EXHIBIT (j)
CUSTODY AGREEMENT
CUSTODIAN CONTRACT
This Contract between USLIFE Income Fund, Inc., a corporation organized and
existing under the laws of Maryland, having its principal place of business at
0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000, hereinafter called the "Fund", and
State Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
hereinafter called the "Custodian".
WITNESSETH:
That in consideration of the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It.
The Fund hereby employs the Custodian as the custodian of its assets to be
held in the United States pursuant to the provisions of the Fund's Articles of
Incorporation (the "Articles"). The Fund agrees to deliver to the Custodian all
securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund from time to time, and the cash consideration received by it
for such new or treasury shares of capital stock of the Fund ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
Upon receipt of Proper Instructions (as such term is defined Section 3
below), the Custodian shall 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 of Directors") 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 any
such sub-custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States.
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property of the Fund to be held in the
United States, including all securities owned by the Fund, 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
"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.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper System.
account (the "Direct Paper System Account") only upon receipt of Proper
Instructions (as such term is defined Section 3 below), which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
(a) Upon sale of such securities for the account of the Fund and receipt of
payment therefore;
(b) Upon the receipt of payment in connection with any repurchase agreement
related to such securities entered into by the Fund;
(c) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.8 hereof;
(d) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
(e) T o 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;
(f) To the issuer thereof, or its agent, for transfer into the name of the
Fund 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;
(g) Upon the sale of such securities for the account of the Fund, 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 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;
(h) 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;
(i) 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;
(j) For delivery in connection with any loans of securities made by the
Fund, but only against receipt of adequate collateral as agreed upon from time
to time by the Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, 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 Fund prior to the
receipt of such collateral;
(k) For delivery as security in connection with any borrowing by the Fund
requiring a pledge of assets by the Fund, but only against receipt of amounts
borrowed;
(l) For delivery in accordance with the provisions of any agreement among
the Fund, 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 Fund;
(m) For delivery in accordance with the provisions of any agreement among
the Fund, 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 and/or any contract market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund; or
(n) For any other proper purpose, but only upon receipt of, in addition to
Proper Instructions (as such term is defined in Section 3 below), a certified
copy of a resolution of the Board of Directors or of the Fund's Executive
Committee signed by an officer and certified by the Secretary or an Assistant
Secretary thereof (a "Certified Resolution"), specifying the securities of the
Fund 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.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or in the
name of any nominee of the Fund or of any nominee of the Custodian which nominee
shall be assigned exclusively to the Fund, 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 Fund, 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 Fund under the terms of
this Contract 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.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United Stated in the name of the Fund, subject only
to draft or order by the Custodian acting pursuant to the terms of this
Contract, 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 Fund, other than
cash maintained by the Fund 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 the Fund 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 be approved by vote of a majority of the Board of Directors. Such funds
shall be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
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 the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to domestic bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent thereof
and shal1 credit such income, as collected, to the Fund'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 the Fund on securities loaned pursuant to the provisions
of Section 2.2 (j ) shall be the responsibility of the Fund. The Custodian will
have no duty or responsibility in connection therewith, other than to provide
the Fund with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Fund is properly entitled.
2.6 Payment of Fund Monies. Upon receipt of Proper Instructions (as such
term is defined in Section 3 below), which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall payout monies of the Fund
in the following cases only:
(a) Upon the purchase of domestic securities, options, futures contracts or
options on futures contracts for the account of the Fund 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 Fund
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
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 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 Fund of securities
owned by the Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund or (e) for transfer to a
time deposit account of the Fund in any bank or thrift institution; such
transfer may be effected prior to receipt of a continuation from a broker and/or
the applicable bank pursuant to Proper Instructions (as such term is defined in
Section 3 below);
(b) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
(c) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the Fund:
interest, taxes, management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
(d) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
(e) For payment of the amount of dividends on Shares received in respect of
securities sold short; or
(f) For any other proper purpose, but only upon receipt of, in addition to
Proper Instructions (as such term is defined in Section 3 below), a Certified
Resolution 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.
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.
2.8 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by the Fund in a Securities System in
accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
(a) The Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account of the Custodian in
the Securities System (a "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;
(b) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
(c) The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Securities System
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund. The Custodian
shall transfer securities sold for the account of the Fund upon (i) receipt of
advice from the Securities System that payment for such securities has been
transferred to the 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 Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written advice or
notice and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the account of
the Fund;
(d) The Custodian shall provide the Fund with any report obtained by the
Custodian on the Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited in the Securities
System;
(e) The Custodian shall have received the initial or annual certificate
required by Section 12 hereof; and
(f) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of the 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 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 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 Fund has not been made whole for any such loss or
damage.
2.9 Fund Assets Held in the Direct Paper System. The Custodian may deposit
and/or maintain securities owned by the Fund in the Direct Paper System subject
to the following provisions:
(a) No transaction relating to securities in the Direct Paper System will
be effected in the absence of Proper Instructions (as such term is defined in
Section 3 below);
(b) The Custodian may keep securities of the Fund in the Direct Paper
System only if such securities are represented in the Direct Paper System
Account which Direct Paper System Account shall not
include any assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
(c) The records of the Custodian with respect to securities of the Fund
which are maintained in the Direct Paper System shall identify by book-entry
those securities belonging to the Fund;
(d) The Custodian shall pay for securities purchased for the account of the
Fund 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 Fund. The Custodian
shall transfer securities sold for the account of the Fund upon the making of an
entry on the records of the Custodian to reflect such transfer and receipt of
payment for the account of the Fund;
(e) The Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund, 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 copies of daily transaction sheets reflecting each day's transaction
in the Securities System for the account of the Fund; and
(f) The Custodian shall provide the Fund with any report on its system of
internal accounting control as the Fund may reasonably request from time to
time.
2.10 Segregated Account. The Custodian shall upon receipt of Proper
Instructions (as such term is defined Section 3 below) establish and maintain a
segregated account or accounts for and on behalf of the Fund, into which account
or accounts may be transferred cash and/or securities, including securities
maintained in an account by the Custodian pursuant to Section 2.8 hereof, (i) in
accordance with the provisions of any agreement among the Fund, 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 Commodity Futures
Trading Commission or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or government securities in connection with options purchased, sold or written
by the Fund or commodity futures contracts or options thereon purchased or sold
by the Fund, (iii) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper purposes, but only upon receipt of, in
addition to Proper Instructions (as such term is defined Section 3 below), a
Certified
Resolution setting forth the purpose or purposes of such segregated account and
declaring such purpose to be a proper corporate purpose.
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 the Fund held by it and in connection with transfers of
such securities.
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
Fund or a nominee of the Fund, all proxies, without indication of the manner in
which such proxies are to be voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices relating to such
securities.
2.13 Communications Relating to Fund Securities. Subject to the provisions
of Section 2.3, the Custodian shall transmit promptly to the Fund 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 and the maturity
of futures contracts purchased or sold by the Fund) received by the Custodian
from issuers of the securities being held for the Fund. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the Fund 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 Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Fund shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
3. Proper Instructions.
Proper Instructions, as such term is used throughout this Contract, means a
writing signed or initialed by one or more person or persons as the Board of
Directors 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 confirn1ed in writing. Upon receipt of a certificate of
the Secretary or an Assistant Secretary as to the authorization by the Board of
Directors accompanied by a detailed
description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors
and the Custodian are satisfied that such procedures afford adequate safeguards
for the Fund's assets. 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.
4. Actions Permitted without Express Authority.
The Custodian may in its discretion, without express authority from the
Fund:
(a) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund;
(b) surrender securities in temporary form for securities in definitive
form;
(c) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
(d) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Fund except as otherwise directed by the Board of
Directors.
5. Evidence of Authority.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper 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 Certified Resolution as conclusive evidence
(a) of the authority of any person to act in accordance with such vote or (b) of
any determination or of any action by the Board of Directors pursuant to the
Articles as described in such vote, and such vote may be considered as in full
force and effect until receipt by the Custodian of written notice to the
contrary.
6. 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 of Directors to keep the books of
account of the Fund and/or compute the net asset value per Share. If so
directed, the Custodian shall calculate weekly the net income related to
domestic Fund assets held hereunder as described in the Fund's currently
effective prospectus, shall advise the Fund weekly 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 Fund periodically of the division of such net income among its
various components.
7. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract 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, employees or
agents of the Fund and employees and agents of the Securities and Exchange
Commission. The Custodian shall, at the Fund's request, supply, the Fund with a
tabulation of securities owned by the Fund and held by the Custodian and shall,
when requested to do so by the Fund and for such compensation as shall be agreed
upon between the Fund and the Custodian, include certificate numbers in such
tabulations.
8. Opinion of Fund's Independent Accountant.
The Custodian shall take all reasonable action, as the Fund 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-2 and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements thereof.
9. Reports to Fund by Independent Public Accountants.
The Custodian shall provide to the Fund, at such times as the Fund may
reasonably require, reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
futures contracts and options on future contracts, including securities
deposited and/or maintained in a Securities System, relating to the services
provided by the Custodian under this Contract; 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.
10. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
11. Responsibility of Custodian.
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 Contract 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 held to the exercise of
reasonable care in carrying out the provisions of this Contract, but 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. It shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for the Fund) on
all matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, 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 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 in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund 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 the Fund's assets to the
extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
12. Effective Period, Termination and Amendment.
This Contract 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 thirty (30)
days after the date of such delivery or mailing; provided, however that the
Custodian shall not act under Section 2.8 hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the Board of
Directors has approved the initial use of a particular Securities System, as
required by Rule 17f-4 under the 1940 Act and that the Custodian shall not act
under Section 2.9 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Directors has approved
the initial use of the Direct Paper System; provided further, however, that the
Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Articles and
further provided, that the Fund may at any time by action of the Board of
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract 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 Contract, the Fund 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.
13. Successor Custodian.
If a successor custodian shall be appointed by the Board of Directors 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 and other assets of the Fund then held by it hereunder and shall
transfer to an account of the successor custodian all of the Fund's securities
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 vote.
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 and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Fund's securities held in any Securities System, Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
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 Contract relating to the duties
and obligations of the Custodian shall remain in full force and effect.
14. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian and the
Fund, may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. 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 Articles of the Fund. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Contract.
15. Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
16. Prior Contracts.
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
17. 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 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: USLIFE Income Fund, Inc. c/x X XXXX
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx, Treasurer Telephone: (000) 000-0000 Telecopy:
(000) 000-0000
To the Custodian: State Street Bank and Trust Company Insurance and Bank
Services Division 000 Xxxxxxxx Xxxx -XXX/0X
Xxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Vice President 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.
18. Shareholder Communications Election.
Securities and Exchange Commission 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
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.
19. Reproduction of Documents.
This Agreement and all schedules, 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.
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 the thirteenth day of April, 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx
Title: Executive Vice President
Date: April 21, 1998
CUSTODIAN SIGNATURE ATTESTED TO BY:
/s/ Xxxxxxxxx X. Poster
Title: Executive Vice President
Title: Vice President and Associate Counsel
Date: April 21, 1998
USLIFE INCOME FUND, INC.
By: /s/ Xxxxxx Xxxxxx
Title: President
Date: April 10, 1998
FUND SIGNATURE ATTESTED TO BY:
By: /s/ Xxxx X. Xxxxxx
Title: Assistant Secretary
Date: April 10, 1998
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
Addendum to the Custodian Contract between USLIFE Income Fund, Inc. (the
"Customer") and State Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets of
the Customer pursuant to a certain Custodian Contract dated as of April 19, 1998
(the "Custodian Contract");
WHEREAS, State Street has developed and utilizes proprietary accounting and
other systems, including State Street's proprietary Multicurrency HORIZON
Accounting System, in its role as custodian of the Customer, and maintains
certain Customer-related data ("Customer Data") in databases under the control
and ownership of State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to the Customer certain Data Access
Services solely for the benefit of the Customer, and intends to provide
additional services, consistent with the terms and conditions of this Addendum.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
I. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Addendum, State
Street hereby agrees to provide the Customer with access to State Street's
Multicurrency HORIZON Accounting System and such other information systems
(collectively, the "System") as may be selected and described in Attachment A,
on a remote basis for the purpose of obtaining reports and information, solely
on computer hardware, system software and telecommunication links as listed in
Attachment B (the "Designated Configuration") of the Customer, or certain third
parties approved by State Street that serve as investment advisors or investment
managers of the Customer (the "Investment Advisor"), and solely with respect to
the Customer or on any designated substitute or back-up equipment configuration
with State Street's written consent, such consent not to be unreasonably
withheld.
b. Data Access Services. State Street agrees to make available to the
Customer the Data Access Services subject to the terms and conditions of this
Addendum and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of the Customer to originate
electronic instructions to State Street on behalf of the Customer in order to
(i) effect the transfer or movement of cash or securities held under custody by
State Street or (ii) transmit accounting or other information (such transactions
are referred to herein as "Client Originated Electronic Financial
Instructions"), and (iii) access data for the purpose of reporting and analysis,
shall be deemed to be Data Access Services for purposes of this Addendum.
c. Additional Services. State Street may from time to time agree to make
available to the Customer additional Systems that are not described in the
attachments to this Addendum. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Addendum shall govern, the Customer's access to and use of any additional System
made available by State Street and/or accessed by the Customer.
2. NO USE OF THIRD-PARTY SYSTEMS-LEVEL SOFTWARE
State Street and the Customer acknowledge that in connection with the Data
Access Services provided under this Addendum, the Customer will have access,
through the Data Access Services, to Customer Data and to functions of State
Street's proprietary systems; provided, however that in no event will the
Customer have direct access to any third party systems-level software that
retrieves data for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment: Designated Location. The System and the Data
Access Services shall be used and accessed solely on and through the Designated
Configuration at the offices of the Customer or the Investment Advisor located
in Houston ("Designated Location").
b. Designated Configuration: Trained Personnel. State Street shall be
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and the Customer agree
that each will engage or retain the services of trained personnel to enable both
parties to perform their respective obligations under this Addendum. State
Street agrees to use commercially reasonable efforts to maintain the System so
that it remains serviceable, provided, however, that State Street does not
guarantee or assure uninterrupted remote access use of the System.
c. Scope of Use. The Customer will use the System and the Data Access
Services only for the processing of securities transactions, the keeping of
books of account for the Customer and accessing data for purposes of reporting
and analysis. The Customer shall not, and shall cause its employees and agents
not to (i) permit any third party to use the System or the Data Access Services,
(ii) sell, rent, license or otherwise use the System or the Data Access Services
in the operation of a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the Data Access Services
for any fund, trust or other investment vehicle without the prior written
consent of State Street, (iv) allow access to the System or the Data Access
Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow or cause any
information (other than portfolio holdings, valuations of portfolio holdings,
and other information reasonably necessary for the management or distribution of
the assets of the Customer) transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Data Access Services to be redistributed or retransmitted to another
computer, terminal or other device for other than use for or on behalf of the
Customer or (vi) modify the System in any way, including without limitation,
developing any software for or attaching any devices or computer programs to any
equipment, system, software or database which forms a part of or is resident on
the Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
System shutdown, the Customer's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, the Customer may use any back-up site
included in the Designated Configuration or any other back- up site agreed to by
State Street, which agreement will not be unreasonably withheld. The Customer
may secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street, the
Customer shall not modify, enhance or otherwise create derivative works based
upon the System, nor shall the Customer reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
g. Security Procedures. The Customer shall comply with data 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 on a remote basis and to
access the Data Access Services. The Customer shall have access only to the
Customer Data and authorized transactions agreed upon from time to time by State
Street and, upon notice from State Street, the Customer shall discontinue remote
use of the System and access to Data Access Services for any security reasons
cited by State Street; provided, that, in such event, State Street shall, for a
period not less than 180 days (or such other shorter period specified by the
Customer) after such discontinuance, assume responsibility to provide accounting
services under the terms of the Custodian Contract.
h. Inspections. State Street shall have the right to inspect the use of the
System and the Data Access Services by the Customer and the
Investment Advisor to ensure compliance with this Addendum. The on-site
inspections shall be upon prior written notice to the Customer and the
Investment Advisor and at reasonably convenient times and frequencies so as not
to result in an unreasonable disruption of the Customer's or the Investment
Advisor's business.
4. PROPRIETARY INFORMATION
a. Proprietary Information. The Customer acknowledges and State Street
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Customer by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street.
Any and all such information provided by State Street to the Customer shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Customer agrees that it will hold such
Proprietary Information in the strictest confidence and secure and protect it in
a manner consistent with its own procedures for the protection of its own
confidential information and to take appropriate action by instruction or
agreement with its employees who are permitted access to the Proprietary
Information to satisfy its obligations hereunder. The Customer further
acknowledges that State Street shall not be required to provide the Investment
Advisor with access to the System unless it has first received from the
Investment Advisor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C to this Addendum. The Customer also
acknowledges that State Street shall not be required to provide Customer's
independent auditor with access to the System unless it has first received from
such independent auditor an undertaking with respect to State Street's
Proprietary Information in the form of Attachment C-l to this Addendum. The
Customer shall use all commercially reasonable efforts to assist State Street in
identifying and preventing any unauthorized use, copying or disclosure of the
Proprietary Information or any portions thereof or any of the logic, formats or
designs contained therein.
b. Cooperation. Without limitation of the foregoing, the Customer shall
advise State Street immediately in the event the Customer learns or has reason
to believe that any person to whom the Customer has given access to the
Proprietary Information, or any portion thereof, has violated or intends to
violate the terms of this Addendum, and the Customer will, at its expense,
co-operate with State Street in seeking injunctive or other equitable relief in
the name of the Customer or State Street against any such person.
c. Injunctive Relief. The Customer 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. In addition, 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.
d. Survival. The provisions of this Section 4 shall survive the termination
of this Addendum.
5. LIMITATION ON LIABILITY
a. Limitation on Amount and Time for Bringing Action. The Customer agrees
that any liability of State Street to the Customer or any third party arising
out of State Street's provision of Data Access Services or the System under this
Addendum shall be limited to the amount paid by the Customer for the preceding
24 months for such services. In no event shall State Street be liable to the
Customer or any other party for any special, indirect, punitive or consequential
damages even if advised of the possibility of such damages. No action,
regardless of form, arising out of this Addendum may be brought by the Customer
more than two years after the Customer has knowledge that the cause of action
has arisen.
b. Limited Warranties. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE MADE BY STATE STREET.
c. Third-Party Data. Organizations from which State Street may obtain
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and the Customer, the
Customer shall be solely responsible for the accuracy of any accounting
statements or reports produced using the Data Access Services and the System and
the conformity thereof with any requirements of law.
e. Force Majeure. Neither party shall be liable for any costs or damages
due to delay or nonperformance under this Addendum arising out of any cause or
event beyond such party's control, including without limitation, cessation of
services hereunder or any damages resulting therefrom to the other party, or the
Customer as a result of work stoppage, power or other mechanical failure,
computer virus, natural disaster, governmental action, or communication
disruption.
6. INDEMNIFICATION
The Customer agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Customer of the Data Access Services or the System, including
any loss incurred by State Street resulting from a security breach at the
Designated Location or committed by the Customer's employees or agents or the
Investment Advisor and (ii) any loss resulting from incorrect Client Originated
Electronic Financial Instructions. State Street shall be entitled to rely on the
validity and authenticity of Client Originated Electronic Financial Instructions
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by State Street
from time to time.
7. FEES
Fees and charges for the use of the System and the Data Access Services, if
any, and related payment terms shall be as set forth in the fee schedule in
effect from time to time between the parties related to the Custodian Contract
(the "Fee Schedule"). Any tariffs, duties or taxes imposed or levied by any
government or governmental agency by reason of the transactions contemplated by
this Addendum, including, without limitation, federal, state and local taxes,
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street) shall be
borne by the Customer. Any claimed exemption from such tariffs, duties or taxes
shall be supported by proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated State
Street training facility or at the Designated Location, to the Customer's
personnel in connection with the use of the System on the Designated
Configuration. The Customer agrees that it will set aside, during regular
business hours or at other times agreed upon by both parties, sufficient time to
enable all operators of the System and the Data Access Services, designated by
the Customer, to receive the training offered by State Street pursuant to this
Addendum.
b. Installation and Conversion. State Street shall be responsible for the
technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. The Customer shall have the fo1lowing responsibilities
in connection with Installation and Conversion of the System:
(i) The Customer shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the Data Access
Services at the Designated Location.
(ii) State Street and the Customer each agree that they will assign
qualified personnel to actively participate during the Installation and
Conversion phase of the System implementation to enable both parties to
perform their respective obligations under this Addendum.
9. SUPPORT
During the term of this Addendum, State Street agrees to provide the
support services set out in Attachment D to this Addendum.
10. TERM OF ADDENDUM
a. Term of Addendum. This Addendum shall become effective simultaneously
with State Street's execution of the Custodian Contract and shall remain in full
force and effect until terminated as herein provided.
b. Termination of Addendum. Either party may terminate this Addendum (i)
for any reason by giving the other party at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty days' notice in the case of notice from the Customer to State
Street of termination; or (ii) immediately for failure of the other party to
comply with any material term and condition of the Addendum by giving the other
party written notice of termination. In the event the Customer shall cease doing
business, sha1l become subject to proceedings under the bankruptcy laws (other
than a petition for reorganization or similar proceeding) or shall be
adjudicated bankrupt, this Addendum and the rights granted hereunder sha1l, at
the option of State Street, immediately terminate with notice to the Customer.
This Addendum shall in any event terminate as to any Customer within 90 days
after the termination of the Custodian Contract applicable to such Customer.
c. Termination of the Right to Use. Upon termination of this Addendum for
any reason, any right to use the System and access to the Data Access Services
shall terminate and the Customer shall immediately cease use of the System and
the Data Access Services. Immediately upon termination of this Addendum for any
reason, the Customer shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either party terminates this Addendum or the Custodian Contract
for any reason other than the Customer's breach, State Street shall provide the
Data Access Services for a period of time and at a price to be agreed upon by
the parties.
11. MISCELLANEOUS
a. Assignment: Successors. This Addendum and the rights and obligations of
the Customer and State Street hereunder shall not be assigned by either party
without the prior written consent of the other party, except that State Street
may assign this Addendum to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by, or under common control with
State Street.
b. Survival. All provisions regarding indemnification, warranty, liability
and limits thereon, and confidentiality and/or protection of proprietary rights
and trade secrets shall survive the termination of this Addendum.
c. Entire Contract. This Addendum and the attachments hereto constitute the
entire understanding of the parties hereto with respect to the Data Access
Services and the use of the System and supersedes any and all prior or
contemporaneous representations or agreements, whether oral or written, between
the parties as such may relate to the Data Access Services or the System, and
cannot be modified or altered except in a writing duly executed by the parties.
This Addendum is not intended to supersede or modify the duties and liabilities
of the parties hereto under the Custodian Contract or any other agreement
between the parties hereto except to the extent that any such agreement
specifically refers to the Data Access Services or the System. No single waiver
of any right hereunder shall be deemed to be a continuing waiver.
d. Severability. If any provision or provisions of this Addendum shall be
held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Addendum shall be interpreted and construed in
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
ATTACHMENT A
to
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
by and between
USLIFE INCOME FUND, INC. AND STATE STREET BANK AND TRUST COMPANY
Multicurrency HORIZON Accounting System Product Description
X The Multicurrency HORIZON Accounting System is designed to provide lot level
portfolio and general ledger accounting for SEC and ERISA type requirements and
includes the following services: 1) recording of general ledger entries; 2)
calculation of daily income and expense; 3) reconciliation of daily activity
with the trial balance, and 4) appropriate automated feeding mechanisms to (i)
domestic and international settlement systems, (ii) daily, weekly and monthly
evaluation services, (iii) portfolio performance and analytic services, (iv)
customer's internal computing systems and (v) various State Street provided
information services products.
GlobalQuest is designed to provide customer access to the following
information maintained on The Multicurrency HORIZON Accounting System: 1) cash
transactions and balances; 2) purchases and sales; 3) income receivables; 4) tax
refund receivables; 5) daily priced positions; 6) open trades; 7) settlement
status; 8) foreign exchange transactions; 9) trade history, and 10) daily,
weekly and monthly evaluation services.
X HORIZON Gateway:. HORIZON Gateway provides customers with the ability to (i)
generate reports using information maintained on the Multicurrency HORIZON
Accounting System which may be viewed or printed at the customer's location;
(ii) extract and download data from the Multicurrency HORIZON Accounting System;
and (iii) access previous day and historical data. The fo1lowing information
which may be accessed for these purposes: I) holdings; 2) holdings pricing; 3)
transactions, 4) open trades; 5) income; 6) general ledger and 7) cash.
XxXxXx is designed to provide the customer with the ability to prepare its
own financial reports by permitting the customer to access customer information
maintained on the Multicurrency HORIZON Accounting System, to organize such
information in a flexible reporting format and to have such reports printed on
the customer's desktop or by its printing provider.
State Street Interchange. State Street Interchange is an open information
delivery architecture wherein proprietary communication products, data formats
and workstation tools are replaced by industry standards and is designed to
enable the connection of State Street s network to customer networks, thereby
facilitating the sharing of information.
ATTACHMENT B
to
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
by and between
US LIFE INCOME FUND, INC. AND STATE STREET BANK AND TRUST COMPANY
ATTACHMENT C
to
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
by and between
USLIFE INCOME FUND, INC. AND STATE STREET BANK AND TRUST COMPANY
Undertaking
The undersigned understands that in the course of its employment as
Investment Advisor to USLIFE Income Fund, Inc. (the "Customer") it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON Accounting System and other information systems (collectively, the
"System").
The undersigned acknowledges that the System and the databases, computer
programs, screen formats, report formats, interactive design techniques,
documentation and other information made available to the undersigned by State
Street as part of the Data Access Services provided to the Customer and through
the use of the System constitute copyrighted, trade secret, or other proprietary
information of substantial value to State Street. Any and all such information
provided by State Street to the Undersigned shall be deemed proprietary and
confidential information of State Street (hereinafter "Proprietary
Information"). The undersigned agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder.
The undersigned will not attempt to intercept data, gain access to data in
transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System and
access to the Data Access Services shall terminate and the undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ Normal Xxxxxx
Title: President
Date: Apri1 10, 1998
ATTACHMENT D
to
DATA ACCESS SERVICES ADDENDUM TO CUSTODIAN CONTRACT
by and between
USLIFE INCOME FUND, INC. AND STATE STREET BANK AND TRUST COMPANY
Support
During the term of this Addendum, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Customer Designated Persons may contact State
Street's Multicurrency HORlZON Help Desk and Customer Assistance Center between
the hours of 8 a.m. and 6 p.m. (Eastern time) on all business days for the
purpose of obtaining answers to questions about the use of the System, or to
report apparent problems with the System. From time to time, the Customer shall
provide to State Street a list of persons, not to exceed five in number, who
shall be permitted to contact State Street for assistance (such persons being
referred to as "the Customer Designated Persons").
b. Technical Support. State Street will provide technical support to assist
the Customer in using the System and the Data Access Services. The total amount
of technical support provided by State Street shall not exceed 10 resource days
per year. State Street shall provide such additional technical support as is
expressly set forth in the fee schedule in effect from time to time between the
parties (the "Fee Schedule"). Technical support, including during installation
and testing, is subject to the fees and other terms set forth in the Fee
Schedule.
c. Maintenance Support. State Street shall use commercially reasonable
efforts to correct system functions that do not work according to the System
Product Description as set forth on Attachment A in priority order in the next
scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Customer any
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Customer and shall offer the Customer reasonable
training on the enhancement. Charges for system enhancements shall be as
provided in the Fee Schedule. State Street retains the right to charge for
related systems or products that may be developed and separately made available
for use other than through the System.
e. Custom Modifications. In the event the Customer desires custom
modifications in connection with its use of the System, the Customer shall make
a written request to State Street providing specifications for the desired
modification. Any custom modifications may be
undertaken by State Street in its sole discretion in accordance with the Fee
Schedule.
f. Limitation on Support. State Street shall have no obligation to support
the Customer's use of the System: (i) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Customer has modified the System in
breach of this Addendum.
FUNDS TRANSFER INSTRUCTIONS
TELEPHONE CONFIRMATION
Client /Investment Manager: THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Authorized Initiators Please Type or Print
Please provide a listing of your staff members who are currently authorized to
INITIATE wire transfer instructions to State Street:
NAME TITLE SPECIMEN SIGNATURE
Xxxxxx Xxxxxx President
Xxxxxxx X. Xxxxxx Treasurer
Xxxx X. Xxxxx Vice President
Xxxxxxx Xxxxxx Assistant Treasurer
Authorized Verifiers Please Type or Print
Please provide a listing of your staff members who will be CALLED BACK to verify
the initiation of repetitive wires of $10 mil/ion or more and all non repetitive
wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
Xxxx Xxxxx 0-000-000-0000
Xxxxxxx Xxxxxx 0-000-000-0000
/s/ Xxxxxxx X. Xxxxxx
Type or Print Name Authorized Signature
Treasurer Dated: April 15, 1998
FUNDS TRANSFER SECURITY PROCEDURES
Selection Form
Please select one or more of the funds transfer security procedures indicated
below
SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication ) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions. Selection of this
security procedure would be most appropriate for existing SWIFT members.
Standing Instructions
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
Remote Batch Transmission
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers. Clients selecting this option should have an existing
facility for completing CPU-CPU transmissions. This delivery mechanism is
typically used for high-volume business.
Global Horizon Interchange Funds Transfer Service
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street. This delivery mechanism is most appropriate for
Clients with a low-to-
medium number of transactions (5- 75 per day), allowing Clients to enter, batch,
and review wire transfer instructions on their PC prior to release to State
Street.
X Telephone Confirmation (Callback)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized Initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.
X Repetitive Wires
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually. This alternative is recommended
whenever funds are frequently transferred between the same two accounts.
X Transfers Initiated by Facsimile
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key togs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client. We provide this
option for Clients who wish to batch wire instructions and transmit these as a
group to State Street Mutual Fund Services once or several times a day.
IMPORTANT: SIGNATURE REQUIRED ON THE REVERSE SIDE
FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
client's account(s) upon the receipt of a payment order in compliance with the
selected Security Procedure chosen for funds transfer and in the amount of money
that State Street has been instructed to transfer. State Street shall execute
payment orders in compliance with the Security Procedure and with the
Client's/Investment Manager's instructions on the execution date provided that
such payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. All payment orders and
communications received after this time will be deemed to have been received on
the next business day.
2. SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client shall restrict access to
confidential information relating to the Security Procedure to authorized
persons as communicated in writing to State Street. The Client must notify State
Street immediately if it has reason to believe unauthorized persons may have
obtained access to such information or of any change in the Client's authorized
personnel. State Street shall verify the authenticity of all instructions
according to the Security Procedure.
3. ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern.
4. REJECTION: State Street reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of State Street's receipt of such payment
order; (b) if initiating such payment order would cause State Street, in State
Street's sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers which are applicable to State
Street; or (c) if State Street, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS : When
a Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry , and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Street's execution of payment
orders shall ordinarily be provided within 24 hours notice which may be
delivered through State Street's proprietary information systems, such as, but
not limited to Horizon and GlobaIQuest, or by facsimile or callback. The Client
must report any objections to the execution of a payment order within 30 days.
I understand and agree to the terms and conditions described above. I am
authorized to sign on behalf of each of the mutua1 funds or other entities named
on Schedule A attached.
EACH OF THE PARTIES NAMED ON SCHEDULE A ATTACHED HERETO
By: /s/ Xxxxxxx X. Xxxxxx, Treasurer
April 10, 1998
FUNDS TRANSFER
SCHEDULE A
Name of Management Company: THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Fund Name(s): USLIFE INCOME FUND, INC.
Authorized Signature: /s/ Xxxxxxx X. Xxxxxx
Date: April 10, 0000
XXXXX XXXXXX BANK AND TRUST COMPANY U.S. LIFE INCOME FUND, INC.
CUSTODIAN FEE SCHEDULE
ADMINISTRATION (Domestic)
Custody -Maintain custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income. Make cash
disbursements and report cash transactions. Maintain investment ledgers, provide
selected portfolio transactions, position and income reports.
The administration fee shown below is an annual charge, billed and payable
monthly.
ANNUAL FEES PER PORTFOLIO
Custody Maintenance Fee Per Portfolio Per Month $150.00
Portfolio Trades -For each line item processed
---------------------------------------------------------------
State Street Repos $ 7.00
---------------------------------------------------------------
DTC or Fed Book Entry $10.00
---------------------------------------------------------------
SSB Boston Commercial Paper Book Entry $10.00
---------------------------------------------------------------
PTC Purchase, Sale, Deposit & Withdrawal $10.00
---------------------------------------------------------------
All Other Trades $16.00
---------------------------------------------------------------
Maturity Collections $ 8.00
---------------------------------------------------------------
Option charge for each option written or closing
contract, per issue, per broker $25.00
---------------------------------------------------------------
Option expiration/option exercised $15.00
---------------------------------------------------------------
Interest Rate Futures - no security movement $ 8.00
---------------------------------------------------------------
Monitoring for calls and processing coupons - for
each coupon issue held (monthly charge) $ 5.00
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
Holdings Charge:
For each issue maintained (annual charge) $30.00
Physical issues $66.00
---------------------------------------------------------------
---------------------------------------------------------------
Principal Reduction Payments
Per Paydown $ 1.50
---------------------------------------------------------------
---------------------------------------------------------------
Dividend Charges (for items held at request of traders
over record date in street form) $50.00
---------------------------------------------------------------
ADMINISTRATION (FOREIGN)
Custody - Maintain custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income. Make cash
disbursements and report cash transactions. Monitor corporate actions. Withhold
foreign taxes. File foreign tax reclaims. Annual fee in basis points per
portfolio.
----------------------------------------------------------------------------
Group I Group II Group III Group IV Group V Group VI
----------------------------------------------------------------------------
Euroclear Australia Austria Denmark Mexico Greece
----------------------------------------------------------------------------
Japan Canada Belgium Finland Portugal Malaysia
----------------------------------------------------------------------------
Germany France Italy Spain Indonesia
----------------------------------------------------------------------------
Hong Kong United Kingdom Thailand Sweden Turkey
----------------------------------------------------------------------------
Netherlands New Zealand Philippines
----------------------------------------------------------------------------
Norway
----------------------------------------------------------------------------
Singapore
----------------------------------------------------------------------------
Switzerland
----------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Group I Group II Group III Group IV Group V Group VI
-----------------------------------------------------------------------------------
First $50 Million 4 10 17 20 27 52
-----------------------------------------------------------------------------------
Next $50 Million 4 10 15 18 27 52
-----------------------------------------------------------------------------------
Over $100 Million 3 8 13 16 27 52
-----------------------------------------------------------------------------------
Transaction Charges
--------------------------------------------------------------
Group I Group II Group III Group IV Group V Group VI
--------------------------------------------------------------
$30 $30 $45 $60 $75 $250
--------------------------------------------------------------
BALANCE CREDIT
Balance credits for all funds will be applied against the custody fees based on
the 90 Day T-Xxxx rate announced weekly and adjusted by the current Federal
Reserve requirements. The rate announced weekly (every Monday) at the Fed T-Xxxx
auction will be utilized against the average collected balance in the Demand
Deposit Account maintained at State Street Bank.
SPECIAL SERVICES
Fees for activities of a non-recurring nature such as fund consolidation or
reorganizations, extraordinary security shipments and the preparation of special
reports will be subject to negotiation. Fees for automated pricing, yield
calculation and other special items will be negotiated separately.
OUT OF POCKET EXPENSES
A billing for the recovery of applicable out-of-pocket expenses will be made as
of the end of each month. Out of Pocket expenses include, but are not limited
to, the following:
Telephone
Wire Charges ($5.50 per wire)
Postage and Insurance
Courier Service
Duplicating Archiving
Legal Fees
Supplies Related to Fund Records
Rush Transfer - $8.00 each
Transfer fees
Sub-custodian Charges (e.g., Stamp Duties, Registration, etc.)
Price Waterhouse Audit Letter
Federal Reserve Fee for Return Check items over $2,500 - $4.25
GNMA Transfer - $15.00 each
PTC Deposit/Withdrawal for same day turnarounds - $50.00
APPROVED BY:
USLIFE INCOME FUND, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Treasurer
Date: April 14, 0000
XXXXX XXXXXX BANK AND TRUST COMPANY
By:
Title: Vice President
Date: April 14, 1998
