EXHIBIT (g.)
Custodian Agreement
CUSTODIAN SERVICES AGREEMENT
----------------------------
THIS AGREEMENT is made as of June 3, 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and SIT LARGE CAP GROWTH FUND, INC., a Minnesota corporation
(the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person authorized by the Fund to give Oral or Written
Instructions on behalf of the Fund. An Authorized Person's
scope of authority may be limited by setting forth such
limitation in a written document signed by both parties
hereto.
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(d) "Book-Entry System" means the Federal Reserve Treasury
book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry system or clearing agency
registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably
believed by PFPC Trust to be an Authorized Person. PFPC Trust
may, in its sole discretion in each separate instance,
consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series
or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC
Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC
Trust to be Authorized Persons) and received by PFPC Trust or
(ii) trade instructions transmitted by means of an electronic
transaction reporting system which requires the use of a
password or other authorized identifier in
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order to gain access. The instructions may be delivered
electronically (with respect to sub-item (ii) above) or by
hand, mail or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein and PFPC Trust accepts such
appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties
to be performed by PFPC Trust hereunder. Except as specifically set
forth herein, PFPC Trust assumes no responsibility for such compliance
by the Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives pursuant to this Agreement.
PFPC Trust may assume that any Oral Instructions or Written
Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the
Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC Trust receives Written Instructions to
the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions from Authorized Persons so that
PFPC Trust receives the Written Instructions by the close of
business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions
are not received by PFPC Trust or differ from the Oral
Instructions shall in no way invalidate the transactions or
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enforceability of the transactions authorized by the Oral
Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action
it should or should not take, PFPC Trust may request
directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC Trust may request advice from counsel of its
own reasonable choosing (who may be counsel for the Fund, the
Fund's investment adviser or PFPC Trust, at the option of PFPC
Trust).
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions PFPC Trust receives from the Fund, and the advice
it receives from counsel, PFPC Trust shall be entitled to rely
upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by
the Fund and without liability for any action PFPC Trust takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC Trust receives from
or on behalf of the Fund or in reliance upon advice from
counsel reasonably chosen by PFPC Trust and which PFPC Trust
believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written
Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Fund, which
are in the possession or under the control of PFPC Trust, shall be the
property of the Fund. Such books and records shall
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be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all
times during PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be
provided by PFPC Trust to the Fund or to an authorized representative
of the Fund, at the Fund's expense.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles, customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Fund or PFPC Trust, their respective
subsidiaries and affiliated companies; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that
is commercially valuable and secret in the sense that its
confidentiality affords the Fund or PFPC Trust a competitive advantage
over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and (d)
anything designated as confidential. Notwithstanding the foregoing,
information shall not be Confidential Information and shall not be
subject to such confidentiality obligations if: (a) it is already known
to the receiving party at the time it is obtained; (b) it is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) it is rightfully received from a third party who, to the
best of the receiving party's knowledge, is not under a duty of
confidentiality; (d) it is released by the protected party to a third
party without restriction; (e) it is requested or required to be
disclosed by the receiving party pursuant to a court order, subpoena,
governmental or regulatory agency request or law (provided the
receiving
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party will provide the other party written notice of the same, to the
extent such notice is permitted); (f) release of such information by
PFPC Trust is necessary or desirable in connection with the provision
of services under this Agreement; (g) it is relevant to the defense of
any claim or cause of action asserted against the receiving party; or
(h) it has been or is independently developed or obtained by the
receiving party.
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants
as reasonably requested by the Fund.
9. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund will pay to PFPC
Trust a fee or fees as may be agreed to in writing from time
to time by the Fund and PFPC Trust. The Fund acknowledges that
PFPC
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Trust may receive float benefits in connection with
maintaining certain accounts required to provide services
under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust
that (i) the terms of this Agreement, (ii) the fees and
expenses associated with this Agreement, and (iii) any
benefits accruing to PFPC Trust or to the adviser or sponsor
to the Fund in connection with this Agreement, including but
not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or
periodic payments made or to be made by PFPC Trust to such
adviser or sponsor or any affiliate of the Fund relating to
this Agreement have been fully disclosed to the Board of
Directors of the Fund and that, if required by applicable law,
such Board of Directors has approved or will approve the terms
of this Agreement, any such fees and expenses, and any such
benefits.
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC
Trust (including its officers, directors, agents and
employees) from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation,
reasonable attorneys' fees and disbursements) arising from any
action or omission to act which PFPC Trust takes in connection
with the provision of services to the Fund; provided that PFPC
Trust shall not be indemnified, defended or held harmless
against any liability (or any expenses incident to such
liability) caused by PFPC Trust's own bad faith, negligence or
reckless disregard in the performance of PFPC Trust's
activities under this Agreement.
(b) PFPC Trust agrees to indemnify, defend and hold harmless the
Fund (including its officers, directors and employees) from
all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, reasonable
attorneys' fees and disbursements) arising out of PFPC Trust's
failure to perform its duties under this Agreement but only to
the extent such taxes, charges, expenses, assessments, claims
and
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liabilities (including, without limitation, reasonable
attorneys' fees and disbursements) arise out of PFPC Trust's
bad faith, negligence or reckless disregard of its duties
under this Agreement; provided that the Fund shall not be
indemnified, defended or held harmless against any liability
(or any expenses incident to such liability) caused by the
Fund's own bad faith, negligence or reckless disregard
relating to the activities to which this Agreement relates.
(c) The provisions of this Section 12 shall survive termination of
this Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder
on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by PFPC Trust and the Fund
in a written amendment hereto. PFPC Trust shall be obligated
to exercise care and diligence in the performance of its
duties hereunder and to act in good faith in performing
services provided for under this Agreement. PFPC Trust shall
be liable only for and shall be required to indemnify, defend
and hold harmless the Fund (including its officers, directors
and employees) only from any taxes, charges, expenses,
assessments, claims and liabilities (including, without
limitation, reasonable attorneys' fees and disbursements)
arising out of PFPC Trust's failure to perform its duties
under this Agreement and only to the extent such taxes,
charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements) arise out of PFPC Trust's bad faith, negligence
or reckless disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC Trust shall not be liable for losses, delays,
failure, errors, interruption or loss of data occurring
directly or indirectly by reason of circumstances beyond its
reasonable control, including without limitation acts of God;
action or inaction of civil or military authority; public
enemy;
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war; terrorism; riot; fire; flood; sabotage; epidemics; labor
disputes; civil commotion; interruption, loss or malfunction
of utilities, transportation, computer or communications
capabilities; insurrection; elements of nature; or
non-performance by a third party; and (ii) PFPC Trust shall
not be under any duty or obligation to inquire into and shall
not be liable for the validity or invalidity, authority or
lack thereof, or truthfulness or accuracy or lack thereof, of
any instruction, direction, notice, instrument or other
information which PFPC Trust reasonably believes to be
genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
(i) neither PFPC Trust nor its affiliates shall be liable for
any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was
known by PFPC Trust or its affiliates, (ii) PFPC Trust's
cumulative liability to the Fund for all losses, claims,
suits, controversies, breaches or damages for any cause
whatsoever (including but not limited to those arising out of
or related to this Agreement) and regardless of the form of
action or legal theory shall not exceed the greater of
$250,000 or the fees received by PFPC Trust for services
provided hereunder during the 12 months immediately prior to
the date of such loss or damage (provided that, while the
dollar amount of any loss or damage caused by PFPC Trust's
fraud or gross negligence shall be included in calculating
whether the dollar limitations set forth in the foregoing
damage cap specified in this sub-section (ii) have been
reached, the foregoing damage cap specified in this
sub-section (ii) shall not otherwise limit PFPC Trust's
liability for loss or damage shown to be caused by PFPC
Trust's fraud or gross negligence) and (iii) PFPC Trust shall
not have any responsibility with respect to the acts,
omissions or operations of any Book-Entry System or other
depository (unless the same arise out of PFPC Trust's bad
faith, negligence or reckless disregard of its duties under
this Agreement).
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
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(e) For all purposes under this Agreement, reasonableness shall be
determined under the facts and circumstances prevailing in the
market where performance is rendered.
(f) Notwithstanding anything in this Agreement to the contrary
(other than as specifically provided in Section
14(h)(ii)(B)(4) and Section 14(h)(iii)(A) of this Agreement),
the Fund shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this
Agreement, or in respect of the Property or any collections
undertaken pursuant to this Agreement, which may be requested
by any relevant authority. In addition, the Fund shall be
solely responsible for the payment of all taxes and similar
items (including without limitation penalties and interest
related thereto).
(g) The provisions of this Section 13 shall survive termination of
this Agreement.
(h) Notwithstanding anything in this Agreement to the contrary,
PFPC Trust shall have no liability either for any error or
omission of any of its predecessors as servicer on behalf of
the Fund or for any failure to discover any such error or
omission.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Fund,
including cash received as a result of the distribution of
Shares, during the term of this Agreement. PFPC Trust will not
be responsible for any assets until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain a separate
account for the Fund (the "Account") and shall maintain in the
Account all cash and other assets received from or for the
Fund.
PFPC Trust shall make cash payments from or for the Account
only for:
(i) purchases of securities in the name of the Fund, PFPC
Trust, PFPC Trust's nominee or a sub-custodian or
nominee thereof as provided in sub-section (j) and
for which PFPC Trust has received a copy of the
broker's or dealer's
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confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions,
interest, taxes (provided that tax which PFPC Trust
considers is required to be deducted or withheld "at
source" will be governed by Section 14(h)(iii)(B) of
this Agreement), administration, accounting,
distribution, advisory and management fees which are
to be borne by the Fund;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the
transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for
the direct payment of cash dividends and
distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by
and among the Fund, PFPC Trust and the Fund's
transfer agent;
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund and
held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Account.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it
for the Account in a separate account that physically
segregates such securities from those of any other
persons, firms or corporations, except for securities
held in a Book-Entry System or through a
sub-custodian or depository. All such securities
shall be held or disposed of only upon Written
Instructions or otherwise pursuant to the terms of
this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except
upon the express terms of this Agreement or upon
Written Instructions authorizing the transaction. In
no case may any member of the Fund's Board of
Directors, or any officer, employee or agent of the
Fund withdraw any securities.
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At PFPC Trust's own expense and for its own
convenience, PFPC Trust may enter into sub-custodian
agreements with other banks or trust companies to
perform duties described in this sub-section (c) with
respect to domestic assets. Such bank or trust
company shall have aggregate capital, surplus and
undivided profits, according to its last published
report, of at least one million dollars ($1,000,000),
if it is a subsidiary or affiliate of PFPC Trust, or
at least twenty million dollars ($20,000,000) if such
bank or trust company is not a subsidiary or
affiliate of PFPC Trust. In addition, such bank or
trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of
applicable rules and regulations. Any such
arrangement will not be entered into without prior
written notice to the Fund (or as otherwise provided
in the 1940 Act).
In addition, PFPC Trust may enter into arrangements
with sub-custodians with respect to services
regarding foreign assets. Any such arrangement will
not be entered into without prior written notice to
the Fund (or as otherwise provided in the 1940 Act).
The Fund agrees that it will not hold foreign assets
with any sub-custodian not currently selected by PFPC
Trust in relation to the Fund.
PFPC Trust shall remain responsible for the acts and
omissions of any sub-custodian chosen by PFPC Trust
under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own
acts and omissions under this Agreement; provided
that, so long as PFPC Trust has chosen such a
sub-custodian (both initially and on an ongoing
basis) in the exercise of reasonable care, prudence
and diligence, PFPC Trust shall have no
responsibility relating to the insolvency of any such
sub-custodian.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust shall:
(i) deliver any securities held for the Fund against the
receipt of payment for the sale of such securities or
otherwise in accordance with standard market
practice;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of the
Fund as owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for the Fund against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
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(v) deliver any securities held for the Fund to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Fund and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be
for the purpose of effectuating a duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(vii) release securities belonging to the Fund to any bank
or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the
Fund; provided, however, that securities shall be
released only upon payment to PFPC Trust of the
monies borrowed, except that in cases where
additional collateral is required to secure a
borrowing already made subject to proper prior
authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to
it of the securities pledged or hypothecated therefor
and upon surrender of the note or notes evidencing
the loan;
(viii) release and deliver securities owned by the Fund in
connection with any repurchase agreement entered into
by the Fund, but only on receipt of payment therefor;
and pay out monies of the Fund in connection with
such repurchase agreements, but only upon the
delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and
the name and address of the person(s) to whom
delivery shall be made when such action is pursuant
to sub-paragraph d(xii).
(e) Use of Book-Entry System or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Fund eligible for deposit therein
and will utilize Book-Entry Systems and other depositories to
the extent possible in connection with settlements of
purchases and sales of securities by the Fund, and
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deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with
borrowings. PFPC Trust shall continue to perform such duties
until it receives Written Instructions or Oral Instructions
authorizing contrary actions. Notwithstanding anything in this
Agreement to the contrary, PFPC Trust's use of a Book-Entry
System shall comply with the requirements of Rule 17f-4 under
the 1940 Act.
PFPC Trust shall administer a Book-Entry System or other depository as
follows:
(i) With respect to securities of the Fund which are
maintained in a Book-Entry System or another
depository, the records of PFPC Trust shall identify
by book-entry or otherwise those securities as
belonging to the Fund.
(ii) Assets of the Fund deposited in a Book-Entry System
or another depository will (to the extent consistent
with applicable law and standard practice) at all
times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other
assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request
from time to time.
(f) Registration of Securities. All securities held for the Fund
which are issued or issuable only in bearer form, except such
securities maintained in the Book-Entry System or in another
depository, shall be held by PFPC Trust in bearer form; all
other securities maintained for the Fund may be registered in
the name of the Fund, PFPC Trust, a Book-Entry System, another
depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Fund reserves the right to instruct PFPC
Trust as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to maintain
or deliver in proper form for transfer, or to register in the
name of its nominee or in the name of the Book-Entry System or
in the name of another appropriate entity, any securities
which it may maintain for the Account.
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With respect to uncertificated securities which are registered
in the name of the Fund (or a nominee thereof), PFPC Trust
will reflect such securities on its records based upon the
holdings information provided to it by the issuer of such
securities, but notwithstanding anything in this Agreement to
the contrary PFPC Trust shall not be obligated to safekeep
such securities or to perform other duties with respect to
such securities other than to make payment for the purchase of
such securities upon receipt of Oral or Written Instructions,
accept in sale proceeds received by PFPC Trust upon the sale
of such securities of which PFPC Trust is informed pursuant to
Oral or Written Instructions, and accept in other
distributions received by PFPC Trust with respect to such
securities or reflect on its records any reinvested
distributions with respect to such securities of which it is
informed by the issuer of the securities.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of the Fund, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of another entity, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting
materials received by PFPC Trust as custodian of the Property
to the registered holder of such securities. If the registered
holder is not the Fund, then Written Instructions or Oral
Instructions must designate the person who owns such
securities.
(h) Transactions Not Requiring Instructions. Notwithstanding
anything in this Agreement requiring instructions in order to
take a particular action, in the absence of a contrary Written
Instruction, PFPC Trust is authorized to take the following
actions without the need for instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the
Fund, all income, dividends, distributions,
coupons, option premiums, other payments and
similar items, included or to be included in
the Property, and, in addition,
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promptly advise the Fund of such receipt and
credit such income to the Fund's custodian
account;
(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of the Fund
all securities received as a distribution on
the Fund's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to
any securities belonging to the Fund and
held by PFPC Trust hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be called, redeemed, retired or otherwise
become payable (on a mandatory basis) on the
date such securities become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement for collection of
checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of
the Fund in accordance with street
delivery custom;
(2) for the exchange of interim
receipts or temporary securities
for definitive securities; and
(3) for transfer of securities into the
name of the Fund or PFPC Trust or a
sub-custodian or a nominee of one
of the foregoing, or for exchange
of securities for a different
number of bonds, certificates, or
other evidence, representing the
same aggregate face amount or
number of units bearing the same
interest rate, maturity date and
call provisions, if any; provided
that, in any such case, the new
securities are to be delivered to
PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment
for the account of the Fund;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of the Fund;
C-25
(3) hold for the account of the Fund
all stock dividends, rights and
similar securities issued with
respect to any securities held by
PFPC Trust; and
(4) subject to receipt of such
documentation and information as
PFPC Trust may request, execute as
agent on behalf of the Fund all
necessary ownership certificates
required by a national governmental
taxing authority or under the laws
of any U.S. state now or hereafter
in effect, inserting the Fund's
name on such certificate as the
owner of the securities covered
thereby, to the extent it may
lawfully do so.
(iii) Other Matters.
(A) subject to receipt of such documentation and
information as PFPC Trust may request, PFPC
Trust will, in such jurisdictions as PFPC
Trust may agree from time to time, seek to
reclaim or obtain a reduction with respect
to any withholdings or other taxes relating
to assets maintained hereunder (provided
that PFPC Trust will not be liable for
failure to obtain any particular relief in a
particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or
withhold any sum in respect of tax which
PFPC Trust considers is required to be
deducted or withheld "at source" by any
relevant law or practice.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of the Fund. Such accounts may be used to transfer
cash and securities, including securities in a
Book-Entry System or other depository:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for
other purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
C-26
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for the
Fund (or otherwise in accordance with standard market
practice) pay out of the monies held for the account
of the Fund the total amount payable to the person
from whom or the broker through whom the purchase was
made, provided that the same conforms to the total
amount payable as set forth in such Oral Instructions
or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made; and
(vii) the location to which the security must be delivered
and delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the total
amount payable is the same as was set forth in the Oral
C-27
Instructions or Written Instructions. Notwithstanding anything to the
contrary in this Agreement, PFPC Trust may accept payment in such form
as is consistent with standard industry practice and may deliver assets
and arrange for payment in accordance with standard market practice.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account of
the Fund, listing each portfolio security
belonging to the Fund (with the
corresponding security identification
number) held at the end of such month and
stating the cash balance of the Fund at the
end of such month.
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Fund as to such
actions or events. For clarification, upon
termination of this Agreement PFPC Trust shall have
no responsibility to transmit such material or to
inform the Fund or any other person of such actions
or events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion
credit the Account with respect to income, dividends,
distributions, coupons, option premiums, other payments or
similar items prior to PFPC Trust's actual receipt thereof,
and in addition PFPC Trust may in its sole discretion credit
or debit the assets in the Account on a contractual settlement
date with respect to any sale, exchange or purchase applicable
to the Account; provided that nothing herein or otherwise
shall require PFPC Trust to make any advances or to credit
C-28
any amounts until PFPC Trust's actual receipt thereof. If PFPC
Trust credits the Account with respect to (a) income,
dividends, distributions, coupons, option premiums, other
payments or similar items on a contractual payment date or
otherwise in advance of PFPC Trust's actual receipt of the
amount due, (b) the proceeds of any sale or other disposition
of assets on the contractual settlement date or otherwise in
advance of PFPC Trust's actual receipt of the amount due or
(c) provisional crediting of any amounts due, and (i) PFPC
Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period
using reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so credited from the Fund. The
Fund hereby grants to PFPC Trust and to each sub-custodian
utilized by PFPC Trust in connection with providing services
to the Fund a first priority contractual possessory security
interest in and a right of setoff against the assets
maintained in the Account hereunder in the amount necessary to
secure the return and payment to PFPC Trust and to each such
sub-custodian of any advance or credit made by PFPC Trust
and/or by such sub-custodian (including charges related
thereto) to such Account. Notwithstanding anything in this
Agreement to the contrary, PFPC Trust shall be entitled to
assign any rights it has under this sub-section (m) to any
sub-custodian utilized by PFPC Trust in connection with
providing services to the Fund which sub-custodian makes any
credits or advances with respect to the Fund.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC
C-29
Trust) shall be at the sole risk of the Fund. If payment is
not received by PFPC Trust within a reasonable time after
proper demands have been made, PFPC Trust shall notify the
Fund in writing, including copies of all demand letters, any
written responses and memoranda of all oral responses and
shall await instructions from the Fund. PFPC Trust shall not
be obliged to take legal action for collection unless and
until reasonably indemnified to its satisfaction. PFPC Trust
shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due
course and shall provide the Fund with periodic status reports
of such income collected after a reasonable time.
(o) Excess Cash Sweep. PFPC Trust will, consistent with applicable
law, sweep any net excess cash balances daily into an
investment vehicle or other instrument designated in writing
by the Fund, so long as the investment vehicle or instrument
is acceptable to PFPC Trust, subject to a fee, paid to PFPC
Trust for such service, to be agreed between the parties. Such
investment vehicle or instrument may be offered by an
affiliate of PFPC Trust or by a PFPC Trust client and PFPC
Trust may receive compensation therefrom.
(p) Foreign Exchange. PFPC Trust and/or sub-custodians may enter
into or arrange foreign exchange transactions (at such rates
as they may consider appropriate) in order to facilitate
transactions under this Agreement, and such entities and/or
their affiliates may receive compensation in connection with
such foreign exchange transactions. PFPC Trust will not have
responsibility for an entity (including a sub-custodian) which
the Fund instructs it to use in connection with a foreign
exchange transaction.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of three (3) years (the
"Initial Term"), unless earlier terminated pursuant to Section
15(c) or 15(d) of this Agreement. After the Initial Term, this
Agreement shall
C-30
automatically be renewed for successive terms of three (3)
years ("Renewal Terms") each, unless notice is provided
pursuant to Section 15(b) of this Agreement or unless earlier
terminated pursuant to Section 15(c) or 15(d) of this
Agreement.
(b) Either party may terminate this Agreement at the end of the
Initial Term or at the end of any subsequent Renewal Term upon
not than less than ninety (90) days or more than one
hundred-eighty (180) days prior written notice to the other
party.
(c) If a party hereto is guilty of a material failure to perform
its duties and obligations under this Agreement or under any
other custodian services agreement between PFPC Trust and a
registered investment company for which Sit Investment
Associates, Inc. (or a successor thereto) serves as the
investment adviser which other agreement provides for the same
or substantially similar services as this Agreement (a
"Defaulting Party"), which material failure results in a
material loss to the other party (i.e., either PFPC Trust on
one hand, or the Fund or such other registered investment
company on the other hand), such other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of
such termination to the Defaulting Party. In all cases,
termination by the Non-Defaulting Party shall not constitute a
waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the
Defaulting Party.
(d) Notwithstanding anything contained in the foregoing provisions
of this Section 15 to the contrary, the Fund may terminate
this Agreement for any reason, or no reason, upon ninety (90)
days written notice to PFPC Trust.
(e) In the event of any termination of this Agreement prior to the
expiration of the then current Initial Term or Renewal Term
(including termination pursuant to Section 15(d)
C-31
of this Agreement prior to the expiration of the then current
Initial Term or Renewal Term but not including termination
pursuant to Section 15(c) of this Agreement), the Fund shall
immediately pay to PFPC Trust the amount of $17,000.
(f) In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the shareholders of
the Fund to dissolve or to function without a custodian of its
cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Fund to the
Fund. It may deliver them to a bank or trust company of PFPC
Trust's choice, having aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those
of this Agreement. PFPC Trust shall not be required to make
any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs, expenses and other amounts owing to it
under Section 15 of this Agreement (including without
limitation fees and expenses associated with deconversion or
conversion to another service provider and other trailing
expenses incurred by PFPC Trust). PFPC Trust shall have a
first priority contractual possessory security interest in and
shall have a right of setoff against the Property as security
for the payment of such fees, compensation, costs, expenses
and other amounts owing to it under Section 15 of this
Agreement.
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at 3300 IDS Center, 00
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
President; or (c) if to neither of the foregoing, at such other address
as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming electronic delivery, hand or facsimile sending device, it
shall be deemed to have been
C-32
given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given five days after it has been mailed. If notice
is sent by messenger, it shall be deemed to have been given on the day
it is delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. ASSIGNMENT. PFPC Trust may assign this Agreement to any affiliate of
PFPC Trust or of The PNC Financial Services Group, Inc., provided that
PFPC Trust gives the Fund 30 days' prior written notice of such
assignment.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties.
(b) No Representations or Warranties. Except as expressly provided
in this Agreement, PFPC Trust hereby disclaims all
representations and warranties, express or implied, made to
the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to
services provided under this Agreement. PFPC Trust disclaims
any warranty of title or non-infringement except as otherwise
set forth in this Agreement.
C-33
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees
not to make any modifications to its registration statement or
adopt any policies which would affect materially the
obligations or responsibilities of PFPC Trust hereunder
without the prior written approval of PFPC Trust, which
approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(e) Information. The Fund will provide such information and
documentation as PFPC Trust may reasonably request in
connection with services provided by PFPC Trust to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(h) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(i) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) Customer Identification Program Notice. To help the U.S.
government fight the funding of terrorism and money laundering
activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information
that identifies each person who initially opens an account
with that financial institution on or after October 1, 2003.
Consistent with this requirement, PFPC Trust may request (or
may have already requested) the Fund's name, address and
taxpayer identification number or other
C-34
government-issued identification number, and, if such party is
a natural person, that party's date of birth. PFPC Trust may
also ask (and may have already asked) for additional
identifying information, and PFPC Trust may take steps (and
may have already taken steps) to verify the authenticity and
accuracy of these data elements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, XX
------------------------------
Title: Vice President
------------------------------
SIT LARGE CAP GROWTH FUND, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Title: Vice President
------------------------------
C-35
CUSTODIAN SERVICES AGREEMENT
----------------------------
THIS AGREEMENT is made as of June 3, 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and SIT MID CAP GROWTH FUND, INC., a Minnesota corporation (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person authorized by the Fund to give Oral or Written
Instructions on behalf of the Fund. An Authorized Person's
scope of authority may be limited by setting forth such
limitation in a written document signed by both parties
hereto.
C-36
(d) "Book-Entry System" means the Federal Reserve Treasury
book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry system or clearing agency
registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably
believed by PFPC Trust to be an Authorized Person. PFPC Trust
may, in its sole discretion in each separate instance,
consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series
or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC
Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC
Trust to be Authorized Persons) and received by PFPC Trust or
(ii) trade instructions transmitted by means of an electronic
transaction
C-37
reporting system which requires the use of a password or other
authorized identifier in order to gain access. The
instructions may be delivered electronically (with respect to
sub-item (ii) above) or by hand, mail or facsimile sending
device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein and PFPC Trust accepts such
appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties
to be performed by PFPC Trust hereunder. Except as specifically set
forth herein, PFPC Trust assumes no responsibility for such compliance
by the Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives pursuant to this Agreement.
PFPC Trust may assume that any Oral Instructions or Written
Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the
Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC Trust receives Written Instructions to
the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions from Authorized Persons so that
PFPC Trust receives the Written Instructions by the close of
business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions
are not received by
C-38
PFPC Trust or differ from the Oral Instructions shall in no
way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions or PFPC
Trust's ability to rely upon such Oral Instructions.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action
it should or should not take, PFPC Trust may request
directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC Trust may request advice from counsel of its
own reasonable choosing (who may be counsel for the Fund, the
Fund's investment adviser or PFPC Trust, at the option of PFPC
Trust).
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions PFPC Trust receives from the Fund, and the advice
it receives from counsel, PFPC Trust shall be entitled to rely
upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by
the Fund and without liability for any action PFPC Trust takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC Trust receives from
or on behalf of the Fund or in reliance upon advice from
counsel reasonably chosen by PFPC Trust and which PFPC Trust
believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written
Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Fund, which
are in the possession or
C-39
under the control of PFPC Trust, shall be the property of the Fund.
Such books and records shall be prepared and maintained as required by
the 1940 Act and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such
books and records at all times during PFPC Trust's normal business
hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PFPC Trust to the Fund or to an
authorized representative of the Fund, at the Fund's expense.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles, customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Fund or PFPC Trust, their respective
subsidiaries and affiliated companies; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that
is commercially valuable and secret in the sense that its
confidentiality affords the Fund or PFPC Trust a competitive advantage
over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and (d)
anything designated as confidential. Notwithstanding the foregoing,
information shall not be Confidential Information and shall not be
subject to such confidentiality obligations if: (a) it is already known
to the receiving party at the time it is obtained; (b) it is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) it is rightfully received from a third party who, to the
best of the receiving party's knowledge, is not under a duty of
confidentiality; (d) it is released by the protected party to a third
party without restriction; (e) it is requested or required to be
disclosed by the receiving party pursuant to a
C-40
court order, subpoena, governmental or regulatory agency request or law
(provided the receiving party will provide the other party written
notice of the same, to the extent such notice is permitted); (f)
release of such information by PFPC Trust is necessary or desirable in
connection with the provision of services under this Agreement; (g) it
is relevant to the defense of any claim or cause of action asserted
against the receiving party; or (h) it has been or is independently
developed or obtained by the receiving party.
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants
as reasonably requested by the Fund.
9. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund will pay to PFPC
Trust a fee or fees as may be agreed to in writing
C-41
from time to time by the Fund and PFPC Trust. The Fund
acknowledges that PFPC Trust may receive float benefits in
connection with maintaining certain accounts required to
provide services under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust
that (i) the terms of this Agreement, (ii) the fees and
expenses associated with this Agreement, and (iii) any
benefits accruing to PFPC Trust or to the adviser or sponsor
to the Fund in connection with this Agreement, including but
not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or
periodic payments made or to be made by PFPC Trust to such
adviser or sponsor or any affiliate of the Fund relating to
this Agreement have been fully disclosed to the Board of
Directors of the Fund and that, if required by applicable law,
such Board of Directors has approved or will approve the terms
of this Agreement, any such fees and expenses, and any such
benefits.
12. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC
Trust (including its officers, directors, agents and
employees) from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation,
reasonable attorneys' fees and disbursements) arising from any
action or omission to act which PFPC Trust takes in connection
with the provision of services to the Fund; provided that PFPC
Trust shall not be indemnified, defended or held harmless
against any liability (or any expenses incident to such
liability) caused by PFPC Trust's own bad faith, negligence or
reckless disregard in the performance of PFPC Trust's
activities under this Agreement.
(b) PFPC Trust agrees to indemnify, defend and hold harmless the
Fund (including its officers, directors and employees) from
all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, reasonable
attorneys' fees and disbursements) arising out of PFPC Trust's
failure to perform its duties under this
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Agreement but only to the extent such taxes, charges,
expenses, assessments, claims and liabilities (including,
without limitation, reasonable attorneys' fees and
disbursements) arise out of PFPC Trust's bad faith, negligence
or reckless disregard of its duties under this Agreement;
provided that the Fund shall not be indemnified, defended or
held harmless against any liability (or any expenses incident
to such liability) caused by the Fund's own bad faith,
negligence or reckless disregard relating to the activities to
which this Agreement relates.
(c) The provisions of this Section 12 shall survive termination of
this Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder
on behalf of the Fund except as specifically set forth herein
or as may be specifically agreed to by PFPC Trust and the Fund
in a written amendment hereto. PFPC Trust shall be obligated
to exercise care and diligence in the performance of its
duties hereunder and to act in good faith in performing
services provided for under this Agreement. PFPC Trust shall
be liable only for and shall be required to indemnify, defend
and hold harmless the Fund (including its officers, directors
and employees) only from any taxes, charges, expenses,
assessments, claims and liabilities (including, without
limitation, reasonable attorneys' fees and disbursements)
arising out of PFPC Trust's failure to perform its duties
under this Agreement and only to the extent such taxes,
charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements) arise out of PFPC Trust's bad faith, negligence
or reckless disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC Trust shall not be liable for losses, delays,
failure, errors, interruption or loss of data occurring
directly or indirectly by reason of circumstances beyond its
reasonable control, including without
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limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire;
flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and (ii) PFPC Trust shall not be under any duty
or obligation to inquire into and shall not be liable for the
validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC
Trust reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
(i) neither PFPC Trust nor its affiliates shall be liable for
any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was
known by PFPC Trust or its affiliates, (ii) PFPC Trust's
cumulative liability to the Fund for all losses, claims,
suits, controversies, breaches or damages for any cause
whatsoever (including but not limited to those arising out of
or related to this Agreement) and regardless of the form of
action or legal theory shall not exceed the greater of
$250,000 or the fees received by PFPC Trust for services
provided hereunder during the 12 months immediately prior to
the date of such loss or damage (provided that, while the
dollar amount of any loss or damage caused by PFPC Trust's
fraud or gross negligence shall be included in calculating
whether the dollar limitations set forth in the foregoing
damage cap specified in this sub-section (ii) have been
reached, the foregoing damage cap specified in this
sub-section (ii) shall not otherwise limit PFPC Trust's
liability for loss or damage shown to be caused by PFPC
Trust's fraud or gross negligence) and (iii) PFPC Trust shall
not have any responsibility with respect to the acts,
omissions or operations of any Book-Entry System or other
depository (unless the same arise out of PFPC Trust's bad
faith, negligence or reckless disregard of its duties under
this Agreement).
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(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
(e) For all purposes under this Agreement, reasonableness shall be
determined under the facts and circumstances prevailing in the
market where performance is rendered.
(f) Notwithstanding anything in this Agreement to the contrary
(other than as specifically provided in Section
14(h)(ii)(B)(4) and Section 14(h)(iii)(A) of this Agreement),
the Fund shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this
Agreement, or in respect of the Property or any collections
undertaken pursuant to this Agreement, which may be requested
by any relevant authority. In addition, the Fund shall be
solely responsible for the payment of all taxes and similar
items (including without limitation penalties and interest
related thereto).
(g) The provisions of this Section 13 shall survive termination of
this Agreement.
(h) Notwithstanding anything in this Agreement to the contrary,
PFPC Trust shall have no liability either for any error or
omission of any of its predecessors as servicer on behalf of
the Fund or for any failure to discover any such error or
omission.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Fund,
including cash received as a result of the distribution of
Shares, during the term of this Agreement. PFPC Trust will not
be responsible for any assets until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain a separate
account for the Fund (the "Account") and shall maintain in the
Account all cash and other assets received from or for the
Fund. PFPC Trust shall make cash payments from or for the
Account only for:
(i) purchases of securities in the name of the Fund, PFPC
Trust, PFPC Trust's
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nominee or a sub-custodian or nominee thereof as
provided in sub-section (j) and for which PFPC Trust
has received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions,
interest, taxes (provided that tax which PFPC Trust
considers is required to be deducted or withheld "at
source" will be governed by Section 14(h)(iii)(B) of
this Agreement), administration, accounting,
distribution, advisory and management fees which are
to be borne by the Fund;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the
transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for
the direct payment of cash dividends and
distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by
and among the Fund, PFPC Trust and the Fund's
transfer agent;
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund and
held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Account.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it
for the Account in a separate account that physically
segregates such securities from those of any other
persons, firms or corporations, except for securities
held in a Book-Entry System or through a
sub-custodian or depository. All such securities
shall be held or disposed of only upon Written
Instructions or otherwise pursuant to the terms of
this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except
upon the express terms of this Agreement or upon
Written Instructions authorizing the transaction. In
no case may any member of the Fund's Board of
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Directors, or any officer, employee or agent of the
Fund withdraw any securities.
At PFPC Trust's own expense and for its own
convenience, PFPC Trust may enter into sub-custodian
agreements with other banks or trust companies to
perform duties described in this sub-section (c) with
respect to domestic assets. Such bank or trust
company shall have aggregate capital, surplus and
undivided profits, according to its last published
report, of at least one million dollars ($1,000,000),
if it is a subsidiary or affiliate of PFPC Trust, or
at least twenty million dollars ($20,000,000) if such
bank or trust company is not a subsidiary or
affiliate of PFPC Trust. In addition, such bank or
trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of
applicable rules and regulations. Any such
arrangement will not be entered into without prior
written notice to the Fund (or as otherwise provided
in the 1940 Act).
In addition, PFPC Trust may enter into arrangements
with sub-custodians with respect to services
regarding foreign assets. Any such arrangement will
not be entered into without prior written notice to
the Fund (or as otherwise provided in the 1940 Act).
The Fund agrees that it will not hold foreign assets
with any sub-custodian not currently selected by PFPC
Trust in relation to the Fund.
PFPC Trust shall remain responsible for the acts and
omissions of any sub-custodian chosen by PFPC Trust
under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own
acts and omissions under this Agreement; provided
that, so long as PFPC Trust has chosen such a
sub-custodian (both initially and on an ongoing
basis) in the exercise of reasonable care, prudence
and diligence, PFPC Trust shall have no
responsibility relating to the insolvency of any such
sub-custodian.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust shall:
(i) deliver any securities held for the Fund against the
receipt of payment for the sale of such securities or
otherwise in accordance with standard market
practice;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of the
Fund as owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for the Fund against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
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(v) deliver any securities held for the Fund to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Fund and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be
for the purpose of effectuating a duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(vii) release securities belonging to the Fund to any bank
or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the
Fund; provided, however, that securities shall be
released only upon payment to PFPC Trust of the
monies borrowed, except that in cases where
additional collateral is required to secure a
borrowing already made subject to proper prior
authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to
it of the securities pledged or hypothecated therefor
and upon surrender of the note or notes evidencing
the loan;
(viii) release and deliver securities owned by the Fund in
connection with any repurchase agreement entered into
by the Fund, but only on receipt of payment therefor;
and pay out monies of the Fund in connection with
such repurchase agreements, but only upon the
delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Fund eligible for deposit therein
and will utilize Book-Entry Systems and other depositories to
the extent possible in connection with settlements of
purchases and sales of securities by the Fund, and deliveries
and returns of securities loaned, subject to repurchase
agreements or used as
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collateral in connection with borrowings. PFPC Trust shall
continue to perform such duties until it receives Written
Instructions or Oral Instructions authorizing contrary
actions. Notwithstanding anything in this Agreement to the
contrary, PFPC Trust's use of a Book-Entry System shall comply
with the requirements of Rule 17f-4 under the 1940 Act.
PFPC Trust shall administer a Book-Entry System or other
depository as follows:
(i) With respect to securities of the Fund which are
maintained in a Book-Entry System or another
depository, the records of PFPC Trust shall identify
by book-entry or otherwise those securities as
belonging to the Fund.
(ii) Assets of the Fund deposited in a Book-Entry System
or another depository will (to the extent consistent
with applicable law and standard practice) at all
times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other
assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request
from time to time.
(f) Registration of Securities. All securities held for the Fund
which are issued or issuable only in bearer form, except such
securities maintained in the Book-Entry System or in another
depository, shall be held by PFPC Trust in bearer form; all
other securities maintained for the Fund may be registered in
the name of the Fund, PFPC Trust, a Book-Entry System, another
depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Fund reserves the right to instruct PFPC
Trust as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to maintain
or deliver in proper form for transfer, or to register in the
name of its nominee or in the name of the Book-Entry System or
in the name of another appropriate entity, any securities
which it may maintain for the Account. With respect to
uncertificated securities which are registered in the name of
the Fund (or
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a nominee thereof), PFPC Trust will reflect such securities on
its records based upon the holdings information provided to it
by the issuer of such securities, but notwithstanding anything
in this Agreement to the contrary PFPC Trust shall not be
obligated to safekeep such securities or to perform other
duties with respect to such securities other than to make
payment for the purchase of such securities upon receipt of
Oral or Written Instructions, accept in sale proceeds received
by PFPC Trust upon the sale of such securities of which PFPC
Trust is informed pursuant to Oral or Written Instructions,
and accept in other distributions received by PFPC Trust with
respect to such securities or reflect on its records any
reinvested distributions with respect to such securities of
which it is informed by the issuer of the securities.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of the Fund, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of another entity, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting
materials received by PFPC Trust as custodian of the Property
to the registered holder of such securities. If the registered
holder is not the Fund, then Written Instructions or Oral
Instructions must designate the person who owns such
securities.
(h) Transactions Not Requiring Instructions. Notwithstanding
anything in this Agreement requiring instructions in order to
take a particular action, in the absence of a contrary Written
Instruction, PFPC Trust is authorized to take the following
actions without the need for instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of the
Fund, all income, dividends, distributions,
coupons, option premiums, other payments and
similar items, included or to be included in
the Property, and, in addition, promptly
advise the Fund of such receipt and credit
such income to the Fund's custodian account;
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(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of the Fund
all securities received as a distribution on
the Fund's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to
any securities belonging to the Fund and
held by PFPC Trust hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be called, redeemed, retired or otherwise
become payable (on a mandatory basis) on the
date such securities become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement for collection of
checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of
the Fund in accordance with street
delivery custom;
(2) for the exchange of interim
receipts or temporary securities
for definitive securities; and
(3) for transfer of securities into the
name of the Fund or PFPC Trust or a
sub-custodian or a nominee of one
of the foregoing, or for exchange
of securities for a different
number of bonds, certificates, or
other evidence, representing the
same aggregate face amount or
number of units bearing the same
interest rate, maturity date and
call provisions, if any; provided
that, in any such case, the new
securities are to be delivered to
PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment
for the account of the Fund;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of the Fund;
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(3) hold for the account of the Fund
all stock dividends, rights and
similar securities issued with
respect to any securities held by
PFPC Trust; and
(4) subject to receipt of such
documentation and information as
PFPC Trust may request, execute as
agent on behalf of the Fund all
necessary ownership certificates
required by a national governmental
taxing authority or under the laws
of any U.S. state now or hereafter
in effect, inserting the Fund's
name on such certificate as the
owner of the securities covered
thereby, to the extent it may
lawfully do so.
(iii) Other Matters.
(A) subject to receipt of such documentation and
information as PFPC Trust may request, PFPC
Trust will, in such jurisdictions as PFPC
Trust may agree from time to time, seek to
reclaim or obtain a reduction with respect
to any withholdings or other taxes relating
to assets maintained hereunder (provided
that PFPC Trust will not be liable for
failure to obtain any particular relief in a
particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or
withhold any sum in respect of tax which
PFPC Trust considers is required to be
deducted or withheld "at source" by any
relevant law or practice.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of the Fund. Such accounts may be used to transfer
cash and securities, including securities in a
Book-Entry System or other depository:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for
other purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of
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Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase; and
(vi) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for the
Fund (or otherwise in accordance with standard market
practice) pay out of the monies held for the account
of the Fund the total amount payable to the person
from whom or the broker through whom the purchase was
made, provided that the same conforms to the total
amount payable as set forth in such Oral Instructions
or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made; and
(vii) the location to which the security must be delivered
and delivery deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Fund upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions or
Written Instructions. Notwithstanding anything to the contrary in this
Agreement, PFPC Trust may accept payment in such form as is consistent
with standard industry practice and
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may deliver assets and arrange for payment in accordance with standard
market practice.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account of
the Fund, listing each portfolio security
belonging to the Fund (with the
corresponding security identification
number) held at the end of such month and
stating the cash balance of the Fund at the
end of such month.
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Fund as to such
actions or events. For clarification, upon
termination of this Agreement PFPC Trust shall have
no responsibility to transmit such material or to
inform the Fund or any other person of such actions
or events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion
credit the Account with respect to income, dividends,
distributions, coupons, option premiums, other payments or
similar items prior to PFPC Trust's actual receipt thereof,
and in addition PFPC Trust may in its sole discretion credit
or debit the assets in the Account on a contractual settlement
date with respect to any sale, exchange or purchase applicable
to the Account; provided that nothing herein or otherwise
shall require PFPC Trust to make any advances or to credit any
amounts until PFPC Trust's actual receipt thereof. If PFPC
Trust credits the Account with respect to (a) income,
dividends, distributions, coupons, option premiums, other
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payments or similar items on a contractual payment date or
otherwise in advance of PFPC Trust's actual receipt of the
amount due, (b) the proceeds of any sale or other disposition
of assets on the contractual settlement date or otherwise in
advance of PFPC Trust's actual receipt of the amount due or
(c) provisional crediting of any amounts due, and (i) PFPC
Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period
using reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so credited from the Fund. The
Fund hereby grants to PFPC Trust and to each sub-custodian
utilized by PFPC Trust in connection with providing services
to the Fund a first priority contractual possessory security
interest in and a right of setoff against the assets
maintained in the Account hereunder in the amount necessary to
secure the return and payment to PFPC Trust and to each such
sub-custodian of any advance or credit made by PFPC Trust
and/or by such sub-custodian (including charges related
thereto) to such Account. Notwithstanding anything in this
Agreement to the contrary, PFPC Trust shall be entitled to
assign any rights it has under this sub-section (m) to any
sub-custodian utilized by PFPC Trust in connection with
providing services to the Fund which sub-custodian makes any
credits or advances with respect to the Fund.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be
at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify
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the Fund in writing, including copies of all demand letters,
any written responses and memoranda of all oral responses and
shall await instructions from the Fund. PFPC Trust shall not
be obliged to take legal action for collection unless and
until reasonably indemnified to its satisfaction. PFPC Trust
shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due
course and shall provide the Fund with periodic status reports
of such income collected after a reasonable time.
(o) Excess Cash Sweep. PFPC Trust will, consistent with applicable
law, sweep any net excess cash balances daily into an
investment vehicle or other instrument designated in writing
by the Fund, so long as the investment vehicle or instrument
is acceptable to PFPC Trust, subject to a fee, paid to PFPC
Trust for such service, to be agreed between the parties. Such
investment vehicle or instrument may be offered by an
affiliate of PFPC Trust or by a PFPC Trust client and PFPC
Trust may receive compensation therefrom.
(p) Foreign Exchange. PFPC Trust and/or sub-custodians may enter
into or arrange foreign exchange transactions (at such rates
as they may consider appropriate) in order to facilitate
transactions under this Agreement, and such entities and/or
their affiliates may receive compensation in connection with
such foreign exchange transactions. PFPC Trust will not have
responsibility for an entity (including a sub-custodian) which
the Fund instructs it to use in connection with a foreign
exchange transaction.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of three (3) years (the
"Initial Term"), unless earlier terminated pursuant to Section
15(c) or 15(d) of this Agreement. After the Initial Term, this
Agreement shall automatically be renewed for successive terms
of three (3) years ("Renewal Terms") each, unless notice is
provided pursuant to Section 15(b) of this Agreement or unless
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earlier terminated pursuant to Section 15(c) or 15(d) of this
Agreement.
(b) Either party may terminate this Agreement at the end of the
Initial Term or at the end of any subsequent Renewal Term upon
not than less than ninety (90) days or more than one
hundred-eighty (180) days prior written notice to the other
party.
(c) If a party hereto is guilty of a material failure to perform
its duties and obligations under this Agreement or under any
other custodian services agreement between PFPC Trust and a
registered investment company for which Sit Investment
Associates, Inc. (or a successor thereto) serves as the
investment adviser which other agreement provides for the same
or substantially similar services as this Agreement (a
"Defaulting Party"), which material failure results in a
material loss to the other party (i.e., either PFPC Trust on
one hand, or the Fund or such other registered investment
company on the other hand), such other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written
notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of
such termination to the Defaulting Party. In all cases,
termination by the Non-Defaulting Party shall not constitute a
waiver by the Non-Defaulting Party of any other rights it
might have under this Agreement or otherwise against the
Defaulting Party.
(d) Notwithstanding anything contained in the foregoing provisions
of this Section 15 to the contrary, the Fund may terminate
this Agreement for any reason, or no reason, upon ninety (90)
days written notice to PFPC Trust.
(e) In the event of any termination of this Agreement prior to the
expiration of the then current Initial Term or Renewal Term
(including termination pursuant to Section 15(d) of this
Agreement prior to the expiration of the then current Initial
Term or Renewal Term but not including termination pursuant to
Section 15(c) of this Agreement), the
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Fund shall immediately pay to PFPC Trust the amount of
$53,000.
(f) In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the shareholders of
the Fund to dissolve or to function without a custodian of its
cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Fund to the
Fund. It may deliver them to a bank or trust company of PFPC
Trust's choice, having aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those
of this Agreement. PFPC Trust shall not be required to make
any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs, expenses and other amounts owing to it
under Section 15 of this Agreement (including without
limitation fees and expenses associated with deconversion or
conversion to another service provider and other trailing
expenses incurred by PFPC Trust). PFPC Trust shall have a
first priority contractual possessory security interest in and
shall have a right of setoff against the Property as security
for the payment of such fees, compensation, costs, expenses
and other amounts owing to it under Section 15 of this
Agreement.
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at 3300 IDS Center, 00
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
President; or (c) if to neither of the foregoing, at such other address
as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming electronic delivery, hand or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given five days after
it has been mailed. If notice is sent by messenger, it shall be deemed
to have been given on the day it is delivered.
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17. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. ASSIGNMENT. PFPC Trust may assign this Agreement to any affiliate of
PFPC Trust or of The PNC Financial Services Group, Inc., provided that
PFPC Trust gives the Fund 30 days' prior written notice of such
assignment.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties.
(b) No Representations or Warranties. Except as expressly provided
in this Agreement, PFPC Trust hereby disclaims all
representations and warranties, express or implied, made to
the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to
services provided under this Agreement. PFPC Trust disclaims
any warranty of title or non-infringement except as otherwise
set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees
not to make any modifications to its
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registration statement or adopt any policies which would
affect materially the obligations or responsibilities of PFPC
Trust hereunder without the prior written approval of PFPC
Trust, which approval shall not be unreasonably withheld or
delayed.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(e) Information. The Fund will provide such information and
documentation as PFPC Trust may reasonably request in
connection with services provided by PFPC Trust to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(h) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(i) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) Customer Identification Program Notice. To help the U.S.
government fight the funding of terrorism and money laundering
activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information
that identifies each person who initially opens an account
with that financial institution on or after October 1, 2003.
Consistent with this requirement, PFPC Trust may request (or
may have already requested) the Fund's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural person,
that party's date of birth. PFPC Trust may also ask (and may
have already asked) for
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additional identifying information, and PFPC Trust may take
steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, XX
------------------------------
Title: Vice President
------------------------------
SIT MID CAP GROWTH FUND, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Title: Vice President
------------------------------
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CUSTODIAN SERVICES AGREEMENT
----------------------------
THIS AGREEMENT is made as of June 3, 2005 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and SIT MUTUAL FUNDS, INC., a Minnesota corporation (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person authorized by the Fund to give Oral or Written
Instructions on behalf of the Fund. An Authorized Person's
scope of authority may be limited by setting forth such
limitation in a written document signed by both parties
hereto.
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(d) "Book-Entry System" means the Federal Reserve Treasury
book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry system or clearing agency
registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably
believed by PFPC Trust to be an Authorized Person. PFPC Trust
may, in its sole discretion in each separate instance,
consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series
or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC
Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC
Trust to be Authorized Persons) and received by PFPC Trust or
(ii) trade instructions transmitted by means of an electronic
transaction reporting system which requires the use of a
password or other authorized identifier in order to gain
access. The instructions may be delivered electronically (with
respect to sub-item (ii) above) or by hand, mail or facsimile
sending device.
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2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein, on behalf of each of its
investment portfolios (each, a "Portfolio"), and PFPC Trust accepts
such appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties
to be performed by PFPC Trust hereunder. Except as specifically set
forth herein, PFPC Trust assumes no responsibility for such compliance
by the Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction
or Written Instruction it receives pursuant to this Agreement.
PFPC Trust may assume that any Oral Instructions or Written
Instructions received hereunder are not in any way
inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the
Fund's Board of Directors or of the Fund's shareholders,
unless and until PFPC Trust receives Written Instructions to
the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions from Authorized Persons so that
PFPC Trust receives the Written Instructions by the close of
business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions
are not received by PFPC Trust or differ from the Oral
Instructions shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
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5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action
it should or should not take, PFPC Trust may request
directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC Trust may request advice from counsel of its
own reasonable choosing (who may be counsel for the Fund, the
Fund's investment adviser or PFPC Trust, at the option of PFPC
Trust).
(c) Conflicting Advice. In the event of a conflict between
directions or advice or Oral Instructions or Written
Instructions PFPC Trust receives from the Fund, and the advice
it receives from counsel, PFPC Trust shall be entitled to rely
upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by
the Fund and without liability for any action PFPC Trust takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC Trust receives from
or on behalf of the Fund or in reliance upon advice from
counsel reasonably chosen by PFPC Trust and which PFPC Trust
believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written
Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all
times during PFPC Trust's normal business hours. Upon the reasonable
request of the
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Fund, copies of any such books and records shall be provided by PFPC
Trust to the Fund or to an authorized representative of the Fund, at
the Fund's expense.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that
is competitively sensitive material, and not generally known to the
public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships,
customer profiles, customer lists, sales estimates, business plans, and
internal performance results relating to the past, present or future
business activities of the Fund or PFPC Trust, their respective
subsidiaries and affiliated companies; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that
is commercially valuable and secret in the sense that its
confidentiality affords the Fund or PFPC Trust a competitive advantage
over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and
trade secrets, whether or not patentable or copyrightable; and (d)
anything designated as confidential. Notwithstanding the foregoing,
information shall not be Confidential Information and shall not be
subject to such confidentiality obligations if: (a) it is already known
to the receiving party at the time it is obtained; (b) it is or becomes
publicly known or available through no wrongful act of the receiving
party; (c) it is rightfully received from a third party who, to the
best of the receiving party's knowledge, is not under a duty of
confidentiality; (d) it is released by the protected party to a third
party without restriction; (e) it is requested or required to be
disclosed by the receiving party pursuant to a court order, subpoena,
governmental or regulatory agency request or law (provided the
receiving party will provide the other party written notice of the
same, to the extent such notice is permitted); (f) release of such
information by PFPC Trust is necessary or desirable in connection with
the provision of services under this Agreement;
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(g) it is relevant to the defense of any claim or cause of action
asserted against the receiving party; or (h) it has been or is
independently developed or obtained by the receiving party.
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants
as reasonably requested by the Fund.
9. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund, on behalf of each
of the Portfolios, will pay to PFPC Trust a fee or fees as may
be agreed to in writing from time to time by the Fund and PFPC
Trust. The Fund acknowledges that PFPC Trust may receive float
benefits in connection with maintaining certain accounts
required to provide services under this Agreement.
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(b) The undersigned hereby represents and warrants to PFPC Trust
that (i) the terms of this Agreement, (ii) the fees and
expenses associated with this Agreement, and (iii) any
benefits accruing to PFPC Trust or to the adviser or sponsor
to the Fund in connection with this Agreement, including but
not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or
periodic payments made or to be made by PFPC Trust to such
adviser or sponsor or any affiliate of the Fund relating to
this Agreement have been fully disclosed to the Board of
Directors of the Fund and that, if required by applicable law,
such Board of Directors has approved or will approve the terms
of this Agreement, any such fees and expenses, and any such
benefits.
12. INDEMNIFICATION.
(a) The Fund, on behalf of each Portfolio, agrees to indemnify,
defend and hold harmless PFPC Trust (including its officers,
directors, agents and employees) from all taxes, charges,
expenses, assessments, claims and liabilities (including,
without limitation, reasonable attorneys' fees and
disbursements) arising from any action or omission to act
which PFPC Trust takes in connection with the provision of
services to the Fund; provided that PFPC Trust shall not be
indemnified, defended or held harmless against any liability
(or any expenses incident to such liability) caused by PFPC
Trust's own bad faith, negligence or reckless disregard in the
performance of PFPC Trust's activities under this Agreement.
Any amounts payable by the Fund hereunder shall be satisfied
only against the relevant Portfolio's assets and not against
the assets of any other Portfolio.
(b) PFPC Trust agrees to indemnify, defend and hold harmless the
Fund (including its officers, directors and employees) from
all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, reasonable
attorneys' fees and disbursements) arising out of PFPC Trust's
failure to perform its duties under this Agreement but only to
the extent such taxes,
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charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements) arise out of PFPC Trust's bad faith, negligence
or reckless disregard of its duties under this Agreement;
provided that the Fund shall not (nor shall any Portfolio) be
indemnified, defended or held harmless against any liability
(or any expenses incident to such liability) caused by the
Fund's or any Portfolio's own bad faith, negligence or
reckless disregard relating to the activities to which this
Agreement relates.
(c) The provisions of this Section 12 shall survive termination of
this Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder
on behalf of the Fund or any Portfolio except as specifically
set forth herein or as may be specifically agreed to by PFPC
Trust and the Fund in a written amendment hereto. PFPC Trust
shall be obligated to exercise care and diligence in the
performance of its duties hereunder and to act in good faith
in performing services provided for under this Agreement. PFPC
Trust shall be liable only for and shall be required to
indemnify, defend and hold harmless the Fund (including its
officers, directors and employees) only from any taxes,
charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements) arising out of PFPC Trust's failure to perform
its duties under this Agreement and only to the extent such
taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, reasonable attorneys' fees and
disbursements) arise out of PFPC Trust's bad faith, negligence
or reckless disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
(i) PFPC Trust shall not be liable for losses, delays,
failure, errors, interruption or loss of data occurring
directly or indirectly by reason of circumstances beyond its
reasonable control, including without limitation acts of God;
action or inaction of civil or military authority; public
enemy; war; terrorism; riot; fire; flood;
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sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and (ii) PFPC Trust shall not be under any duty
or obligation to inquire into and shall not be liable for the
validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC
Trust reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
(i) neither PFPC Trust nor its affiliates shall be liable for
any consequential, special or indirect losses or damages,
whether or not the likelihood of such losses or damages was
known by PFPC Trust or its affiliates, (ii) PFPC Trust's
cumulative liability to the Fund for all losses, claims,
suits, controversies, breaches or damages for any cause
whatsoever (including but not limited to those arising out of
or related to this Agreement) and regardless of the form of
action or legal theory shall not exceed the greater of
$250,000 or the fees received by PFPC Trust for services
provided hereunder during the 12 months immediately prior to
the date of such loss or damage (provided that, while the
dollar amount of any loss or damage caused by PFPC Trust's
fraud or gross negligence shall be included in calculating
whether the dollar limitations set forth in the foregoing
damage cap specified in this sub-section (ii) have been
reached, the foregoing damage cap specified in this
sub-section (ii) shall not otherwise limit PFPC Trust's
liability for loss or damage shown to be caused by PFPC
Trust's fraud or gross negligence) and (iii) PFPC Trust shall
not have any responsibility with respect to the acts,
omissions or operations of any Book-Entry System or other
depository (unless the same arise out of PFPC Trust's bad
faith, negligence or reckless disregard of its duties under
this Agreement).
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
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(e) For all purposes under this Agreement, reasonableness shall be
determined under the facts and circumstances prevailing in the
market where performance is rendered.
(f) Notwithstanding anything in this Agreement to the contrary
(other than as specifically provided in Section
14(h)(ii)(B)(4) and Section 14(h)(iii)(A) of this Agreement),
the Fund shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this
Agreement, or in respect of the Property or any collections
undertaken pursuant to this Agreement, which may be requested
by any relevant authority. In addition, the Fund shall be
solely responsible for the payment of all taxes and similar
items (including without limitation penalties and interest
related thereto).
(g) The provisions of this Section 13 shall survive termination of
this Agreement.
(h) Notwithstanding anything in this Agreement to the contrary,
PFPC Trust shall have no liability either for any error or
omission of any of its predecessors as servicer on behalf of
the Fund or for any failure to discover any such error or
omission.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the
Portfolios, including cash received as a result of the
distribution of Shares, during the term of this Agreement.
PFPC Trust will not be responsible for any assets until actual
receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain a separate
account for each separate Portfolio of the Fund (each an
"Account") and shall maintain in the Account of a particular
Portfolio all cash and other assets received from or for the
Fund specifically designated to such Account.
PFPC Trust shall make cash payments from or for the Account of
a Portfolio only for:
(i) purchases of securities in the name of a Portfolio,
PFPC Trust, PFPC Trust's nominee or a sub-custodian
or nominee thereof as provided in sub-section (j) and
for which PFPC Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice,
as appropriate;
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(ii) purchase or redemption of Shares of the Fund
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions,
interest, taxes (provided that tax which PFPC Trust
considers is required to be deducted or withheld "at
source" will be governed by Section 14(h)(iii)(B) of
this Agreement), administration, accounting,
distribution, advisory and management fees which are
to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the
transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for
the direct payment of cash dividends and
distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by
and among the Fund, PFPC Trust and the Fund's
transfer agent;
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund and
held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it
for the Accounts in a separate account that
physically segregates such securities from those of
any other persons, firms or corporations, except for
securities held in a Book-Entry System or through a
sub-custodian or depository. All such securities
shall be held or disposed of only upon Written
Instructions or otherwise pursuant to the terms of
this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except
upon the express terms of this Agreement or upon
Written Instructions authorizing the transaction. In
no case may any member of the Fund's Board of
Directors, or any officer, employee or agent of the
Fund withdraw any securities.
At PFPC Trust's own expense and for its own
convenience, PFPC Trust may enter into sub-custodian
agreements with other banks or trust companies to
perform duties described in this sub-section (c) with
respect to domestic assets. Such bank or trust
company shall have aggregate capital, surplus and
undivided profits, according to its last
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published report, of at least one million dollars
($1,000,000), if it is a subsidiary or affiliate of
PFPC Trust, or at least twenty million dollars
($20,000,000) if such bank or trust company is not a
subsidiary or affiliate of PFPC Trust. In addition,
such bank or trust company must be qualified to act
as custodian and agree to comply with the relevant
provisions of applicable rules and regulations. Any
such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise
provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements
with sub-custodians with respect to services
regarding foreign assets. Any such arrangement will
not be entered into without prior written notice to
the Fund (or as otherwise provided in the 1940 Act).
The Fund agrees that it will not hold foreign assets
with any sub-custodian not currently selected by PFPC
Trust in relation to the Fund.
PFPC Trust shall remain responsible for the acts and
omissions of any sub-custodian chosen by PFPC Trust
under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own
acts and omissions under this Agreement; provided
that, so long as PFPC Trust has chosen such a
sub-custodian (both initially and on an ongoing
basis) in the exercise of reasonable care, prudence
and diligence, PFPC Trust shall have no
responsibility relating to the insolvency of any such
sub-custodian.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust shall:
(i) deliver any securities held for a Portfolio against
the receipt of payment for the sale of such
securities or otherwise in accordance with standard
market practice;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating a
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Fund;
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(vii) release securities belonging to a Portfolio to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund
on behalf of that Portfolio; provided, however, that
securities shall be released only upon payment to
PFPC Trust of the monies borrowed, except that in
cases where additional collateral is required to
secure a borrowing already made subject to proper
prior authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note
or notes evidencing the loan;
(viii) release and deliver securities owned by a Portfolio
in connection with any repurchase agreement entered
into by the Fund on behalf of that Portfolio, but
only on receipt of payment therefor; and pay out
monies of the Fund in connection with such repurchase
agreements, but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Portfolios eligible for deposit
therein and will utilize Book-Entry Systems and other
depositories to the extent possible in connection with
settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities loaned,
subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to
perform such duties until it receives Written Instructions or
Oral Instructions authorizing contrary actions.
Notwithstanding anything in this Agreement to the contrary,
PFPC Trust's use of a Book-Entry System shall comply with the
requirements of Rule 17f-4 under the 1940 Act.
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PFPC Trust shall administer a Book-Entry System or other
depository as follows:
(i) With respect to securities of each Portfolio which
are maintained in a Book-Entry System or another
depository, the records of PFPC Trust shall identify
by book-entry or otherwise those securities as
belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in a Book-Entry
System or another depository will (to the extent
consistent with applicable law and standard practice)
at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other
assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request
from time to time.
(f) Registration of Securities. All securities held for a
Portfolio which are issued or issuable only in bearer form,
except such securities maintained in the Book-Entry System or
in another depository, shall be held by PFPC Trust in bearer
form; all other securities maintained for a Portfolio may be
registered in the name of the Fund on behalf of that
Portfolio, PFPC Trust, a Book-Entry System, another
depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Fund reserves the right to instruct PFPC
Trust as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to maintain
or deliver in proper form for transfer, or to register in the
name of its nominee or in the name of the Book-Entry System or
in the name of another appropriate entity, any securities
which it may maintain for the Accounts. With respect to
uncertificated securities which are registered in the name of
the Fund or a Portfolio (or a nominee thereof), PFPC Trust
will reflect such securities on its records based upon the
holdings information provided to it by the issuer of such
securities, but notwithstanding anything in this Agreement to
the contrary PFPC Trust shall not be obligated to safekeep
such securities or to perform other duties with respect to
such securities other than to make payment for the purchase of
such securities upon receipt of Oral or Written Instructions,
accept in sale proceeds received by PFPC Trust upon the sale
of such securities of which PFPC Trust is informed pursuant to
Oral or Written Instructions, and accept
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in other distributions received by PFPC Trust with respect to
such securities or reflect on its records any reinvested
distributions with respect to such securities of which it is
informed by the issuer of the securities.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of a Portfolio, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of another entity, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting
materials received by PFPC Trust as custodian of the Property
to the registered holder of such securities. If the registered
holder is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person
who owns such securities.
(h) Transactions Not Requiring Instructions. Notwithstanding
anything in this Agreement requiring instructions in order to
take a particular action, in the absence of a contrary Written
Instruction, PFPC Trust is authorized to take the following
actions without the need for instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each
Portfolio, all income, dividends,
distributions, coupons, option premiums,
other payments and similar items, included
or to be included in the Property, and, in
addition, promptly advise each Portfolio of
such receipt and credit such income to each
Portfolio's custodian account;
(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of each
Portfolio all securities received as a
distribution on the Portfolio's securities
as a result of a stock dividend, share
split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to
any securities belonging to a Portfolio and
held by PFPC Trust hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be called, redeemed, retired or otherwise
become payable (on a mandatory basis) on the
date such securities become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement
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for collection of checks, drafts, and other
negotiable instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of a
Portfolio in accordance with street
delivery custom;
(2) for the exchange of interim
receipts or temporary securities
for definitive securities; and
(3) for transfer of securities into the
name of the Fund on behalf of a
Portfolio or PFPC Trust or a
sub-custodian or a nominee of one
of the foregoing, or for exchange
of securities for a different
number of bonds, certificates, or
other evidence, representing the
same aggregate face amount or
number of units bearing the same
interest rate, maturity date and
call provisions, if any; provided
that, in any such case, the new
securities are to be delivered to
PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment
for the account of each Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of each Portfolio;
(3) hold for the account of each
Portfolio all stock dividends,
rights and similar securities
issued with respect to any
securities held by PFPC Trust; and
(4) subject to receipt of such
documentation and information as
PFPC Trust may request, execute as
agent on behalf of the Fund all
necessary ownership certificates
required by a national governmental
taxing authority or under the laws
of any U.S. state now or hereafter
in effect, inserting the Fund's
name, on behalf of a Portfolio, on
such certificate as the owner of
the securities covered thereby, to
the extent it may lawfully do so.
(iii) Other Matters.
(A) subject to receipt of such documentation and
information as PFPC Trust may request, PFPC
Trust will, in such jurisdictions as PFPC
Trust may agree from time to time, seek to
reclaim or obtain a reduction with respect
to any withholdings or other taxes relating
to assets maintained hereunder (provided
that PFPC Trust will
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not be liable for failure to obtain any
particular relief in a particular
jurisdiction); and
(B) PFPC Trust is authorized to deduct or
withhold any sum in respect of tax which
PFPC Trust considers is required to be
deducted or withheld "at source" by any
relevant law or practice.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of each Portfolio. Such accounts may be used to
transfer cash and securities, including securities in
a Book-Entry System or other depository:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for
other purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for a
Portfolio (or otherwise in accordance with standard
market practice) pay out of the monies held for the
account of the Portfolio the total amount payable to
the person from whom or the broker through
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whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in
such Oral Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made;
(vii) the location to which the security must be delivered
and delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the
total amount payable to the Portfolio upon such sale, provided
that the total amount payable is the same as was set forth in
the Oral Instructions or Written Instructions. Notwithstanding
anything to the contrary in this Agreement, PFPC Trust may
accept payment in such form as is consistent with standard
industry practice and may deliver assets and arrange for
payment in accordance with standard market practice.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account of
each Portfolio, listing each portfolio
security belonging to each Portfolio (with
the corresponding security identification
number) held at the end of such month and
stating the cash balance of each Portfolio
at the end of such month.
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
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(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Fund as to such
actions or events. For clarification, upon
termination of this Agreement PFPC Trust shall have
no responsibility to transmit such material or to
inform the Fund or any other person of such actions
or events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion
credit an Account with respect to income, dividends,
distributions, coupons, option premiums, other payments or
similar items prior to PFPC Trust's actual receipt thereof,
and in addition PFPC Trust may in its sole discretion credit
or debit the assets in an Account on a contractual settlement
date with respect to any sale, exchange or purchase applicable
to the Account; provided that nothing herein or otherwise
shall require PFPC Trust to make any advances or to credit any
amounts until PFPC Trust's actual receipt thereof. If PFPC
Trust credits an Account with respect to (a) income,
dividends, distributions, coupons, option premiums, other
payments or similar items on a contractual payment date or
otherwise in advance of PFPC Trust's actual receipt of the
amount due, (b) the proceeds of any sale or other disposition
of assets on the contractual settlement date or otherwise in
advance of PFPC Trust's actual receipt of the amount due or
(c) provisional crediting of any amounts due, and (i) PFPC
Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period
using reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so
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credited from the Fund. The Fund hereby grants to PFPC Trust
and to each sub-custodian utilized by PFPC Trust in connection
with providing services to the Fund a first priority
contractual possessory security interest in and a right of
setoff against the assets maintained in an Account hereunder
in the amount necessary to secure the return and payment to
PFPC Trust and to each such sub-custodian of any advance or
credit made by PFPC Trust and/or by such sub-custodian
(including charges related thereto) to such Account.
Notwithstanding anything in this Agreement to the contrary,
PFPC Trust shall be entitled to assign any rights it has under
this sub-section (m) to any sub-custodian utilized by PFPC
Trust in connection with providing services to the Fund which
sub-custodian makes any credits or advances with respect to
the Fund.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be
at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to
take legal action for collection unless and until reasonably
indemnified to its satisfaction. PFPC Trust shall also notify
the Fund as soon as reasonably practicable whenever income due
on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected
after a reasonable time.
(o) Excess Cash Sweep. PFPC Trust will, consistent with applicable
law, sweep any net excess cash balances daily into an
investment vehicle or other instrument designated in writing
by the Fund, so long as the investment vehicle or instrument
is acceptable to PFPC Trust, subject to a fee, paid to PFPC
Trust for such service, to be agreed between the parties. Such
investment vehicle or
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instrument may be offered by an affiliate of PFPC Trust or by
a PFPC Trust client and PFPC Trust may receive compensation
therefrom.
(p) Foreign Exchange. PFPC Trust and/or sub-custodians may enter
into or arrange foreign exchange transactions (at such rates
as they may consider appropriate) in order to facilitate
transactions under this Agreement, and such entities and/or
their affiliates may receive compensation in connection with
such foreign exchange transactions. PFPC Trust will not have
responsibility for an entity (including a sub-custodian) which
the Fund instructs it to use in connection with a foreign
exchange transaction.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of three (3) years (the
"Initial Term"), unless earlier terminated pursuant to Section
15(c) or 15(d) of this Agreement. After the Initial Term, this
Agreement shall automatically be renewed for successive terms
of three (3) years ("Renewal Terms") each, unless notice is
provided pursuant to Section 15(b) of this Agreement or unless
earlier terminated pursuant to Section 15(c) or 15(d) of this
Agreement.
(b) Either party may terminate this Agreement at the end of the
Initial Term or at the end of any subsequent Renewal Term upon
not than less than ninety (90) days or more than one
hundred-eighty (180) days prior written notice to the other
party.
(c) If a party hereto is guilty of a material failure to perform
its duties and obligations under this Agreement or under any
other custodian services agreement between PFPC Trust and a
registered investment company for which Sit Investment
Associates, Inc. (or a successor thereto) serves as the
investment adviser which other agreement provides for the same
or substantially similar services as this Agreement (a
"Defaulting Party"), which material failure results in a
material loss to the other party (i.e., either PFPC Trust on
one hand, or the Fund or such other
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registered investment company on the other hand), such other
party (the "Non-Defaulting Party") may give written notice
thereof to the Defaulting Party, and if such material breach
shall not have been remedied within thirty (30) days after
such written notice is given, then the Non-Defaulting Party
may terminate this Agreement by giving thirty (30) days
written notice of such termination to the Defaulting Party. In
all cases, termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting Party of any other
rights it might have under this Agreement or otherwise against
the Defaulting Party.
(d) Notwithstanding anything contained in the foregoing provisions
of this Section 15 to the contrary, the Fund may terminate
this Agreement for any reason, or no reason, upon ninety (90)
days written notice to PFPC Trust.
(e) In the event of any termination of this Agreement prior to the
expiration of the then current Initial Term or Renewal Term
(including termination pursuant to Section 15(d) of this
Agreement prior to the expiration of the then current Initial
Term or Renewal Term but not including termination pursuant to
Section 15(c) of this Agreement), the Fund shall immediately
pay to PFPC Trust the amount of $69,000.
(f) In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the shareholders of
the Fund to dissolve or to function without a custodian of its
cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios
to the Fund. It may deliver them to a bank or trust company of
PFPC Trust's choice, having aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those
of this Agreement. PFPC Trust shall not be required to make
any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs, expenses and other amounts owing to it
under Section 15 of
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this Agreement (including without limitation fees and expenses
associated with deconversion or conversion to another service
provider and other trailing expenses incurred by PFPC Trust).
PFPC Trust shall have a first priority contractual possessory
security interest in and shall have a right of setoff against
the Property as security for the payment of such fees,
compensation, costs, expenses and other amounts owing to it
under Section 15 of this Agreement.
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at 3300 IDS Center, 00
Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention:
President; or (c) if to neither of the foregoing, at such other address
as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming electronic delivery, hand or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given five days after
it has been mailed. If notice is sent by messenger, it shall be deemed
to have been given on the day it is delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. ASSIGNMENT. PFPC Trust may assign this Agreement to any affiliate of
PFPC Trust or of The PNC Financial Services Group, Inc., provided that
PFPC Trust gives the Fund 30 days' prior written notice of such
assignment.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their
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agreement, if any, with respect to delegated duties.
(b) No Representations or Warranties. Except as expressly provided
in this Agreement, PFPC Trust hereby disclaims all
representations and warranties, express or implied, made to
the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to
services provided under this Agreement. PFPC Trust disclaims
any warranty of title or non-infringement except as otherwise
set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees
not to make any modifications to its registration statement or
adopt any policies which would affect materially the
obligations or responsibilities of PFPC Trust hereunder
without the prior written approval of PFPC Trust, which
approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(e) Information. The Fund will provide such information and
documentation as PFPC Trust may reasonably request in
connection with services provided by PFPC Trust to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(h) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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(i) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) Customer Identification Program Notice. To help the U.S.
government fight the funding of terrorism and money laundering
activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information
that identifies each person who initially opens an account
with that financial institution on or after October 1, 2003.
Consistent with this requirement, PFPC Trust may request (or
may have already requested) the Fund's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural person,
that party's date of birth. PFPC Trust may also ask (and may
have already asked) for additional identifying information,
and PFPC Trust may take steps (and may have already taken
steps) to verify the authenticity and accuracy of these data
elements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, XX
------------------------------
Title: Vice President
SIT MUTUAL FUNDS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Title: Vice President
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