(g)3 Form of Amendment to Custody Agreement
AMENDMENT TO CUSTODY AGREEMENT
This Amendment to the Custody Agreement is made as of _____________,
2001 by and between ALPINE EQUITY TRUST (the "Fund") and STATE STREET BANK AND
TRUST COMPANY, assignee of Investors Fiduciary Trust Company (the "State
Street"). Capitalized terms used in this Amendment without definition shall have
the respective meanings given to such terms in the Contract referred to below.
WHEREAS, the Fund and Investors Fiduciary Trust Company entered into a
Custody Agreement dated as of April 27, 1998, which was assigned from Investors
Fiduciary Trust Company to State Street effective January 1, 2000 (the
"Contract"); and
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and the Fund has made each such series subject to
the Contract (each such series, together with all other series subsequently
established by a Fund and made subject to the Contract in accordance with the
terms thereof, shall be referred to as a "Portfolio," and, collectively, the
"Portfolios"); and
WHEREAS, the Fund and State Street desire to amend certain provisions
of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") and the
adoption of Rule 17f-7 ("Rule 17f-7") promulgated under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund and State Street desire to amend and restate certain
other provisions of the Contract relating to the custody of assets of each of
the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree to
amend the Contract, pursuant to the terms thereof, as follows:
I. Section 3, Paragraph Q of the Contract is hereby deleted.
II. New Section 3, Paragraph Q of the Contract is hereby added, as of the
effective date of this Amendment, as set forth below.
3.Q. PROVISIONS RELATING TO RULE 17F-5
3.Q.1. DEFINITIONS. Capitalized terms in this Amendment shall have the
following meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned direct or indirect subsidiary of a U.S. Bank
(as defined in Rule 17f-5), a bank holding company meeting the requirements of
an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other
appropriate action of the U.S. Securities and Exchange Commission (the "SEC")),
or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 0000 Xxx)
meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the
term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
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3.Q.2. DELEGATION TO STATE STREET AS FOREIGN CUSTODY MANAGER. The Fund,
by resolution adopted by its Board of Trustees (the "Board"), hereby delegates
to State Street, subject to Section (b) of Rule 17f-5, the responsibilities set
forth in this Section 3.Q. with respect to Foreign Assets of the Portfolios held
outside the United States, and State Street hereby accepts such delegation as
Foreign Custody Manager with respect to the Portfolios.
3.Q.3. COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody Manager.
The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets of the
Portfolios, which list of Eligible Foreign Custodians may be amended from time
to time in the sole discretion of the Foreign Custody Manager. The Foreign
Custody Manager will provide amended versions of Schedule A in accordance with
Section 3.Q.6 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the
applicable account opening requirements for such country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board on behalf of the
Portfolios responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each country listed on Schedule A in which State
Street has previously placed or currently maintains Foreign Assets pursuant to
the terms of the Contract. Following the receipt of Proper Instructions
directing the Foreign Custody Manager to close the account of a Portfolio with
the Eligible Foreign Custodian selected by the Foreign Custody Manager in a
designated country, the delegation by the Board on behalf of the Portfolios to
State Street as Foreign Custody Manager for that country shall be deemed to have
been withdrawn and State Street shall immediately cease to be the Foreign
Custody Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period to which the parties agree in writing)
after receipt of any such notice by the Fund, State Street shall have no further
responsibility in its capacity as Foreign Custody Manager to the Fund with
respect to the country as to which State Street's acceptance of delegation is
withdrawn.
3.Q.4. SCOPE OF DELEGATED RESPONSIBILITIES:
(A) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of Section 3.Q., the Foreign Custody Manager may place and maintain
the Foreign Assets in the care of the Eligible Foreign Custodian selected by the
Foreign Custody Manager in each country listed on Schedule A, as amended from
time to time. In performing its delegated responsibilities as Foreign Custody
Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian,
the Foreign Custody Manager shall determine that the Foreign Assets will be
subject to reasonable care, based on the standards applicable to custodians in
the country in which the Foreign Assets will be held by that Eligible Foreign
Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation the factors specified in Rule 17f-5(c)(1).
(B) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign
Custody Manager shall determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
(C) MONITORING. In each case in which the Foreign Custody
Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by
the Foreign Custody Manager, the Foreign Custody Manager shall establish a
system to monitor (i) the appropriateness of maintaining the Foreign Assets with
such Eligible Foreign Custodian and (ii) the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible
Foreign Custodian. In the event the Foreign Custody Manager determines that the
custody arrangements with an Eligible Foreign Custodian it has selected are no
longer appropriate, the Foreign Custody Manager shall notify the Board in
accordance with Section 3.Q.6 hereunder.
3.Q.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section 3.Q, the Board shall be deemed to have considered and determined
to accept such Country Risk as is incurred by placing and maintaining the
Foreign Assets in each country for which State Street is serving as Foreign
Custody Manager of the Portfolios.
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3.Q.6. REPORTING REQUIREMENTS. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the
placement of such Foreign Assets with another Eligible Foreign Custodian by
providing to the Board an amended Schedule A at the end of the calendar quarter
in which an amendment to such Schedule has occurred. The Foreign Custody Manager
shall make written reports notifying the Board of any other material change in
the foreign custody arrangements of the Portfolios described in this Section 3.Q
after the occurrence of the material change.
3.Q.7. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In
performing the responsibilities delegated to it, the Foreign Custody Manager
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of assets of management investment
companies registered under the 1940 Act would exercise.
3.Q.8. REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5. The Fund represents to State Street that the Board has
determined that it is reasonable for the Board to rely on State Street to
perform the responsibilities delegated pursuant to this Contract to State Street
as the Foreign Custody Manager of the Portfolios.
3.Q.9. EFFECTIVE DATE AND TERMINATION OF STATE STREET AS FOREIGN
CUSTODY MANAGER. The Board's delegation to State Street as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and shall
remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party. Termination will
become effective thirty (30) days after receipt by the non-terminating party of
such notice. The provisions of Section 3.Q.3 hereof shall govern the delegation
to and termination of State Street as Foreign Custody Manager of the Portfolios
with respect to designated countries.
3.Q.10. ANALYSIS AND MONITORING. State Street shall (a) provide the
Fund (or its duly-authorized investment manager or investment adviser) with an
analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or investment adviser) of any material change in such risks,
in accordance with section (a)(1)(i)(B) of Rule 17f-7.
3.Q.11. STANDARD OF CARE. State Street agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.Q.10.
III. New Section 3, Paragraph Y of the Contract
is hereby added, as of the effective date of
this Amendment, as set forth below.
3.Y. PROVISIONS RELATING TO CUSTODY OF ASSETS HELD OUTSIDE THE UNITED STATES
3.Y.1. DUTIES OF STATE STREET WITH RESPECT TO PROPERTY OF THE
PORTFOLIOS HELD OUTSIDE THE UNITED STATES.
DEFINITIONS. Capitalized terms in this Section 3.Y shall have
the following meanings: "Foreign Securities System" means an Eligible Securities
Depository listed on Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
3.Y.2. HOLDING SECURITIES. State Street shall identify on its books as
belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. State Street may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to State Street for
the benefit of its customers, provided however, that (i) the records of State
Street with respect to foreign securities of the Portfolios which are maintained
in such account shall identify those securities as belonging to the Portfolios
and (ii), to the extent permitted and customary in the market in which the
account is maintained, State Street shall require that securities so held by the
Foreign Sub-Custodian
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be held separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian.
3.Y.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by State Street or a Foreign Sub-Custodian, as
applicable, in such country.
3.Y.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
3.Y.5. DELIVERY OF FOREIGN ASSETS. State Street or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by State Street or such Foreign Sub-Custodian, or in a Foreign Securities
System account, only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:
(i) upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against
expectation of receiving later payment; or (B) in the case of
a sale effected through a Foreign Securities System, in
accordance with the rules governing the operation of the
Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolios;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of State Street (or the name of the respective Foreign
Sub-Custodian or of any nominee of State Street or such
Foreign Sub-Custodian) or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
custom; provided that in any such case the Foreign
Sub-Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from
the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) FOR ANY OTHER PURPOSE, BUT ONLY UPON RECEIPT OF PROPER
INSTRUCTIONS SPECIFYING THE FOREIGN SECURITIES TO BE DELIVERED AND NAMING THE
PERSON OR PERSONS TO WHOM DELIVERY OF SUCH SECURITIES SHALL BE MADE.
3.Y.6. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, State Street shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies of
a Portfolio in the following cases only:
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(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A)
delivering money to the seller thereof or to a dealer therefor
(or an agent for such seller or dealer) against expectation of
receiving later delivery of such foreign securities; or (B) in
the case of a purchase effected through a Foreign Securities
System, in accordance with the rules governing the operation
of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Contract, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through State Street or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in
respect of securities sold short;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) FOR ANY OTHER PURPOSE, BUT ONLY UPON RECEIPT OF PROPER
INSTRUCTIONS SPECIFYING THE AMOUNT OF SUCH PAYMENT AND NAMING THE PERSON OR
PERSONS TO WHOM SUCH PAYMENT IS TO BE MADE.
3.Y.7. MARKET CONDITIONS. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received for
the account of the Portfolios and delivery of Foreign Assets maintained for the
account of the Portfolios may be effected in accordance with the customary
established securities trading or processing practices and procedures in the
country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) with the expectation of
receiving later payment for such Foreign Assets from such purchaser or dealer.
State Street shall provide to the Board the information with respect to custody
and settlement practices in countries in which State Street employs a Foreign
Sub-Custodian described on Schedule C hereto at the time or times set forth on
such Schedule. State Street may revise Schedule C from time to time, provided
that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder.
3.Y.8. REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of State Street or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and the Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. State Street or a Foreign Sub-Custodian shall
not be obligated to accept securities on behalf of a Portfolio under the terms
of this Contract unless the form of such securities and the manner in which they
are delivered are in accordance with reasonable market practice.
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3.Y.9. BANK ACCOUNTS. State Street shall identify on its books as
belonging to the Fund cash (including cash denominated in foreign currencies)
deposited with State Street. Where State Street is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of State
Street, a bank account or bank accounts shall be opened and maintained outside
the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All
accounts referred to in this Section shall be subject only to draft or order by
State Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant to
the terms of this Agreement to hold cash received by or from or for the account
of the Portfolio. Cash maintained on the books of State Street (including its
branches, subsidiaries and affiliates), regardless of currency denomination, is
maintained in bank accounts established under, and subject to the laws of, The
Commonwealth of Massachusetts.
3.Y.10. COLLECTION OF INCOME. State Street shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled and
shall credit such income, as collected, to the applicable Portfolio. In the
event that extraordinary measures are required to collect such income, the Fund
and State Street shall consult as to such measures and as to the compensation
and expenses of State Street relating to such measures.
3.Y.11. SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Article 0, Xxxxx Xxxxxx will use reasonable commercial efforts
to facilitate the exercise of voting and other shareholder rights, subject
always to the laws, regulations and practical constraints that may exist in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
3.Y.12. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. State Street
shall transmit promptly to the Fund written information with respect to
materials received by State Street via the Foreign Sub-Custodians from issuers
of the foreign securities being held for the account of the Portfolios
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith). With respect to
tender or exchange offers, State Street shall transmit promptly to the Fund
written information with respect to materials so received by State Street from
issuers of the foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer. State Street shall
not be liable for any untimely exercise of any tender, exchange or other right
or power in connection with foreign securities or other property of the
Portfolios at any time held by it unless (i) State Street or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) State Street receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at least three
business days prior to the date on which State Street is to take action to
exercise such right or power.
3.Y.13. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to
which State Street employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, State Street
from and against any loss, damage, cost, expense, liability or claim arising out
of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of State Street with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Portfolios have not been made
whole for any such loss, damage, cost, expense, liability or claim.
3.Y.14. TAX LAW. State Street shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund, the Portfolios or
State Street as custodian of the Portfolios by the tax law of the United States
or of any state or political subdivision thereof. It shall be the responsibility
of the Fund to notify State Street of the obligations imposed on the Fund with
respect to the Portfolios or State Street as custodian of the Portfolios by the
tax law of
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countries other than those mentioned in the above sentence, including
responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of State Street with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.
3.Y.15. LIABILITY OF CUSTODIAN. Except as may arise from State Street's
own negligence or willful misconduct or the negligence or willful misconduct of
a Sub-Custodian, State Street shall be without liability to the Fund for any
loss, liability, claim or expense resulting from or caused by anything which is
part of Country Risk. State Street shall be liable for the acts or omissions of
a Foreign Sub-Custodian to the same extent as set forth with respect to
sub-custodians generally in the Contract and, regardless of whether assets are
maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities
System, State Street shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism, or any other loss where the
Sub-Custodian has otherwise acted with reasonable care.
IV. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail. If State Street is delegated the responsibilities of
Foreign Custody Manager pursuant to the terms of Section 3, Paragraph Q
hereof, in the event of any conflict between the provisions of Section
3, Paragraph Q and Section 3, Paragraph Y hereof, the provisions of
Section 3, Paragraph Q shall prevail.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
STATE STREET BANK AND TRUST COMPANY
By:
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Name:
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Title:
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ALPINE EQUITY TRUST
By:
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Name:
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Title:
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