CUSTODIAN AGREEMENT
This Agreement between SECURITY INCOME FUND, a corporation organized
and existing under the laws of the state of Kansas (the "FUND"), and STATE
STREET BANK and TRUST COMPANY, a Massachusetts trust company (the "CUSTODIAN"),
WITNESSETH:
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
WHEREAS, the Fund intends that this Agreement be applicable to the
series of the Fund listed on Schedule I (such series together with all other
series subsequently made subject to this Agreement, to be referred to herein as
the "PORTFOLIO(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets of its
Portfolios in accordance with the terms and conditions of the Custodian
Agreement attached hereto as Exhibit A. Any and all references to "Fund" or
"Funds" in the Custodian Agreement shall be deemed to refer to Security Income
Fund.
The Fund hereby instructs Custodian in accordance with the Funds Transfer
Addendum attached hereto as Exhibit B.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative as of
March 1, 2004.
SECURITY INCOME FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxx X. Xxx
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Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ B. Z. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx Name: B. Z. Xxxxxxx
Title: Senior Vice President Title: Vice President
SCHEDULE I
SECURITY INCOME FUND
Income Opportunity Series
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EXHIBIT A
CUSTODIAN AGREEMENT
This Agreement between each registered investment companies having
executed this Agreement, each a corporation organized and existing under the
laws of the state of Kansas (each a "FUND" and collectively the "FUNDS"), and
STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company (the
"CUSTODIAN"),
WITNESSETH:
WHEREAS, each 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
WHEREAS, each Fund intends that this Agreement be applicable to the
series of the Fund listed on Schedule I (such series together with all other
series subsequently established by the Funds and made subject to this Agreement
in accordance with Section 18, be referred to herein as the "PORTFOLIO(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
Each Fund hereby employs the Custodian as the custodian of the assets of its
respective Portfolios, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("DOMESTIC SECURITIES") and securities it desires to be held outside the United
States ("FOREIGN SECURITIES"). Each Fund on behalf of its respective
Portfolio(s) agrees to deliver to the Custodian all securities and cash of the
Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund representing
interests in the Portfolios ("SHARES") as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in
Section 6 hereof), the Custodian shall on behalf of the applicable Portfolio(s)
from time to time employ one or more sub-custodians located in the United
States, but only in accordance with an applicable vote by the Board of Directors
of the Fund (the "BOARD") on behalf of the applicable Portfolio(s), and provided
that the Custodian shall have no more or less responsibility or liability to the
Fund on account of any actions or omissions of any sub-custodian so employed
than if the action or omission was that of the Custodian itself. The Custodian
may employ as sub-custodian for the Fund's foreign securities on behalf of the
applicable Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto but only in accordance with
the applicable provisions of Sections 3 and 4.
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SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF EACH FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to Section
2.8 in a clearing agency which acts as a securities depository or in a
book-entry system authorized by the U.S. Department of the Treasury (each, a
"U.S. SECURITIES SYSTEM") and (b) commercial paper of an issuer for which State
Street Bank and Trust Company acts as issuing and paying agent ("DIRECT PAPER")
which is deposited and/or maintained in the Direct Paper System of the Custodian
(the "DIRECT PAPER SYSTEM") pursuant to Section 2.9.
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("DIRECT PAPER SYSTEM ACCOUNT") only upon
receipt of Proper Instructions on behalf of the applicable Portfolio, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.8
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.7 or into the name
or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or
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liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities
except as may arise from the Custodian's own negligence or
willful misconduct;
8) 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;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar 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; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowing by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "EXCHANGE ACT") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a futures commission merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission ("CFTC")
and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
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14) Upon receipt of instructions from the transfer agent for the
Fund (the "TRANSFER AGENT") for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund related to the Portfolio
(the "PROSPECTUS"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper purpose, but only upon receipt of Proper
Instructions from the Fund on behalf of the applicable
Portfolio specifying the securities of the Portfolio to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the Portfolio
or of any nominee of the Custodian which nominee shall be assigned exclusively
to the Portfolio, unless the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered investment companies having
the same investment adviser as the Portfolio, or in the name or nominee name of
any agent appointed pursuant to Section 2.7 or in the name or nominee name of
any sub-custodian appointed pursuant to Section 1. All securities accepted by
the Custodian on behalf of the Portfolio under the terms of this Agreement shall
be in "street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls, maturities,
tender or exchange offers.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended (the "1940 ACT"). Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as Custodian in
the Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the Board. Such
funds shall be deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which each
Portfolio shall be entitled either by law or pursuant
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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 Portfolio's
custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due each Portfolio on
securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the timely delivery
to the Custodian of the income to which the Portfolio is properly entitled.
SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions
on behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.8 hereof; (c) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.9; (d) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery
of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such
transfer may be effected prior to receipt of a confirmation
from a broker and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined herein;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued as set forth
in Section 5 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes,
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management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses
are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares declared pursuant
to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of Proper
Instructions from the Fund on behalf of the Portfolio
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 2 as
the Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System (the "U.S. SECURITIES SYSTEM ACCOUNT") which
account shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the U.S. Securities System Account, and (ii)
the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the
Portfolio. The Custodian shall transfer securities sold for
the account of the Portfolio upon (i) receipt of advice from
the U.S. Securities System that payment for such securities
has been transferred to the U.S. Securities System Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account
of the Portfolio. Copies of all advices from the U.S.
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Securities System of transfers of securities for the account
of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian shall furnish the
Fund on behalf of the Portfolio confirmation of each transfer
to or from the account of the Portfolio in the form of a
written advice or notice and shall furnish to the Fund on
behalf of the Portfolio copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities
System for the account of the Portfolio;
4) The Custodian shall provide the Fund with any report obtained
by the Custodian on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
5) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the U.S. Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss or damage.
SECTION 2.9 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM.
The Custodian may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
the Direct Paper System Account, which account shall not
include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the
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records of the Custodian to reflect such transfer and receipt
of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Direct Paper System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
SECTION 2.10 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the CFTC or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Portfolio,
(ii) for purposes of segregating cash or government securities in connection
with options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release of the SEC,
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies and (iv) for other
proper corporate purposes, but only, in the case of clause (iv), upon receipt of
Proper Instructions from the Fund on behalf of the applicable Portfolio, setting
forth the purpose or purposes of such segregated account and declaring such
purpose(s) to be a proper corporate purpose.
SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
SECTION 2.12 PROXIES. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.
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SECTION 2.13 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject
to the provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without limitation,
pendency of calls and maturities of domestic securities and expirations of
rights in connection therewith and notices of exercise of call and put options
written by the Fund on behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by the Custodian from
issuers of the securities being held for the Portfolio. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the Portfolio all
written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
SECTION 2.14 CORPORATE ACTIONS. Whenever Custodian receives information
concerning the Assets which requires discretionary action by the Fund, such as
subscription rights, bonus issues, stock repurchase plans and rights offerings,
or legal notices or other material intended to be transmitted to securities
holders ("Corporate Actions"), Custodian shall give Fund notice of such
Corporate Actions to the extent that Custodian has actual knowledge of a
Corporate Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, Custodian shall endeavor to obtain
Instructions from Fund, but if Instructions are not received in time for
Custodian to take timely action, or actual notice of such Corporate Action was
received too late to seek Instructions, Custodian will not take any action with
respect to such Corporate Action and it shall be held harmless for so doing.
SECTION 2.15 TAX RECLAIMS.
1) Subject to the provisions hereof, Custodian shall apply for a
reduction of withholding tax and any refund of any tax paid or
tax credits which apply in each applicable market in respect
of income payments on the Assets for Fund's benefit which
Custodian is aware may be available to Fund.
2) The provision of tax reclaim services by Custodian is
conditional upon Custodian's receiving from Fund or, to the
extent the Assets are beneficially owned by others, from each
beneficial owner, (A) a declaration of the beneficial owner's
identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from
Custodian). Fund acknowledges that, if Custodian does not
receive such declarations, documentation and information
Custodian shall be unable to provide tax reclaim services.
3) Custodian shall not be liable to Fund or any third party for
any taxes, fines or penalties payable by Custodian or Fund,
and shall be indemnified accordingly, whether these result
from the inaccurate completion of documents by Fund or any
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third party, or as a result of the provision to Custodian or
any third party of inaccurate or misleading information or the
withholding of material information by Fund or any other third
party, or as a result of any delay of any revenue authority or
any other matter beyond Custodian's control.
4) Custodian shall perform tax reclaim services only with respect
to taxation levied by the revenue authorities of the countries
notified to Fund from time to time and Custodian may, by
notification in writing, at Custodian's absolute discretion,
supplement or amend the markets in which tax reclaim services
are offered. Other than as expressly provided in this
sub-clause, Custodian shall have no responsibility with regard
to Fund's tax position or status in any jurisdiction.
5) Fund confirms that Custodian is authorized to disclose any
information requested by any revenue authority or any
governmental body in relation to Fund or the securities and/or
cash held for Fund.
6) Tax reclaim services may be provided by Custodian or, in whole
or in part, by one or more third parties appointed by
Custodian (which may be Custodian's affiliates); provided that
Custodian shall be liable for the performance of any such
third party to the same extent as Custodian would have been if
Custodian performed such services.
SECTION 3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER OF THE PORTFOLIOS
SECTION 3.1 DEFINITIONS. The following capitalized terms shall have the
indicated 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 Mandatory Securities Depositories 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 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 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, except that the term does not include Mandatory Securities
Depositories.
"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)(2) of Rule
17f-5.
12
"MANDATORY SECURITIES DEPOSITORY" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund, on the Portfolios' behalf, determines to place Foreign Assets in a country
outside the United States (i) because required by law or regulation; (ii)
because securities cannot be withdrawn from such foreign securities depository
or clearing agency; or (iii) because maintaining or effecting trades in
securities outside the foreign securities depository or clearing agency is not
consistent with prevailing or developing custodial or market practices.
SECTION 3.2 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
Each Fund, by resolution adopted by its respective Board, hereby delegates to
the Custodian with respect to the Portfolios, subject to Section (b) of Rule
17f-5, the responsibilities set forth in this Section 3 with respect to Foreign
Assets of the Portfolios held outside the United States, and the Custodian
hereby accepts such delegation, as Foreign Custody Manager with respect to the
Portfolios.
SECTION 3.3 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 Agreement, 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. Mandatory
Securities Depositories are listed on Schedule B to this Contract, which
Schedule B may be amended from time to time by the Foreign Custody Manager. The
Foreign Custody Manager will provide amended versions of Schedules A and B in
accordance with Section 3.7 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. 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 the Custodian as Foreign Custody Manager for that country shall be
deemed to have been withdrawn and the Custodian 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 as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.
13
SECTION 3.4 SCOPE OF DELEGATED RESPONSIBILITIES.
3.4.1. Selection of Eligible Foreign Custodians. Subject to the
provisions of this Section 3, the Portfolios' 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).
3.4.2. Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that the contract (or the rules or established practices
or procedures in the case of an Eligible Foreign Custodian that is a foreign
securities depository or clearing agency) 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).
3.4.3. 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 (or the rules or established practices and procedures in the
case of an Eligible Foreign Custodian selected by the Foreign Custody Manager
which is a foreign securities depository or clearing agency that is not a
Mandatory Securities Depository). 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 3.7 hereunder.
SECTION 3.5 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 3, 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 the Custodian is serving as Foreign
Custody Manager of the Portfolios. The Fund, on behalf of the Portfolios, and
the Board shall be deemed to be monitoring on a continuing basis such Country
Risk to the extent that the Board considers necessary or appropriate. The Fund
and the Custodian each expressly acknowledge that the Foreign Custody Manager
shall not be delegated any responsibilities under this Section 3 with respect to
Mandatory Securities Depositories.
SECTION 3.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE
PORTFOLIOS. 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.
14
SECTION 3.7 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 amended Schedules A or B at the end of the calendar
quarter in which an amendment to either 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 after the occurrence of the material change.
SECTION 3.8 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 the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Agreement
to the Custodian as the Foreign Custody Manager of the Portfolios. Each party
represents that it will in good faith negotiate revised terms for this Agreement
to reflect future amendments to Rule 17f-5 or the regulations thereunder, if
any.
SECTION 3.9 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date of execution of this
Agreement 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 forty-five (45) days after receipt by
the non-terminating party of such notice. The provisions of Section 3.3 hereof
shall govern the delegation to and termination of the Custodian as Foreign
Custody Manager of the Portfolios with respect to designated countries.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS
HELD OUTSIDE OF THE UNITED STATES
SECTION 4.1 DEFINITIONS. Capitalized terms in this Section 4 shall have
the following meanings:
"FOREIGN SECURITIES SYSTEM" means either a clearing agency or a securities
depository listed on Schedule A hereto or a Mandatory Securities Depository
listed on Schedule B hereto.
"FOREIGN SUB-CUSTODIAN" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2 HOLDING SECURITIES. The Custodian shall identify on its
books as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian 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 the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian 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, the Custodian shall require that securities so
held by the Foreign
15
Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian
or of other customers of such Foreign Sub-Custodian.
SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country only through
arrangements implemented by the Foreign Sub-Custodian in such country pursuant
to the terms of this Agreement.
SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. Delivery of Foreign Securities. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by 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 Portfolios in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against
predetermined amount and method 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 the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian 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;
16
(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 proper purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
4.4.2. Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian 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:
(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 Agreement, 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 the Custodian or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign
securities; and
17
(viii) for any other proper purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment, setting
forth the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom such payment is to be
made.
4.4.3. Market Conditions. Notwithstanding any provision of this
Agreement 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.
The Custodian shall provide to the Board the information with respect
to custody and settlement practices in countries in which the Custodian employs
a Foreign Sub-Custodian, including without limitation information relating to
Foreign Securities Systems, described on Schedule C hereto at the time or times
set forth on such Schedule. The Custodian 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.
SECTION 4.5 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 the Custodian 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. The Custodian or a Foreign Sub-Custodian
shall not be obligated to accept securities on behalf of a Portfolio under the
terms of this Agreement unless the form of such securities and the manner in
which they are delivered are in accordance with reasonable market practice.
SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as
belonging to the Fund cash (including cash denominated in foreign currencies)
deposited with the Custodian. Where the Custodian is unable to maintain, or
market practice does not facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts opened and maintained outside the
United States on behalf of a Portfolio with a Foreign Sub-Custodian shall be
subject only to draft or order by the Custodian or 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.
SECTION 4.7 COLLECTION OF INCOME. The Custodian 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 the Custodian shall consult as to such measures and as to the compensation
and expenses of the Custodian relating to such measures.
18
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities
held pursuant to this Agreement, the Custodian 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.
SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The
Custodian shall transmit promptly to the Fund written information (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith) received by the Custodian via the
Foreign Sub-Custodians from issuers of the foreign securities being held for the
account of the Portfolios. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Fund written information so received by
the Custodian 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.
The Custodian 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) the Custodian or
the respective Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) the Custodian 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 the Custodian is to take
action to exercise such right or power
SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES
SYSTEMS. Each agreement pursuant to which the Custodian employs as 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 the extent
possible, to indemnify, and hold harmless, the Custodian from and against any
loss, damage, cost, expense, liability or claim arising out of or in connection
with the Foreign Sub-Custodian's performance of such obligations. At the Fund's
election, the Portfolios shall be entitled to be subrogated to the rights of the
Custodian 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.
SECTION 4.11 TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the
Portfolios, or imposed on the Custodian solely because it acts 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 the
Custodian of the obligations imposed on the Fund with respect to the Portfolios,
or on the Custodian solely because it acts as custodian of the Portfolios, by
the tax law of 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 the Custodian 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. Nothing in this Agreement shall be construed to obligate the Funds
to pay any taxes (whether federal, state, local or other) attributable to the
Custodian's income.
19
SECTION 4.12 CONFLICT. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of Section 3
hereof, in the event of any conflict between the provisions of Sections 3 and 4
hereof, the provisions of Section 3 shall prevail.
SECTION 5. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent and deposit into the account of the appropriate Portfolio
such payments as are received for Shares thereof issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Fund on
behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
From such funds as may be available for the purpose, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make funds
available for payment to holders of Shares who have delivered to the Transfer
Agent a request for redemption or repurchase of their Shares. In connection with
the redemption or repurchase of Shares, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
SECTION 6. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Agreement means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement of
the purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Fund and the
Custodian agree to security procedures, including but not limited to, the
security procedures selected by the Fund in the Funds Transfer Addendum attached
hereto. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.10.
SECTION 7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
20
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, provided that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board.
SECTION 8. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper reasonably
believed by it to be genuine and to have been properly executed by or on behalf
of the Fund. The Custodian may receive and accept a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Fund ("CERTIFIED
RESOLUTION") as conclusive evidence (a) of the authority of any person to act in
accordance with such resolution or (b) of any determination or of any action by
the Board as described in such resolution, and such resolution may be considered
as in full force and effect until receipt by the Custodian of written notice to
the contrary.
SECTION 9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board to keep the books of account of
each Portfolio and/or compute the net asset value per Share of the outstanding
Shares or, if directed in writing to do so by the Fund on behalf of the
Portfolio, shall itself keep such books of account and/or compute such net asset
value per Share. If so directed, the Custodian shall also calculate daily the
net income of the Portfolio as described in the Prospectus and shall advise the
Fund and the Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per Share and the daily
income of each Portfolio shall be made at the time or times described from time
to time in the Prospectus.
SECTION 10. RECORDS
The Custodian shall with respect to each Portfolio 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 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers,
21
employees or agents of the Fund and employees and agents of the SEC. The
Custodian shall, at the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by the Custodian and shall, when
requested to do so by the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers in such
tabulations.
SECTION 11. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other annual reports to the SEC and with respect to
any other requirements thereof.
SECTION 12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities System or a Foreign Securities System, relating to the
services provided by the Custodian under this Agreement; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 13. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian, and set forth in
a separate fee schedule, incorporated herein by reference.
SECTION 14. RESPONSIBILITY OF CUSTODIAN
Custodian shall at all times use reasonable care and due diligence and
act in good faith in performing its duties under this Agreement. So long as and
to the extent that it is in the exercise of reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any property or
evidence of title thereto received by it or delivered by it pursuant to this
Agreement and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to be signed by the proper party or parties, including any futures
commission merchant acting pursuant to the terms of a three-party futures or
options agreement. The Custodian shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith without negligence, provided, however, that the Fund shall not be
responsible for consequential, special or punitive damages. The Custodian shall
be entitled to rely on and may act upon advice of counsel for the Fund with
respect to questions or matters of law, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. The Custodian shall
be without liability to the Fund and the Portfolios for any loss,
22
liability, claim or expense resulting from or caused by anything which is (A)
part of Country Risk (as defined in Section 3 hereof), including without
limitation nationalization, expropriation, currency restrictions, or acts of
war, revolution, riots or terrorism, or (B) part of the "prevailing country
risk" of the Portfolios, as such term is used in SEC Release Nos. IC-22658;
IS-1080 (May 12, 1997) or as such term or other similar terms are now or in the
future officially interpreted by the SEC or by the staff of the Division of
Investment Management thereof through regulation or release.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, work
stoppages, natural disasters, or other similar events or acts; (ii) errors by
the Fund or the Investment Advisor in their instructions to the Custodian
provided such instructions have been in accordance with this Agreement; (iii)
the insolvency of or acts or omissions by a Securities System; (iv) any delay or
failure of any broker, agent or intermediary, central bank or other commercially
prevalent payment or clearing system to deliver to the Custodian's sub-custodian
or agent securities purchased or in the remittance or payment made in connection
with securities sold; (v) any delay or failure of any company, corporation, or
other body in charge of registering or transferring securities in the name of
the Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or
any consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the reasonable opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable for
the payment of money or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities solely because it
acts as custodian of the Portfolios, except such as may arise from its or its
nominee's own negligent action,
23
negligent failure to act or willful misconduct, any property at any time held
for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
SECTION 15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
however, that the Fund shall not amend or terminate this Agreement in
contravention of any applicable federal or state regulations, or any provision
of the Fund's Articles of Incorporation, and further provided, that the Fund on
behalf of one or more of the Portfolios may at any time by action of its Board
(i) substitute another bank or trust company for the Custodian by giving notice
as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Agreement, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
SECTION 16. SUCCESSOR CUSTODIAN
If a successor custodian for one or more Portfolios shall be appointed
by the Board, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities of each applicable Portfolio then held by it hereunder
and shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a Certified Resolution, deliver at the office of
the Custodian and transfer such securities, funds and other properties in
accordance with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on behalf of each
applicable Portfolio and all instruments held by the Custodian
24
relative thereto and all other property held by it under this Agreement on
behalf of each applicable Portfolio, and to transfer to an account of such
successor custodian all of the securities of each such Portfolio held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the Certified Resolution to appoint a successor
custodian, the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities, funds
and other properties and the provisions of this Agreement relating to the duties
and obligations of the Custodian shall remain in full force and effect.
SECTION 17. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Fund's Articles of
Incorporation. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 18. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to those set forth on Schedule A with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it shall
so notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
SECTION 19. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
SECTION 20. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all
prior Agreements between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
SECTION 21. NOTICES.
Any notice, instruction or other instrument required to be given
hereunder may be delivered in person to the offices of the parties as set forth
herein during normal business hours or delivered
25
prepaid registered mail or by telex, cable or telecopy to the parties at the
following addresses or such other addresses as may be notified by any party from
time to time.
To the Fund: Security Funds
000 XX Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
With a copy to: Xxx X. Xxx, Secretary, Security Funds
000 XX Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telephone: 000-000-0000
Telecopy: 000-000-0000
To the Custodian: STATE STREET BANK AND TRUST COMPANY
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Insurance Services Division
Telephone: 000-000-0000
Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, in the case of cable twenty-four hours after
dispatch and, in the case of telex, immediately on dispatch and if delivered
outside normal business hours it shall be deemed to have been received at the
next time after delivery when normal business hours commence and in the case of
cable, telex or telecopy on the business day after the receipt thereof. Evidence
that the notice was properly addressed, stamped and put into the post shall be
conclusive evidence of posting.
SECTION 22. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, addenda, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 23. DATA ACCESS SERVICES
State Street will provide Fund, and its designated investment advisors,
consultants or other third parties authorized by State Street who agree to abide
by the terms of this Agreement
26
("Authorized Designees") with access to INSIGHTSM as described in Schedule D
(the "System") on a remote basis for the purpose of obtaining and analyzing
reports and information (the "Remote Access Services").
State Street may from time to time agree to make available to Fund
additional Systems that are not described in the Exhibits to this Agreement. In
the absence of any other written agreement concerning such additional systems,
the term "System" shall include, and this Agreement shall govern, the Fund's
access to and use of any additional System made available by State Street 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 State Street for use of the
System and access to the Remote Access Services. Fund agrees to advise State
Street 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 State Street 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 State Street.
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 State Street 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 State Street
related thereto are the exclusive, valuable and confidential property of State
Street and its relevant licensors (the "Proprietary Information"). Fund agrees
on its behalf and on behalf of its 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 State Street 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 State Street, or (iv)
allow or cause any information transmitted from State Street'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 State Street's Customer.
27
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 State Street
inadequately compensable in damages at law and that State Street 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.
State Street 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. State Street 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
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, STATE STREET 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 MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
State Street 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
State Street promptly in writing of any such claim or proceeding and cooperates
with State Street in the defense of such claim or proceeding. Should the System
or the Remote Access Services or any part thereof become, or in State Street'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, State
Street shall have the right, at State Street'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 this
Agreement without further obligation.
SECTION 24. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account of
customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of
28
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [X] The Custodian is authorized to release the Fund's name,
address, and share positions.
NO [ ] The Custodian is not authorized to release the Fund's name,
address, and share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of *[date].
SBL FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/XXXXX X. XXXXXXX By: /s/ XXXXX XXXXXXXX
------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxx
Title: President Title: Assistant Secretary
SECURITY EQUITY FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXXXX XXXXXXXX
------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxx
Title: President Title: Assistant Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ XXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXX
------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxx Xxx
Title: Vice President Title: Vice President
29
SCHEDULE I
SBL FUND
- Series G (Large Cap Growth Series)
- Series L (Capital Growth Series)
- Series Q (Small Cap Value Series)
- Series T (Technology Series)
- Series W (Main Street Growth and Income Series)
SECURITY EQUITY FUND
- Large Cap Growth Series
- Technology Series
00
XXXXX XXXXXX SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen Sparkassen AG --
Bahrain HSBC Bank Middle East (as delegate of the Hongkong --
and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Fortis Bank NV/as. --
Bermuda The Bank of Bermuda Limited --
Bolivia Citibank, N.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada State Street Trust Company Canada --
Chile Citibank, N.A. --
People's Republic of The Hongkong and Shanghai Banking Corporation --
China Limited, Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A.Sociedad Fiduciaria --
Costa Rica Banco BCT S.A. --
Croatia Privredana Banka Zagreb d.d --
Cyprus The Cyprus Popular Bank Ltd. --
Czech Republic Ceskoslovenska Obchodni Banka, A.S. --
31
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt Egyptian British Bank (as delegate of The Hongkong --
and Shanghai Banking Corporation Limited)
Estonia Hansabank --
Finland Xxxxxx Bank Plc --
France Paribas, S.A. --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. Bank of Greece, System for
Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Rt. --
Iceland Icebank Ltd. --
India Deutsche Bank AG --
The Hongkong and Shanghai Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Paribas, S.A. --
Ivory Coast Societe Generale de Banques en Cote d'Ivoire --
Jamaica Scotiabank Jamaica Trust and Merchant Bank, Ltd. --
32
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Japan The Fuji Bank Limited Japan Securities Depository Center
The Sumitomo Bank, Limited (JASDEC)
Jordan HSBC Bank Middle East (as delegate of The Hongkong --
and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking Corporation Limited --
Latvia A/s Hansabank --
Lebanon HSBC Bank Middle East (as delegate of The Hongkong --
and Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking Corporation Limited --
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse, ASA --
Oman HSBC Bank Middle East (as delegate of The Hongkong --
and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
33
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Palestine HSBC Bank Middle East (as delegate of The Hongkong --
and Shanghai Banking Corporation Limited)
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Portugal Banco Comercial Portugues --
Qatar HSBC Bank Middle East --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, AO, Moscow (as delegate --
of Credit Suisse First Boston, Zurich)
Singapore The Development Bank of Singapore Ltd. --
Slovak Republic Ceskoslovenska Obchodna Banka A.S. --
Slovenia Bank Austria Creditanstalt d.d. Ljubljana --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander Central Hispano, S.A. --
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited --
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Ltd. --
34
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust Company, London Branch --
Uruguay BankBoston N.A. --
Venezuela Citibank, N.A. --
Vietnam The Hongkong and Shanghai Banking Corporation Limited --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedelbank, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
00
XXXXX XXXXXX SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina -Caja de Valores S.A.
Australia -Austraclear Limited;
-Reserve Bank Information and Transfer System
Austria -Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium -Caisse Interprofessionnelle de Depots et de
Virement de Titres S.A.;
-Banque Nationale de Belgique
Brazil -Companhia Brasileira de Liquidacao e Custodia
Bulgaria -Central Depository AD
-Bulgarian National Bank
Canada -The Canadian Depository for Securities Limited
Chile -Deposito Central de Valores S.A.
People's Republic of China -Shanghai Securities Central Clearing and
Registration Corporation;
-Shenzhen Securities Central Clearing Co., Ltd.
Colombia -Deposito Centralizado de Valores
Costa Rica -Central de Valores S.A.
Croatia -Ministry of Finance; - National Bank of Croatia;
Sredisnja Depozitarna Agencija
Czech Republic -Stredisko cennych papiru;
-Czech National Bank
Denmark -Vaerdipapircentralen (The Danish Securities
Center)
Egypt -Misr Company for Clearing, Settlement, and Central
Depository
Estonia -Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities Depository
France -Societe Interprofessionnelle pour la Compensation
des Valeurs Mobilieres
36
COUNTRY MANDATORY DEPOSITORIES
Germany -The Deutscher Borse Clearing AG
Greece -The Central Securities Depository (Apothetirion
Titlon AE)
Hong Kong -The Central Clearing and Settlement System;
-Central Money Markets Unit
Hungary -Kozponti Elszamolohaz es Ertekatr (Budapest) Rt.
(KELER) [Mandatory for gov't Bonds and
dematerialized equities only; SSB does not use for
other securities]
India -The National Securities Depository Limited;
Central Depository Services India Limited
-Reserve Bank of India
Indonesia -Bank Indonesia
-PT Kustodian Sentral Efek Indonesia
Ireland -The Central Bank of Ireland, Securities Settlement Office
Israel -The Tel Aviv Stock Exchange Clearing House Ltd.
(TASE Clearinghouse)
-Bank of Israel (As part of the TASE Clearinghouse
system)
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Ivory Coast -Depositaire Central - Banque de Reglement
Jamaica -Jamaica Central Securities Depository
Japan -Bank of Japan Net System
Kenya -Central Bank of Kenya
Republic of Korea -Korea Securities Depository Corporation
Latvia -The Latvian Central Depository
Lebanon -The Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(MIDCLEAR) X.X.X.; - The Central Bank of Lebanon
----------
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
37
COUNTRY MANDATORY DEPOSITORIES
Lithuania -The Central Securities Depository of Lithuania
Malaysia -The Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities
Trading and Safekeeping Systems
Mauritius -The Central Depository & Settlement Co. Ltd.
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el
Deposito de Valores);
Morocco -Maroclear
The Netherlands -Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V. (NECIGEF)
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen (the Norwegian Registry of
Securities)
Oman -Muscat Securities Market Depository & Securities
Registration Company
Pakistan -Central Depository Company of Pakistan Limited;
State Bank of Pakistan
Palestine -The Palestine Stock Exchange
Peru -Caja de Valores y Liquidaciones; CAVALI ICLV S.A.
Philippines -The Philippines Central Depository Inc.
-The Registry of Scripless Securities (XXXX) of the
Bureau of the Treasury
Poland -The National Depository of Securities (Krajowy
Depozyt Papierow Wartooeciowych SA);
-Central Treasury Bills Registrar
Portugal -Central de Valores Mobiliarios
Qatar -Doha Securities Market
Romania -National Securities Clearing, Settlement and
Depository Co.;
-Bucharest Stock Exchange Registry Division;
-National Bank of Romania
----------
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
00
XXXXXXX XXXXXXXXX XXXXXXXXXXXX
Xxxxxxxxx -Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko cennych papierov SR Bratislava, a.s.;
-National Bank of Slovakia
Slovenia -Klirinsko Depotna Xxxxxx x.x.
South Africa -The Central Depository Limited; Strate Ltd.
Spain -Servicio de Compensacion y Liquidacion de Valores,
S.A.;
-Banco de Espana; Central de Anotaciones en Cuenta
Sri Lanka -Central Depository System (Pvt) Limited
Sweden -Vardepapperscentralen VPC AB (the Swedish Central
Securities Depository)
Switzerland -SIS SegaIntersettle
Taiwan - R.O.C. -The Taiwan Securities Central Depository Company,
Ltd.
Thailand -Thailand Securities Depository Company Limited
Tunisia -Societe Tunisienne Interprofessionelle de
Compensation et de Depot de Valeurs Mobilieres
Turkey -Takas ve Saklama Bankasi A.S. (TAKASBANK)
-Central Bank of Turkey
Ukraine -The National Bank of Ukraine
United Kingdom -The Bank of England, The Central Gilts Office; The
Central Moneymarkets Office
Venezuela -Central Bank of Venezuela
Zambia -XxXX Central Shares Depository Limited
-Bank of Zambia
----------
*Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
39
SCHEDULE C
The Guide to Custody in World An overview of safekeeping and settlement
Markets (annually) practices and procedures in each market in
which State Street Bank and Trust Company
offers custodial services.
Global Custody Network Review Information relating to the operating
(annually) history and structure of depositories and
subcustodians located in the markets in
which State Street Bank and Trust Company
offers custodial services, including
transnational depositories.
Global Legal Survey (annually) With respect to each market in which State
Street Bank and Trust Company offers
custodial services, opinions relating to
whether local law restricts (i) access of a
fund's independent public accountants to
books and records of a Foreign Sub-Custodian
or Foreign Securities System, (ii) the
Fund's ability to recover in the event of
bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities System,
(iii) the Fund's ability to recover in the
event of a loss by a Foreign Sub-Custodian
or Foreign Securities System, and (iv) the
ability of a foreign investor to convert
cash and cash equivalents to U.S. dollars.
Subcustodian Agreements (annually) Copies of the subcustodian contracts State
Street Bank and Trust Company has entered
into with each subcustodian in the markets
in which State Street Bank and Trust Company
offers subcustody services to its US mutual
fund clients.
Network Bulletins (weekly): Developments of interest to investors in the
markets in which State Street Bank and Trust
Company offers custodial services.
Foreign Custody Advisories With respect to markets in which State
(as necessary): Street Bank and Trust Company offers
custodial services which exhibit special
custody risks, developments which may impact
State Street's ability to deliver expected
levels of service.
40
SCHEDULE D
System Product Description
STATE STREET INSIGHT
STATE STREET InSight provides information delivery and on-line access to State
Street. STATE STREET InSight allows users a single point of entry into the many
views of data created by the diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor, Multicurrency horizon,
Securities Lending, Performance & Analytics can be accessed through STATE STREET
InSight. This Internet-enabled application is designed to run from a Web browser
and perform across low-speed data line or corporate high-speed backbones. STATE
STREET InSight also offers users a flexible toolset, including an ad-hoc query
function, a custom graphics package, a report designer, and a scheduling
capability. Data and reports offered through STATE STREET InSight will continue
to increase in direct proportion with the client roll out, as it is viewed as
the information delivery system that will grow with our clients.
41
AMENDMENT NUMBER 1 TO SCHEDULE I
WHEREAS, Security Equity Fund and SBL Fund (the "Funds") are parties to a
Custody Agreement (the "Agreement") dated April 28, 2000 with State Street Bank
and Trust Company on behalf of certain of their respective series; and
WHEREAS, the Board of Directors of the Funds at a meeting duly called and held
on May 5, 2000 voted to extend the Agreement to certain other series as
specified in Amendment Number 1 to Schedule I hereto; and
WHEREAS, Section 18 of the Agreement provides that it may be extended to other
series of the Funds by the written agreement of the parties;
NOW THEREFORE, the parties agree that the Agreement shall be extended to the
Series listed on Amendment Number 1 to Schedule I.
IN WITNESS WHEREOF, each of the parties have caused this instrument to be
executed in its name and behalf by its duly authorized representative as of May
5, 2000.
SBL FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
SECURITY EQUITY FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ XXXXXX X. XXXXXXXXX By: /s/ XXXXXX XXX
------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxx Xxx
Title: Vice President Title: Vice President
42
Series which adopted the Agreement on April 28, 2000
SBL FUND
- Series G (Large Cap Growth Series)
- Series L (Capital Growth Series)
- Series Q (Small Cap Value Series)
- Series T (Technology Series)
- Series W (Main Street Growth and Income Series)
SECURITY EQUITY FUND
- Large Cap Growth Series
- Technology Series
Series adopting the Agreement on May 5, 2000
SBL FUND
- Series D (Global Series)
- Series I (International Series)
- Series K (Global Strategic Income Series)
- Series M (Global Total Return Series)
- Series N (Managed Asset Allocation Series)
- Series O (Equity Income Series)
SECURITY EQUITY FUND
- Global Series
- International Series
43
AMENDMENT TO CUSTODIAN AGREEMENT
This Amendment to the Custodian Agreement is made as of June 29th, 2001 by
and between each of the registered investment companies listed on Exhibit A
hereto (each a "fund" and such fund or series of a fund hereinafter referred to
as the "Fund") and State Street Bank and Trust Company (the "Custodian").
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 State Street entered into a Custodian Agreement
dated as of April 28, 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. Sections 3 and 4 of the Contract are hereby deleted.
II. New Sections 3 and 4 of the Contract are hereby added, as of the effective
date of this Amendment, as set forth below.
SECTION 3. PROVISIONS RELATING TO RULE 17F-5
3.1. 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 in amounts deemed by Fund to be 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.
3.2. DELEGATION TO STATE STREET AS FOREIGN CUSTODY MANAGER. The Fund, by
resolution adopted by its Board of Directors (the "Board"), hereby delegates to
State Street, subject to Section (b) of Rule 17f-5, the responsibilities set
forth in this Section 3 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.
3.3. 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 3.6 hereof.
Upon the receipt by the Foreign Custody Manager of 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 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 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.
3.4. SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of Section 3, 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 have established a
system to monitor (i) the appropriateness of maintaining the Foreign Assets with
such Eligible Foreign Custodian and (ii) performance of 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 3.6 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of
this Section 3, 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.
3.6. 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 quarterly reports notifying the Board of any other material
change in the foreign custody arrangements of the Portfolios described in this
Section 3 after the occurrence of the material change.
3.7. 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.
3.8. 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.
3.9. 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 3.3 hereof shall govern the delegation to and
termination of State Street as Foreign Custody Manager of the Portfolios with
respect to designated countries.
3.10. 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.
3.11. STANDARD OF CARE. State Street agrees to exercise reasonable care,
prudence and diligence in performing the duties set forth in Section 3.10.
SECTION 4 PROVISIONS RELATING TO CUSTODY OF ASSETS HELD OUTSIDE THE UNITED
STATES
4.1. DEFINITIONS. Capitalized terms in this Section 4 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.
4.2. 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 be held separately from any assets of such Foreign Sub-Custodian
or of other customers of such Foreign Sub-Custodian.
4.3. 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.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. 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 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 Instructions
specifying the foreign securities to be delivered and naming the
person or persons to whom delivery of such securities shall be made.
4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of 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:
(i) upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by 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 Instructions
specifying the amount of such payment and naming the person or
persons to whom such payment is to be made.
4.4.3. 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 described on
Schedule C hereto with respect to custody and settlement practices in
countries in which State Street employs a Foreign Sub-Custodian 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.
4.5. 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.
4.6. 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.
4.7. 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.
4.8. SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Xxxxxxx 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.
4.9. 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 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.
4.10. 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.
4.11. 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 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.
4.12. 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.
III. 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 hereof, in the
event of any conflict between the provisions of Section 3 and Section 4
hereof, the provisions of Section 3 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.
SBL FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
SECURITY EQUITY FUND
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ XXXXXX X. XXXXXXXXX By: /s/ XXXXXXX X. XXXXXXX
------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Sr. Vice President Title: Vice President
EXHIBIT A
SBL FUND
Series G (Large Cap Growth Series)
Series L (Capital Growth Series)
Series Q (Small Cap Value Series)
Series T (Technology Series)
Series W (Main Street Growth and Income Series)
Series D (Global Series)
Series I (International Series)
Series K (Global Strategic Income Series)
Series M (Global Total Return Series)
Series N (Managed Asset Allocation Series)
Series O (Equity Income Series)
SECURITY EQUITY FUND
Large Cap Growth Series
Technology Series
Global Series
International Series
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE FOREIGN SUBCUSTODIANS
COUNTRY ELIGIBLE FOREIGN SUBCUSTODIAN
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Canada State Street Trust Company Canada
Chile BankBoston, N.A.
People's Republic of China The Hongkong and Shanghai Banking Corporation
Limited, Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus The Cyprus Popular Bank Ltd.
Czech Republic Eeskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE FOREIGN SUBCUSTODIANS
COUNTRY ELIGIBLE FOREIGN SUBCUSTODIAN
Ecuador Citibank, N.A.
Egypt Egyptian British Bank S.A.E.
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Estonia Hansabank
Finland Xxxxxx Bank Plc.
France BNP Paribas, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Hong Kong Standard Chartered Bank
Hungary Citibank Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
The Hongkong and Shanghai Banking Corporation
Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas, Italian Branch
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
Japan The Fuji Bank, Limited
The Sumitomo Bank, Limited
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE FOREIGN SUBCUSTODIANS
COUNTRY ELIGIBLE FOREIGN SUBCUSTODIAN
Jordan HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
Kenya Barclays Bank of Kenya Limited
Republic of Korea The Hongkong and Shanghai Banking Corporation
Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mauritius The Hongkong and Shanghai Banking Corporation
Limited
Mexico Citibank Mexico, S.A.
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited
Netherlands Fortis Bank (Nederland) N.V.
New Zealand ANZ Banking Group (New Zealand) Limited
Nigeria Stanbic Merchant Bank Nigeria Limited
Norway Christiania Bank og Kreditkasse ASA
Oman HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Pakistan Deutsche Bank AG
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE FOREIGN SUBCUSTODIANS
COUNTRY ELIGIBLE FOREIGN SUBCUSTODIAN
Palestine HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Citibank (Poland) S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking
Corporation Limited)
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO - Moscow
(as delegate of Credit Suisse First
Boston - Zurich)
Singapore The Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka The Hongkong and Shanghai Banking Corporation
Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE FOREIGN SUBCUSTODIANS
COUNTRY ELIGIBLE FOREIGN SUBCUSTODIAN
Thailand Standard Chartered Bank
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ukraine ING Bank Ukraine
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation
Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE SECURITIES DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY ELIGIBLE SECURITIES DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depots et de
Virements de Titres, S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia
(SELIC)
Central de Custodia e de Liquidacao Financeira de
Titulos Privados (CETIP)
Bulgaria Central Depository AD
Bulgarian National Bank
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic of China Shanghai Securities Central Clearing & Registration
Corporation
Shenzhen Securities Central Clearing Co., Ltd.
Colombia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE SECURITIES DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY ELIGIBLE SECURITIES DEPOSITORIES
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Societe Interprofessionnelle pour la Compensation
des Valeurs Mobilieres
Germany Clearstream Banking AG, Frankfurt
Greece Bank of Greece, System for Monitoring Transactions
in Securities in Book-Entry Form
Apothetirion Titlon AE - Central Securities
Depository
Hong Kong Central Clearing and Settlement System
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
India National Securities Depository Limited
Central Depository Services India Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd.
(TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE SECURITIES DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY ELIGIBLE SECURITIES DEPOSITORIES
Jamaica Jamaica Central Securities Depository
Japan Japan Securities Depository Center (JASDEC)
Bank of Japan Net System
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia, Scripless Securities Trading
and Safekeeping System
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
Mexico S.D. INDEVAL (Instituto para el Deposito de
Valores)
Morocco Maroclear
Netherlands Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V. (NECIGEF)
New Zealand New Zealand Central Securities Depository Limited
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central Securities
Depository)
Oman Muscat Depository & Securities Registration
Company, SAOC
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE SECURITIES DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY ELIGIBLE SECURITIES DEPOSITORIES
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a department
of the Palestine Stock Exchange
Peru Caja de Valores y Liquidaciones, Institucion de
Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities(XXXX) of the
Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych SA)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios
Qatar Central Clearing and Registration (CCR),
a department of the Doha Securities Market
Romania National Securities Clearing, Settlement and
Depository Company
Bucharest Stock Exchange Registry Division
National Bank of Romania
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko cennych papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic (STRATE) Ltd.
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
ELIGIBLE SECURITIES DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY ELIGIBLE SECURITIES DEPOSITORIES
Spain Servicio de Compensacion y Liquidacion de Valores,
S.A.
Banco de Espana, Central de Anotaciones en Cuenta
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Co., Ltd.
Thailand Thailand Securities Depository Company Limited
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs Mobilieres
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
United Kingdom Central Gilts Office and Central Moneymarkets
Office
Venezuela Banco Central de Venezuela
Zambia XxXX Central Shares Depository Limited
Bank of Zambia
TRANSNATIONAL
Euroclear
Clearstream Banking AG
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
(FREQUENCY)
The Guide to Custody in World Markets An overview of safekeeping and
settlement practices and (annually)
procedures in each market in which
State Street Bank and Trust Company
offers custodial services.
Global Custody Network Review Information relating to the operating
(annually) history and structure of depositories
and subcustodians located in the
markets in which State Street Bank and
Trust Company offers custodial
services, including transnational
depositories.
Global Legal Survey With respect to each market in which
(annually) State Street Bank and Trust Company
offers custodial services, opinions
relating to whether local law restricts
(i) access of a fund's independent
public accountants to books and records
of a Foreign Sub-Custodian or Foreign
Securities System, (ii) the Fund's
ability to recover in the event of
bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities
System, (iii) the Fund's ability to
recover in the event of a loss by a
Foreign Sub-Custodian or Foreign
Securities System, and (iv) the ability
of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the subcustodian contracts
(annually) State Street Bank and Trust Company has
entered into with each subcustodian in
the markets in which State Street Bank
and Trust Company offers subcustody
services to its US mutual fund clients.
Network Bulletins (weekly): Developments of interest to investors
in the markets in which State Street
Bank and Trust Company offers custodial
services.
Foreign Custody Advisories With respect to markets in which State
(as necessary): Street Bank and Trust Company offers
custodial services which exhibit
special custody risks, developments
which may impact State Street's ability
to deliver expected levels of service.
AMENDMENT TO CUSTODY AGREEMENT
This Amendment to the Custodian Agreement is made as of November 8, 2002
by the Funds and State Street Bank and Trust Company (the "State Street" or the
"Custodian"). Capitalized terms used in this Amendment without definition shall
have the respective meanings given to such terms in the Agreement referred to
below.
WHEREAS, the Funds and State Street entered into a Custodian Agreement
dated April 28, 2000, as amended (the "Agreement"); and
WHEREAS, the Funds and State Street desire to amend and restate Section 1
of the Agreement to reflect the fact that a Portfolio of a Fund might have more
than one custodian; and
WHEREAS, the parties wish to add other Portfolios of the Funds to the
Agreement and Section 18 of the Agreement provides that it may be extended to
other Portfolios by the written agreement of the parties.
NOW THEREFORE, in consideration of the foregoing, and the mutual covenants
and agreements hereinafter contained, the parties hereby agree to amend the
Agreement, pursuant to the terms thereof, as follows:
I. Section 1 of the Agreement Contract is hereby deleted.
II. New Section 1 is hereby added to the Agreement, as set forth below.
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
Each Fund hereby employs the Custodian as the custodian of the assets of its
respective Portfolios, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("DOMESTIC SECURITIES") and securities it desires to be held outside the United
States ("FOREIGN SECURITIES"). Each Fund on behalf of its respective
Portfolio(s) agrees to deliver to the Custodian (a) that portion of the
securities and cash of the Portfolios designated by the Fund to be held by the
Custodian, (b) all payments of income, payments of principal or capital
distributions received by it with respect to such securities owned by the
Portfolio(s) from time to time, and (c) such cash consideration received by the
Fund for new or treasury shares of beneficial interest of the Fund representing
interests in the Portfolios ("SHARES") as the Fund may desire to be held by the
Custodian. The Custodian shall not be responsible for any property of a
Portfolio held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 6
hereof), the Custodian shall on behalf of the applicable Portfolio(s) from time
to time employ one or more sub-custodians located in the United States, but only
in accordance with an applicable vote by the Board of Directors of the Fund (the
"BOARD") on behalf of the applicable Portfolio(s), and provided that the
Custodian shall have no more or less responsibility or liability to the Fund on
account of any actions or omissions of any sub-custodian so employed than if the
action or omission was that of the Custodian itself. The Custodian may employ as
sub-custodian for the Fund's foreign securities on behalf of the applicable
Portfolio(s) the foreign banking institutions and foreign securities
depositories designated
in Schedules A and B hereto but only in accordance with the applicable
provisions of Sections 3 and 4.
III. The existing Schedule A is hereby deleted and replaced with the Schedule A
which accompanies this Amendment.
IV. Except as specifically superseded or modified herein, the terms and
provisions of the Agreement shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Agreement
and this Amendment, the terms of this Amendment 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.
SBL FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
SECURITY EQUITY FUND FUND SIGNATURE ATTESTED TO BY:
By: /s/ XXXXX X. XXXXXXX By: /s/ XXX X. XXX
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx X. Xxx
Title: President Title: Secretary
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: /s/ XXXXXX X. XXXXXXXXX By: /s/ B. Z. XXXXXXX
------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President Title: Vice President
SCHEDULE A
SBL FUND
- Series G (Large Cap Growth Series)
- Series Q (Small Cap Value Series)
- Series T (Technology Series)
- Series W (Main Street Growth and Income Series)
- Series D (Global Series)
- Series I (International Series)
- Series N (Managed Asset Allocation Series)
- Series O (Equity Income Series)
- Series Z (Alpha Opportunity Series)
- Series P (High Yield Series )
SECURITY EQUITY FUND
- Large Cap Growth Series
- Technology Series
- Global Series
- International Series
- Alpha Opportunity Series
