer
securities) shall be registered in the name of Fund or its nominee, or
of a nominee of Custodian, or shall be properly endorsed and in form
for transfer satisfactory to Custodian.
B. DELIVERY OF ACCOUNTS AND RECORDS. Fund shall turn over to Custodian
all of the Fund's relevant accounts and records previously maintained
by it. Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund, and Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of Fund to
provide any portion of such or to provide in a timely manner any other
information needed by the Custodian knowledgeably to perform its
function hereunder.
C. DELIVERY OF ASSETS TO THIRD PARTIES. Custodian will receive delivery
of and keep safely the Assets of Fund delivered to it from time to
time segregated in a separate account. Custodian will not deliver,
assign, pledge or hypothecate any such Assets to any person except as
permitted by the provisions of this Agreement or any agreement
executed by it according to the terms of Section 2.S. of this
Agreement. Upon delivery of any such Assets to a subcustodian pursuant
to Section 2.S. of this agreement, Custodian will create and maintain
records identifying those Assets which have been delivered to the
subcustodian as belonging to the Fund. The Custodian is responsible
for the securities and monies of Fund only until they have been
transmitted to and received by other persons as permitted under the
terms of this Agreement, except for securities and monies transmitted
to subcustodians appointed under Section 2.S. of this Agreement, for
which Custodian remains responsible to the extent provided in Section
2.S. of this Agreement. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System or Participant Trust
Company (PTC) or other depository approved by the Fund (as such
entities are defined at 17 CFR Section 270.17f-4(b)) (each a
"Depository" and collectively the "Depositories").
D. REGISTRATION OF SECURITIES. The Custodian shall at all times hold
registered securities of the Fund in the name of the Custodian, the
Fund, or a nominee of either of them, unless specifically directed by
instructions to hold such registered securities in so-called "street
name," provided that, in any event, all such securities and other
Assets shall be held in an account of the Custodian containing only
Assets of the Fund, or only Assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian at all times shall indicate the Fund or other
customer for which such securities and other Assets are held in such
account and the respective interests therein. If, however, the Fund
directs the Custodian to maintain securities in "street name",
notwithstanding anything contained herein to the contrary, the
Custodian shall be obligated only to utilize its best efforts to
timely collect income due the Fund on such securities and to notify
the Fund of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers. All Assets,
and the ownership thereof by Fund, which are held by Custodian
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hereunder, however, shall at all times be identifiable on the records
of the Custodian. The Fund agrees to hold Custodian and its nominee
harmless for any liability as a record holder of securities held in
custody.
E. EXCHANGE OF ASSETS. Upon receipt of instructions as defined herein in
Section 3.A, Custodian will exchange, or cause to be exchanged, Assets
held by it for the account of Fund for other Assets issued or paid in
connection with any reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, conversion,
refinancing or otherwise, and will deposit any such Assets in
accordance with the terms of any reorganization or protective plan.
Without instructions, Custodian is authorized to exchange securities
held by it in temporary form for securities in definitive form, to
effect an exchange of shares when the par value of the stock is
changed, and upon receiving payment therefor, to surrender Assets held
by it at maturity or when advised of earlier call for redemption,
except that Custodian shall receive instructions prior to surrendering
any convertible security.
F. PURCHASES OF INVESTMENTS OF THE FUND. Fund will, on each business day
on which a purchase of Assets shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase:
1. The name of the issuer and description of the Asset;
2. The number of shares or the principal amount purchased, and
accrued interest, if any;
3. The trade date;
4. The settlement date;
5. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
6. The total amount payable upon such purchase; and
7. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of Fund, but only insofar as monies are
available therein for such purpose, and receive the Assets so
purchased by or for the account of Fund except that Custodian may in
its sole discretion advance funds to the Fund which may result in an
overdraft because the monies held by the Custodian on behalf of the
Fund are insufficient to pay the total amount payable upon such
purchase. Except as otherwise instructed by Fund, such payment shall
be made by the Custodian only upon receipt of Assets: (a) by the
Custodian; (b) by a clearing corporation of a national exchange of
which the Custodian is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) in the case of a repurchase
agreement, the Custodian may release funds to a Depository prior to
the receipt of advice from the Depository that the securities
underlying such repurchase agreement have been transferred by
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book-entry into the account maintained with such Depository by the
Custodian, on behalf of its customers, provided that the Custodian's
instructions to the Depository require that the Depository make
payment of such funds only upon transfer by book-entry of the
securities underlying the repurchase agreement in such account; (ii)
in the case of time deposits, call account deposits, currency deposits
and other deposits, foreign exchange transactions, futures contracts
or options, the Custodian may make payment therefor before receipt of
an advice or confirmation evidencing said deposit or entry into such
transaction; (iii) in the case of the purchase of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make, or cause a subcustodian appointed pursuant to
Section 2.S.2. of this Agreement to make, payment therefor in
accordance with generally accepted local custom and market practice;
and (iv) in the case of interests in loans, Custodian shall make
payment therefor and additional advances relating thereto at such
times and to such parties as instructed by Fund without regard to the
time of delivery to Custodian of documentation evidencing the Fund's
interest in the loan or the additional advance, as applicable.
G. SALES AND DELIVERIES OF INVESTMENTS OF THE FUND - OTHER THAN OPTIONS
AND FUTURES Fund will, on each business day on which a sale of Assets
of Fund has been made, deliver to Custodian instructions specifying
with respect to each such sale:
1. The name of the issuer and description of the Assets;
2. The number of shares or principal amount sold, and accrued
interest, if any;
3. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
4. The trade date;
5. The settlement date;
6. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
7. The total amount to be received by Fund upon such sale; and
8. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the Assets thus designated as sold for the account of
Fund to the broker or other person specified in the instructions
relating to such sale. Except as otherwise instructed by Fund, such
delivery shall be made upon receipt of payment therefor: (a) in such
form as is satisfactory to the Custodian; (b) credit to the account of
the Custodian with a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) credit to the
account of the Custodian, on behalf of its customers, with a
Depository. Notwithstanding the foregoing: (i) in the case of
securities held in physical form, such securities shall be delivered
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in accordance with "street delivery custom" to a broker or its
clearing agent; (ii) in the case of the sale of securities, the
settlement of which occurs outside of the United States of America,
the Custodian may make, or cause a subcustodian appointed pursuant to
Section 2.S.2. of this Agreement to make, payment therefor in
accordance with generally accepted local custom and market practice;
and (iii) in the case of the sale of an interest in a loan, the
Custodian shall receive the purchase price for the account of Fund and
deliver the loan documents relating to the interest sold as instructed
by Fund.
H. PURCHASES OR SALES OF SECURITY OPTIONS, OPTIONS ON INDICES AND
SECURITY INDEX FUTURES Contracts. Fund will, on each business day on
which a purchase or sale of the following options and/or futures shall
be made by it, deliver to Custodian instructions which shall specify
with respect to each such purchase or sale:
1. Security Options
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring
or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded;
j. Name and address of the broker or dealer through whom the
sale or purchase was made.
2. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring
or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name and address of the broker or dealer through whom
the sale or purchase was made, or other applicable
settlement instructions.
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3. Security Index Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
b. The index level on the date the contract is entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
instructions, and if not already in the possession of
Custodian, Fund shall deliver a substantially complete and
executed custodial safekeeping account and procedural
agreement which shall be incorporated by reference into this
Custody Agreement); and
f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
4. Option on Index Future Contracts
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. SECURITIES PLEDGED OR LOANED. If specifically allowed for in the
prospectus of Fund:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in such instructions by way of pledge or hypothecation to secure
any loan incurred by Fund; provided, however, that the securities
shall be released only upon payment to Custodian of the monies
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, further securities
may be released or caused to be released for that purpose upon
receipt of instructions. Upon receipt of instructions, Custodian
will pay, but only from funds available for such purpose, any
such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing such loan.
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2. Upon receipt of instructions, Custodian will release securities
held in custody to the borrower designated in such instructions;
provided, however, that the securities will be released only upon
deposit with Custodian of full cash collateral as specified in
such instructions, and that Fund will retain the right to any
dividends, interest or distribution on such loaned securities.
Upon receipt of instructions and the loaned securities, Custodian
will release the cash collateral to the borrower.
J. ROUTINE MATTERS. Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with Assets of
Fund except as may be otherwise provided in this Agreement or directed
from time to time by the Fund in writing.
K. DEPOSIT ACCOUNT. Custodian will open and maintain on behalf of the
Fund one or more special purpose deposit accounts in the name of
Custodian ("Accounts"), subject only to draft or order by Custodian
upon receipt of instructions. All monies received by Custodian from or
for the account of Fund shall be deposited in said Accounts. Barring
events not in the control of the Custodian such as strikes, lockouts
or labor disputes, riots, war or equipment or transmission failure or
damage, fire, flood, earthquake or other natural disaster, action or
inaction of governmental authority or other causes beyond its control,
at 9:00 a.m., Kansas City time, on the second business day after
deposit of any check into Fund's Account, Custodian agrees to make Fed
Funds available to the Fund in the amount of the check. Deposits made
by Federal Reserve wire will be available to the Fund immediately and
ACH wires will be available to the Fund on the next business day.
Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held hereunder
to which each Account shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis
all income and other payments with respect to bearer domestic
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or its agent thereof and shall credit such
income, as collected, to such Account's custodian account. The
Custodian will be entitled to reverse any credited amounts where
credits have been made and monies are not finally collected. If monies
are collected after such reversal, the Custodian will credit Fund in
that amount. Custodian may open and maintain Accounts in such banks or
trust companies as may be designated by it or by properly authorized
resolution of the governing Board of the Fund, such Accounts, however,
to be in the name of Custodian and subject only to its draft or order.
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L. INCOME AND OTHER PAYMENTS TO FUND. Custodian will:
1. Collect, claim and receive and deposit for the account of Fund
all income and other payments which become due and payable on or
after the effective date of this Agreement with respect to the
Assets held under this Agreement, and credit the account of Fund
in accordance with the Section 2.K. hereof. If for any reason,
the Fund is credited with income that is not subsequently
collected, Custodian may reverse that credited amount;
2. Execute ownership and other certificates and affidavits for all
federal, state and local tax purposes in connection with the
collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with:
a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
1. all coupons and other income items requiring
presentation; and
2. all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which the Custodian has actual knowledge, or
should reasonably be expected to have knowledge; and
b. the endorsement for collection, in the name of Fund, of all
checks, drafts or other negotiable instruments.
Custodian, however, will not be required to institute suit or
take other extraordinary action to enforce collection except upon
receipt of instructions and upon being indemnified to its
satisfaction against the costs and expenses of such suit or other
actions. Custodian will receive, claim and collect all stock
dividends, rights and other similar items and will deal with the
same pursuant to instructions.
M. PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS. On the declaration of
any dividend or other distribution on the shares of the Fund ("Fund
Shares") by the governing Board of the Fund, Fund shall deliver to
Custodian instructions with respect thereto. On the date specified in
such instructions for the payment of such dividend or other
distribution, Custodian will pay out of the monies held for the
account of Fund, insofar as the same shall be available for such
purposes, and credit to the account of the Dividend Disbursing Agent
for Fund, such amount as may be specified in such instructions.
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N. SHARES OF FUND PURCHASED BY FUND. Whenever any Fund Shares are
repurchased or redeemed by Fund, Fund or its agent shall advise
Custodian of the aggregate dollar amount to be paid for such shares
and shall confirm such advice in writing. Upon receipt of such advice,
Custodian shall charge such aggregate dollar amount to the account of
Fund and either deposit the same in the account maintained for the
purpose of paying for the repurchase or redemption of Fund Shares or
deliver the same in accordance with such advice. Custodian shall not
have any duty or responsibility to determine that Fund Shares have
been removed from the proper shareholder account or accounts or that
the proper number of such shares have been cancelled and removed from
the shareholder records.
O. SHARES OF FUND PURCHASED FROM FUND. Whenever Fund Shares are purchased
from Fund, Fund will deposit or cause to be deposited with Custodian
the amount received for such shares. Custodian shall not have any duty
or responsibility to determine that Fund Shares purchased from Fund
have been added to the proper shareholder account or accounts or that
the proper number of such shares have been added to the shareholder
records.
P. PROXIES AND NOTICES. Custodian will promptly deliver or mail or have
delivered or mailed to Fund all proxies properly signed, all notices
of meetings, all proxy statements, all payment and rate notices and
other notices, requests or announcements affecting or relating to
Assets held by Custodian for Fund and will, upon receipt of
instructions, execute and deliver or cause its nominee to execute and
deliver or mail or have delivered or mailed such proxies or other
authorizations as may be required. Except as provided by this
Agreement or pursuant to instructions hereafter received by Custodian,
neither it nor its nominee will exercise any power inherent in any
Assets, including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of Assets,
or give any consent, approval or waiver with respect thereto, or take
any other similar action.
Q. DISBURSEMENTS. Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and other obligations
of Fund (including but not limited to obligations in connection with
the conversion, exchange or surrender of Assets owned by Fund,
interest charges, dividend disbursements, taxes, management fees,
custodian fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other operating
expenses of Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
R. DAILY STATEMENT OF ACCOUNTS. Custodian will, within a reasonable time,
render to Fund as of the close of business on each day, a detailed
statement of the amounts received or paid and of Assets received or
delivered for the account of Fund during said day. Custodian will,
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from time to time, upon request by Fund, render a detailed statement
of the Assets held for Fund under this Agreement, and Custodian will
maintain such books and records as are necessary to enable it to do so
and will permit such persons as are authorized by Fund, including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, will
permit federal and state regulatory agencies to examine the
securities, books and records. Upon the written instructions of Fund,
Custodian will instruct any subcustodian to give such persons as are
authorized by Fund, including Fund's independent public accountants,
access to such records or confirmation of the contents of such
records; and if demanded, to permit federal and state regulatory
agencies to examine the books, records and securities held by any
subcustodian which relate to Fund.
S. APPOINTMENT OF SUBCUSTODIANS
1. Notwithstanding any other provisions of this Agreement, all or
any of the Assets of Fund may be held in Custodian's own custody
or in the custody of one or more other banks or trust companies
selected by Custodian. Any such subcustodian must have the
qualifications required for custodian under the Investment
Company Act of 1940, as amended. Any such subcustodians may
participate directly or indirectly in any Depository. Custodian
shall be responsible to the Fund for any loss, damage or expense
suffered or incurred by the Fund resulting from the actions or
omissions of any subcustodian selected and appointed by Custodian
(except subcustodians appointed at the request of Fund and as
provided in Subsection 2 below) to the same extent Custodian
would be responsible to the Fund under Section 4 of this
Agreement if it committed the act or omission itself. Custodian
is not responsible for Depositories except to the extent such
entities are responsible to Custodian. Upon request of the Fund,
Custodian shall be willing to contract with other subcustodians
reasonably acceptable to the Custodian for purposes of (i)
effecting third-party repurchase transactions with banks,
brokers, dealers, or other entities through the use of a common
custodian or subcustodian, or (ii) providing depository and
clearing agency services with respect to certain variable rate
demand note securities, or (iii) for other reasonable purposes
specified by Fund; provided, however, that the Custodian shall be
responsible to the Fund for any loss, damage or expense suffered
or incurred by the Fund resulting from the actions or omissions
of any such subcustodian only to the same extent such
subcustodian is responsible to the Custodian. The Fund shall be
entitled to review the Custodian's contracts with any such
subcustodians appointed at the request of Fund.
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2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash or cash
equivalents, in amounts deemed by the Fund to be reasonably
necessary to effect Fund's foreign securities transactions, may
be held in the custody of one or more banks or trust companies
acting as subcustodians, according to Section 2.S.1; and
thereafter, pursuant to a written contract or contracts as
approved by Fund's governing Board, may be transferred to an
account maintained by such subcustodian with an eligible foreign
custodian, as defined in Rule 17f-5(c)(2), provided that any such
arrangement involving a foreign custodian shall be in accordance
with the provisions of Rule 17f-5 under the Investment Company
Act of 1940 as that Rule may be amended from time to time. The
Custodian shall be responsible for the monies and securities of
Fund held by eligible foreign subcustodians to the extent the
eligible foreign subcustodians are liable to the domestic
subcustodian with which the Custodian contracts for foreign
subcustody purposes.
T. ADOPTION OF PROCEDURES. Custodian and Fund may from time to time adopt
procedures as they agree upon, and Custodian may conclusively assume
that no procedure approved by Fund, or directed by Fund, conflicts
with or violates any requirements of its prospectus, declaration of
trust, bylaws, or any rule or regulation of any regulatory body or
governmental agency. Fund will be responsible to notify Custodian of
any changes in statutes, regulations, rules or policies which might
necessitate changes in Custodian's responsibilities or procedures.
U. OVERDRAFTS. In the event Custodian or any subcustodian shall, in its
sole discretion, advance cash or securities for any purpose (including
but not limited to loan advances, securities settlements, purchase or
sale of foreign exchange or foreign exchange contracts and assumed
settlement) for the benefit of Fund, the advance shall be payable by
the Fund on demand. Any such cash advance shall be subject to an
overdraft charge at the rate set forth in the then-current fee
schedule from the date advanced until the date repaid. As security for
each such advance, Fund hereby grants Custodian and such subcustodian
a lien on and security interest in all property at any time held for
the account of Fund, including without limitation all Assets acquired
with the amount advanced. Should the Fund fail to repay the advance
within a reasonable time after written notice from Custodian, the
Custodian and such subcustodian shall be entitled to utilize available
cash and to dispose of Assets pursuant to applicable law to the extent
necessary to obtain reimbursement of the amount advanced and any
related overdraft charges.
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V. EXERCISE OF RIGHTS; TENDER OFFERS. Upon receipt of instructions, the
Custodian shall: (a) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that
the new securities, cash or other assets, if any, are to be delivered
to the Custodian; and (b) deposit securities upon invitations for
tenders thereof, provided that the consideration for such securities
is to be paid or delivered to the Custodian or the tendered securities
are to be returned to the Custodian.
W. REVIEW AND REPORTING ON LOAN DOCUMENTS. Upon receipt of the loan
documents for a purchased interest in a commercial loan, Custodian
shall verify that the face dollar amount of the Fund's interest in the
loan as set forth on such loan documents is equal to the face dollar
amount of such interest as set forth on the Fund's instructions to
Custodian with respect to such purchase. Custodian shall notify the
Fund of any discrepancies and the Fund shall be responsible for
resolving the discrepancies. Custodian shall maintain a record of all
loan documents in its possession and will provide a report thereof to
the Fund monthly, or upon the Fund's request.
3. INSTRUCTIONS.
A. The term "instructions," as used herein, means written (including
telecopied) or oral instructions to Custodian which Custodian
reasonably believes were given by a designated representative of Fund.
Fund shall provide Custodian, as often as necessary, written
instructions naming one or more designated representatives to give
instructions in the name and on behalf of Fund, which instructions may
be received and accepted from time to time by Custodian as conclusive
evidence of the authority of any designated representative to act for
Fund and may be considered to be in full force and effect (and
Custodian will be fully protected in acting in reliance thereon) until
receipt by Custodian of notice to the contrary. Unless such written
instructions delegating authority to any person to give instructions
specifically limit such authority or require that the approval of
anyone else will first have been obtained, Custodian will be under no
obligation to inquire into the right of the person giving such
instructions to do so. Notwithstanding any of the foregoing provisions
of this Section 3, no authorizations or instructions received by
Custodian from Fund will be deemed to authorize or permit any
director, trustee, officer, employee, or agent of Fund to withdraw any
of the Assets of Fund upon the mere receipt of such authorization or
instructions from such director, trustee, officer, employee or agent
other than a designated representative.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgment if required at the discretion of
Custodian) of the instructions of a designated representative of Fund
will undertake to deliver for Fund's account monies (provided such
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monies are on hand or available) in connection with Fund's
transactions and to wire transfer such monies to such broker, dealer,
subcustodian, bank or other agent specified in such instructions by a
designated representative of Fund.
B. No later than the next business day immediately following each oral
instruction, Fund will send Custodian written confirmation of such
oral instruction. At Custodian's sole discretion, Custodian may record
on tape, or otherwise, any oral instruction whether given in person or
via telephone, each such recording identifying the date and the time
of the beginning and ending of such oral instruction.
C. If Custodian provides Fund, and/or its designated investment advisors,
consultants or other third parties authorized by Custodian who agree
to abide by the terms of this Agreement ("Authorized Designees") with
access to proprietary accounting and other systems (the "System") on a
remote basis for the purpose of obtaining and analyzing reports and
information (the "Remote Access Services"), the following provisions
shall apply:
In the absence of any other written agreement, the term "System" shall
include, and this Agreement shall govern, the Fund's access to and use
of any additional System made available by Custodian and/or accessed
by the Fund.
Fund agrees to comply, and to cause its Authorized Designees to
comply, with remote access operating standards and procedures and with
user identification or other password control requirements and other
security procedures as may be issued from time to time by Custodian
for use of the System and access to the Remote Access Services. Fund
agrees to advise Custodian immediately in the event that it learns or
has reason to believe that any person to whom Fund has given access to
the System or the Remote Access Services has violated or intends to
violate the terms of this Agreement and will cooperate with Custodian
in seeking injunctive or other equitable relief. Fund agrees to
discontinue use of the System and Remote Access Services, if
requested, for any security reasons cited by Custodian.
The System and Remote Access Services described herein and the
databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems, software,
knowhow, algorithms, programs, training aids, printed materials,
methods, books, records, files, documentation and other information
made available to Fund by Custodian as part of the Remote Access
Services and through the use of the System and all copyrights,
patents, trade secrets and other proprietary rights of Custodian
related thereto are the exclusive, valuable and confidential property
of Custodian and its relevant licensors (the "Proprietary
Information"). Fund agrees on its behalf and on behalf of its
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Authorized Designees to keep the Proprietary Information confidential
and to limit access to its employees and Authorized Designees (under a
similar duty of confidentiality) who require access to the System for
the purposes intended. In the event of termination of this Agreement,
Fund will return to Custodian all copies of documentation and other
Proprietary Information in its possession or in the possession of its
Authorized Designees. The foregoing shall not apply to Proprietary
Information in the public domain or required by law to be made public.
Fund agrees to use the Remote Access Services only in connection with
the proper purposes of this Agreement. Fund will not, and will cause
its employees and Authorized Designees not to, (i) permit any third
party to use the System or the Remote Access Services, (ii) sell,
rent, license or otherwise use the System or the Remote Access
Services in the operation of a service bureau or for any purpose other
than as expressly authorized under this Agreement, (iii) use the
System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of Custodian, or
(iv) allow or cause any information transmitted from Custodian's
databases, including data from third party sources, available through
use of the System or the Remote Access Services, to be redistributed
or retransmitted for other than use for or on behalf of Fund, as
Custodian's Customer.
Fund will not, and will cause its employees and Authorized Designees
not to, modify the System in any way, enhance or otherwise create
derivative works based upon the System, nor will Fund or its
Authorized Designees reverse engineer, decompile or otherwise attempt
to secure the source code for all or any part of the System.
Fund acknowledges that the disclosure of any Proprietary Information,
or of any information which at law or equity ought to remain
confidential, will immediately give rise to continuing irreparable
injury to Custodian inadequately compensable in damages at law and
that Custodian shall be entitled to obtain immediate injunctive relief
against the breach or threatened breach of any of the foregoing
undertakings, in addition to any other legal remedies which may be
available.
Custodian represents and warrants that it is the owner of and has the
right to grant access to the System and to provide the Remote Access
Services contemplated herein. Because of the nature of computer
information technology and the necessity of relying upon third party
sources, and data and pricing information obtained from third parties,
the System and Remote Access Services are provided "AS IS", and Fund
and its Authorized Designees shall be solely responsible for the
investment decisions, regulatory reports and statements produced using
the Remote Access Services. Custodian and its relevant licensors will
not be liable to Fund or its Authorized Designees for any direct or
indirect, special, incidental, punitive or consequential damages
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arising out of or in any way connected with the System or the Remote
Access Services, nor shall either party be responsible for delays or
nonperformance under this Agreement arising out of any cause or event
beyond such party's control.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, CUSTODIAN FOR ITSELF
AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES
CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER,
WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Custodian will defend or, at its option, settle any claim or action
brought against Fund to the extent that it is based upon an assertion
that access to the System or use of the Remote Access Services by Fund
under this Agreement constitutes direct infringement of any United
States patent or copyright or misappropriation of a trade secret,
provided that Fund notifies Custodian promptly in writing of any such
claim or proceeding and cooperates with Custodian in the defense of
such claim or proceeding. Should the System or the Remote Access
Services or any part thereof become, or in Custodian's opinion be
likely to become, the subject of a claim of infringement or the like
under the patent or copyright or trade secret laws of the United
States, Custodian shall have the right, at Custodian's sole option, to
(i) procure for Fund the right to continue using the System or the
Remote Access Services, (ii) replace or modify the System or the
Remote Access Services so that the System or the Remote Access
Services becomes noninfringing, or (iii) terminate the Remote Access
Services without further obligation.
4. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall at all times use reasonable care and due diligence and
act in good faith in performing its duties under this Agreement.
Custodian shall not be responsible for, and the Fund shall indemnify
and hold Custodian harmless from and against, any loss or liability
arising out of actions taken by Custodian pursuant to this Agreement
or any instructions provided to it hereunder, provided that Custodian
has acted in good faith and with due diligence and reasonable care.
Neither party shall be liable to the other for consequential, special
or punitive damages. Custodian may request and obtain the advice and
opinion of counsel for Fund, or of its own counsel with respect to
15
questions or matters of law, and it shall be without liability to Fund
for any action taken or omitted by it in good faith, in conformity
with such advice or opinion. If Custodian reasonably believes that it
could not prudently act according to the instructions of the Fund or
the Fund's counsel, it may in its discretion, with notice to the Fund,
not act according to such instructions.
B. Custodian may rely upon the advice and statements of Fund and Fund's
accountants and other persons believed by it, in good faith, to be
expert in matters upon which they are consulted, and Custodian shall
not be liable for any actions taken, in good faith, upon such advice
and statements.
C. If Fund requests Custodian in any capacity to take, with respect to
any Assets, any action which involves the payment of money by it, or
which in Custodian's opinion might make it or its nominee liable for
payment of monies or in any other way, Custodian, upon notice to Fund
given prior to such actions, shall be and be kept indemnified by Fund
in an amount and form satisfactory to Custodian against any liability
on account of such action; provided, however, that nothing herein
shall obligate Custodian to take any such action except in its sole
discretion.
D. Custodian shall be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for such cash disbursements, costs
and expenses as may be agreed upon from time to time by Custodian and
Fund.
E. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to
have been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive, as conclusive proof of any
fact or matter required to be ascertained from Fund hereunder,
instructions or a certificate signed by the Fund's President or other
authorized officer.
F. Without limiting the generality of the foregoing, 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 Assets purchased by or for Fund,
the legality of the purchase thereof, the validity, completeness,
correctness or sufficiency of any loan documents required by Fund
to be received by Custodian, the sufficiency of the evidence of
ownership of Assets required by Fund to be received by Custodian,
or the propriety of the decision to purchase or amount paid for
any Assets;
2. The legality of the sale of any Assets by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor;
16
4. The legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor; or
5. The legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any
dividend.
G. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
to be received by it on behalf of Fund, until Custodian actually
receives such money, provided only that it shall advise Fund promptly
if it fails to receive any such money in the ordinary course of
business, and use its best efforts and cooperate with Fund toward the
end that such money shall be received.
H. Except for any subcustodians or eligible foreign custodians appointed
under Section 2.S. to the extent provided therein, Custodian shall not
be responsible for loss occasioned by the acts, neglects, defaults or
insolvency of any broker, bank, trust company, or any other person
with whom Custodian may deal in the absence of negligence or bad faith
on the part of Custodian.
I. Notwithstanding anything herein to the contrary, Custodian may, and
with respect to any foreign subcustodian appointed under Section 2.S.2
must, provide Fund for its approval, agreements with banks or trust
companies which will act as subcustodians for Fund pursuant to Section
2.S of this Agreement.
J. Custodian shall not be responsible or liable for the failure or delay
in performance of its obligations under this Agreement, or those of
any entity for which it is responsible hereunder, arising out of or
caused, directly or indirectly, by circumstances beyond the affected
entity's reasonable control, including, without limitation: any
interruption, loss or malfunction of any utility, transportation,
computer (hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
5. COMPENSATION. Fund will pay to Custodian such compensation as is stated in
the Fee Schedule from time to time agreed to in writing by Custodian and
Fund. Custodian may charge such compensation against monies held by it for
the account of Fund. Custodian will also be entitled, notwithstanding the
provisions of Sections 4.C. or 4.D. hereof, to charge against any monies
held by it for the account of Fund the amount of any loss, damage,
liability, advance, or expense for which it shall be entitled to
reimbursement under the provisions of this Agreement including fees or
expenses due to Custodian for other services provided to the Fund by the
Custodian. Custodian will not be entitled to reimbursement by Fund for any
17
loss or expenses of any subcustodian, except to the extent Custodian would
be entitled to reimbursement hereunder if it incurred the loss or expense
itself directly.
TERMINATION. This Agreement shall continue in effect until terminated by
either party by notice in writing received by the other party not less than
ninety (90) days prior to the date upon which such termination shall take
effect. Upon termination of this Agreement, Fund will pay to Custodian such
compensation for its reimbursable disbursements, costs and expenses paid or
incurred to such date. The governing Board of Fund will, forthwith upon
giving or receiving notice of termination of this Agreement, appoint as
successor custodian a qualified bank or trust company. Custodian will, upon
termination of this Agreement, deliver to the successor custodian so
appointed, at Custodian's office, all securities then held by Custodian
hereunder, duly endorsed and in form for transfer, all funds, loan
documents and other properties of Fund deposited with or held by Custodian
hereunder, or will co-operate in effecting changes in book-entries at the
Depositories. In the event no written order designating a successor
custodian has been delivered to Custodian on or before the date when such
termination becomes effective, then Custodian may deliver the securities,
funds and properties of Fund to a bank or trust company at the selection of
Custodian and meeting the qualifications for custodian, if any, set forth
in the governing documents of the Fund and having not less that Two Hundred
Million Dollars ($200,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report. Upon delivery to a
successor custodian, Custodian will have no further obligations or
liabilities under this Agreement. Thereafter such bank or trust company
will be the successor custodian under this Agreement and will be entitled
to reasonable compensation for its services. In the event that no such
successor custodian can be found, Fund will submit to its shareholders,
before permitting delivery of the cash and securities owned by Fund to
anyone other than a successor custodian, the question of whether Fund will
be liquidated or function without a custodian. Notwithstanding the
foregoing requirement as to delivery upon termination of this Agreement,
Custodian may make any other delivery of the securities, funds, loan
documents and property of Fund which is permitted by the Investment Company
Act of 1940, Fund's governing documents then in effect or apply to a court
of competent jurisdiction for the appointment of a successor custodian.
6. NOTICES. Notices, requests, instructions and other writings, in the form of
letters, facsimiles, transmissions or electronic mail ("Writings"),
received by Fund at 0000 X. Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, XX
00000-0000 , or at such other address as Fund may have designated to
Custodian in writing, will be deemed to have been properly given to Fund
hereunder; and notices, requests, instructions and other Writings received
by Custodian at its offices at 000 Xxxxxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, or to such other address as it may have designated to Fund in
writing, will be deemed to have been properly given to Custodian hereunder.
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7. LIMITATION OF LIABILITY. Notice is hereby given that a copy of Fund's trust
agreement and all amendments thereto is on file with the Secretary of State
of the state of its organization; that this Agreement has been executed on
behalf of Fund by the undersigned duly authorized representative of Fund in
his/her capacity as such and not individually; and that the obligations of
this Agreement shall only be binding upon the assets and property of Fund
and shall not be binding upon any trustee, officer or shareholder of Fund
individually.
8. MISCELLANEOUS.
A. This Agreement is executed and delivered in the Commonwealth of
Massachusetts and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will
constitute one and the same instrument.
F. If any part, term or provision of this Agreement is determined to be
illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term
or provision held to be illegal or invalid.
G. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications
Act of 1985 for the specific purpose of direct communications between
such issuer and Fund unless the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without prior
written consent of the other party.
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I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder, such statues, rules and regulations shall be
deemed to control and supersede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
J. The representations and warranties and the indemnification extended
hereunder are intended to and shall continue after and survive the
expiration, termination or cancellation of this Agreement.
K. This Agreement does not in any way affect any other agreements entered
into between the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly respective authorized officers.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
ING PILGRIM SENIOR INCOME FUND
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
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