1
Exhibit (g)(1)
FORM OF
CUSTODY AGREEMENT
THIS AGREEMENT is made effective the 26th day of July, 2000, by and
between STATE STREET BANK AND TRUST COMPANY, a trust company chartered under the
laws of the commonwealth of Massachusetts, having its principal office at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000("Xxxxx Street"), and each
registered investment company listed on Schedule A hereto, as it may be amended
from time to time, incorporated herein by reference, each having its principal
office and place of business at Two Renaissance Square, 0000 Xxxx Xxxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000 (each a "Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint State Street as custodian of the
assets of the Fund's investment portfolio or portfolios (each a "Portfolio", and
collectively the "Portfolios"); and
WHEREAS, State Street is willing to accept such appointment on the
terms and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and
appoints State Street as custodian of the investment securities,
interests in loans and other non-cash investment property, and monies
at any time owned by each of the Portfolios and delivered to State
Street as custodian hereunder ("Assets").
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to State
Street:
1. That it is a trust duly organized and existing and in
good standing under the laws of its state of
organization, and that it is registered under the
Investment Company Act of 1940, as amended (the "1940
Act"); and
2. That it has the requisite power and authority under
applicable law and its declaration of trust) to enter
into this Agreement; it has taken all requisite
action necessary to appoint State Street as custodian
for the Portfolios; this Agreement has been duly
executed and delivered by Fund; and this Agreement
constitutes a legal, valid and binding obligation of
Fund, enforceable in accordance with its terms.
B. State Street hereby represents, warrants and acknowledges to
Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the commonwealth of
Massachusetts; and
2
2. That it has the requisite power and authority under
applicable law, its charter and its bylaws to enter
into and perform this Agreement; this Agreement has
been duly executed and delivered by State Street; and
this Agreement constitutes a legal, valid and binding
obligation of State Street, enforceable in accordance
with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. Delivery of Assets. Except as permitted by the 1940 Act, Fund
will deliver or cause to be delivered to State Street on the
effective date hereof, or as soon thereafter as practicable,
and from time to time thereafter, all Assets acquired by,
owned by or from time to time coming into the possession of
each of the Portfolios during the term hereof. State Street
has no responsibility or liability whatsoever for or on
account of assets not so delivered.
B. Delivery of Accounts and Records. Fund will turn over or cause
to be turned over to State Street all of each Portfolio's
relevant accounts and records needed by State Street to
perform its duties and responsibilities hereunder fully and
properly . State Street may rely conclusively on the
completeness and correctness of such accounts and records.
C. Delivery of Assets to Third Parties. State Street will receive
delivery of and keep safely the Assets of each Portfolio
segregated in a separate account. Upon delivery of any such
Assets to a subcustodian appointed pursuant hereto
(hereinafter referred to as "Subcustodian"), State Street will
create and maintain records identifying such Assets as
belonging to the applicable Portfolio. State Street is
responsible for the safekeeping of the Assets only until they
have been transmitted to and received by other persons as
permitted under the terms hereof, except for Assets
transmitted to Subcustodians, for which State Street remains
responsible to the extent provided herein. State Street may
participate directly or indirectly through a subcustodian in
the Depository Trust Company (DTC), Treasury/Federal Reserve
Book Entry System (Fed System), Participant Trust Company
(PTC) or other depository approved by Fund (as such entities
are defined at 17 CFR Section 270.17f-4(b)) (each a
"Depository" and collectively the "Depositories"). State
Street will be responsible to Fund for any loss, damage or
expense suffered or incurred by Fund resulting from the
actions or omissions of any Depository only to the same extent
such Depository is responsible to State Street.
D. Registration. State Street will at all times hold registered
Assets in the name of State Street as custodian, the
applicable Portfolio, or a nominee of either of them, unless
specifically directed by Instructions, as hereinafter defined,
to hold such registered Assets in so-called "street name;"
provided that, in any event, State Street will hold all such
Assets in an account of State Street as custodian containing
only Assets of the applicable Portfolio, or only assets held
by State Street as a fiduciary or custodian for customers; and
provided further, that State Street's records at all times
will indicate the Portfolio or other customer for which such
Assets are held and the
3
respective interests therein. If, however, Fund directs State
Street to maintain Assets in "street name", notwithstanding
anything contained herein to the contrary, State Street will
be obligated only to utilize its best efforts to timely
collect income due the Portfolio on such Assets and to notify
the Portfolio of relevant information, such as maturities and
pendency of calls, and corporate actions including, without
limitation, calls for redemption, tender or exchange offers,
declaration, record and payment dates and amounts of any
dividends or income, reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, or
conversion ("Corporate Actions"). All Assets and the ownership
thereof by Portfolio will at all times be identifiable on the
records of State Street. Fund agrees to hold State Street and
its nominee harmless for any liability as a shareholder of
record of securities held in custody.
E. Exchange. Upon receipt of Instructions, State Street will
exchange, or cause to be exchanged, Assets held for the
account of a Portfolio for other Assets issued or paid in
connection with any Corporate Action or otherwise, and will
deposit any such Assets in accordance with the terms of any
such Corporate Action. Without Instructions, State Street is
authorized to exchange Assets in temporary form for Assets in
definitive form, to effect an exchange of shares when the par
value of stock is changed, and, upon receiving payment
therefor, to surrender bonds or other Assets at maturity or
when advised of earlier call for redemption, except that State
Street will receive Instruction prior to surrendering any
convertible security.
F. Purchases of Investments -- Other Than Options and Futures. On
each business day on which a Portfolio makes a purchase of
Assets other than options and futures, Fund will deliver to
State Street Instructions specifying with respect to each such
purchase:
1. If applicable, the name of the Portfolio making such
purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount
purchased, and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage
commission, taxes and other expenses payable in
connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or
dealer through whom the purchase was made; and
9. Whether the Asset is to be received in certificated
form or via a specified Depository.
In accordance with such Instructions, State Street will pay
for out of monies held for the purchasing Portfolio, but only
insofar as such monies are available for such purpose, and
receive the Assets so purchased by or for the account of such
Portfolio, except that State Street, or a Subcustodian, may in
its sole discretion advance funds to such Portfolio which may
result in an overdraft because the monies held on behalf of
such Portfolio are insufficient to pay the total amount
payable upon such purchase.
3
4
Except as otherwise instructed by Fund, State Street will make
such payment only upon receipt of Assets: (a) by State Street;
(b) by a clearing corporation of a national exchange of which
State Street is a member; or (c) by a Depository.
Notwithstanding the foregoing, (i) State Street may release
funds to a Depository prior to the receipt of advice from the
Depository that the Assets underlying a repurchase agreement
have been transferred by book-entry into the account
maintained with such Depository by State Street on behalf of
its customers; provided that State Street's instructions to
the Depository require that the Depository make payment of
such funds only upon transfer by book-entry of the Assets
underlying the repurchase agreement in such account; (ii)
State Street may make payment for time deposits, call account
deposits, currency deposits and other deposits, foreign
exchange transactions, futures contracts or options, before
receipt of an advice or confirmation evidencing said deposit
or entry into such transaction; and (iii) State Street may
make, or cause a Subcustodian to make, payment for the
purchase of Assets the settlement of which occurs outside of
the United States of America in accordance with generally
accepted local custom and market practice.
G. Sales and Deliveries of Investments -- Other Than Options and
Futures. On each business day on which a Portfolio makes a
sale of Assets other than options and futures, Fund will
deliver to State Street Instructions specifying with respect
to each such sale:
1. If applicable, the name of the Portfolio making such
sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and
accrued interest, if any;
4. The date on which the Assets sold were purchased or
other information identifying the Assets sold and to
be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission,
taxes or other expenses payable in connection with
such sale;
8. The total amount to be received by the Portfolio upon
such sale; and
9. The name and address of the broker or dealer through
whom or person to whom the sale was made.
State Street will deliver or cause to be delivered the Assets
thus designated as sold for the account of the selling
Portfolio as specified in the Instructions. Except as
otherwise instructed by Fund, State Street will make such
delivery upon receipt of: (a) payment therefor in such form as
is satisfactory to State Street; (b) credit to the account of
State Street with a clearing corporation of a national
securities exchange of which State Street is a member; or (c)
credit to the account maintained by State Street on behalf of
its customers with a Depository. Notwithstanding the
foregoing: (i) State Street will deliver Assets held in
physical form in accordance with "street delivery custom" to a
broker or its clearing agent; or (ii) State Street may make,
or cause a Subcustodian to make, delivery of Assets the
settlement of which occurs outside of the United States of
America upon payment therefor in accordance with generally
accepted local custom and market practice.
4
5
H. Purchases or Sales of Options and Futures. On each business
day on which a Portfolio makes a purchase or sale of the
options and/or futures listed below, Fund will deliver to
State Street Instructions specifying with respect to each such
purchase or sale:
1. If applicable, the name of the Portfolio making such
purchase or sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or
call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer
through whom the sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening,
exercising, expiring or closing transaction;
h. Whether the transaction involves a put or
call;
i. Whether the option is written or purchased;
and
j. The name and address of the broker or dealer
through whom the sale or purchase was made,
or other applicable settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the
contract and, when available, the closing
level, thereof;
b. The index level on the date the contract is
entered into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to Instructions, and if not already
in the possession of State Street, Fund will
deliver a substantially complete and
executed custodial safekeeping account and
procedural agreement, incorporated herein by
reference); and
5
6
f. The name and address of the futures
commission merchant through whom the sale or
purchase was made, or other applicable
settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or
call;
h. Whether the option is written or purchased;
and
i. The market on which the option is traded.
I. Assets Pledged or Loaned. If specifically allowed for in the
prospectus of a Portfolio, and subject to such additional
terms and conditions as State Street may require:
1. Upon receipt of Instructions, State Street will
release or cause to be released Assets to the
designated pledgee by way of pledge or hypothecation
to secure any loan incurred by a Portfolio; provided,
however, that State Street will release Assets only
upon payment to State Street of the monies borrowed,
except that in cases where additional collateral is
required to secure a borrowing already made, further
Assets may be released or caused to be released for
that purpose. Upon receipt of Instructions, State
Street will pay, but only from funds available for
such purpose, any such loan upon redelivery to it of
the Assets pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
2. Upon receipt of Instructions, State Street will
release Assets to the designated borrower; provided,
however, that the Assets will be released only upon
deposit with State Street of full cash collateral as
specified in such Instructions, and that the lending
Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets. Upon
receipt of Instructions and the loaned Assets, State
Street will release the cash collateral to the
borrower.
J. Routine Matters. State Street will, in general, attend to all
routine and mechanical matters in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings
with the Assets except as may be otherwise provided herein or
upon Instruction from Fund.
6
7
K. Deposit Accounts. State Street will open and maintain one or
more special purpose deposit accounts for each Portfolio in
the name of State Street in such banks or trust companies
(including, without limitation, affiliates of State Street) as
may be designated by it or Fund in writing ("Accounts"),
subject only to draft or order by State Street upon receipt of
Instructions. State Street will deposit all monies received by
State Street from or for the account of a Portfolio in an
Account maintained for such Portfolio. Subject to Section 5.L
hereof, State Street agrees:
1. To make Fed Funds available to the applicable
Portfolio at 9:00 a.m., Kansas City time, on the
second business day after deposit of any check into
an Account, in the amount of the check;
2. To make funds available immediately upon a deposit
made by Federal Reserve wire; and
3. To make funds available on the next business day
after deposit of ACH wires.
L. Income and Other Payments. State Street will:
1. Collect, claim and receive and deposit for the
account of the applicable Portfolio all income
(including income from the Accounts) and other
payments which become due and payable on or after the
effective date hereof with respect to the Assets, and
credit the account of such Portfolio in accordance
with the schedule attached hereto as Exhibit A. If,
for any reason, a Portfolio is credited with income
that is not subsequently collected, State Street may
reverse that credited amount. If monies are collected
after such reversal, State Street will credit the
Portfolio in that amount;
2. Execute ownership and other certificates and
affidavits for all federal, state and local tax
purposes in connection with the collection of bond
and note coupons; and
3. Take such other action as may be necessary or proper
in connection with (a) the collection, receipt and
deposit of such income and other payments, including
but not limited to the presentation for payment of
all coupons and other income items requiring
presentation; and all other Assets which may mature
or be called, redeemed, retired or otherwise become
payable and regarding which State Street has actual
knowledge, or should reasonably be expected to have
knowledge; and (b) the endorsement for collection, in
the name of Fund or a Portfolio, of all checks,
drafts or other negotiable instruments.
State Street, however, will not be required to institute suit
or take other extraordinary action to enforce collection
except upon receipt of Instructions and upon being indemnified
to its satisfaction against the costs and expenses of such
suit or other actions. State Street will receive, claim and
collect all stock dividends, rights and other similar items
and will deal with the same pursuant to Instructions.
7
8
M. Proxies and Notices. State Street will promptly deliver or
mail (or have delivered or mailed) to Fund all proxies
properly signed, all notices of meetings, all proxy statements
and other notices, requests or announcements affecting or
relating to Assets and will, upon receipt of Instructions,
execute and deliver or mail (or cause its nominee to execute
and deliver or mail) such proxies or other authorizations as
may be required. Except as provided herein or pursuant to
Instructions hereafter received by State Street, neither it
nor its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any
proxy, power of attorney, or other similar instrument voting
any of such Assets, or give any consent, approval or waiver
with respect thereto, or take any other similar action.
N. Disbursements. State Street will pay or cause to be paid,
insofar as funds are available for the purpose, bills,
statements and other obligations of each Portfolio (including
but not limited to obligations in connection with the
conversion, exchange or surrender of Assets, interest charges,
dividend disbursements, taxes, management fees, custodian
fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and other
operating expenses of such Portfolio) pursuant to Instructions
setting forth the name of the person to whom payment is to be
made, and the amount and purpose of the payment.
O. Daily Statement of Accounts. State Street will, within a
reasonable time, render to Fund a detailed statement of the
amounts received or paid and of Assets received or delivered
for the account of each Portfolio during each business day.
State Street will maintain such books and records as are
necessary to enable it to render, from time to time upon
request by Fund, a detailed statement of the Assets. State
Street will permit, and upon Instruction will cause any
Subcustodian to permit, such persons as are authorized by
Fund, including Fund's independent public accountants,
reasonable access to such records or will provide reasonable
confirmation of the contents of such records, and if demanded,
State Street will permit, and will cause any Subcustodian to
permit, federal and state regulatory agencies to examine the
Assets, books and records of the Portfolios.
P. Appointment of Subcustodians. Notwithstanding any other
provisions hereof:
1. All or any of the Assets may be held in State
Street's own custody or in the custody of one or more
other banks or trust companies (including, without
limitation, affiliates of State Street) acting as
Subcustodians as may be selected by State Street. Any
such Subcustodian selected by State Street must have
the qualifications required for a custodian under the
0000 Xxx. Xxxxx Xxxxxx will be responsible to the
applicable Portfolio for any loss, damage or expense
suffered or incurred by such Portfolio resulting from
the actions or omissions of any Subcustodians
selected and appointed by State Street (except
Subcustodians appointed at the request of Fund and as
provided in Subsection 2 below) to the same extent
State Street would be responsible to Fund hereunder
if it committed the act or omission itself.
2. Upon request of Fund, State Street will contract with
other Subcustodians reasonably acceptable to State
Street for purposes of (a) effecting third-party
8
9
repurchase transactions with banks, brokers, dealers,
or other entities through the use of a common
custodian or subcustodian, or (b) providing
depository and clearing agency services with respect
to certain variable rate demand note securities, or
(c) for other reasonable purposes specified by Fund;
provided, however, that State Street will be
responsible to Fund for any loss, damage or expense
suffered or incurred by Fund resulting from the
actions or omissions of any such Subcustodian only to
the same extent such Subcustodian is responsible to
State Street. Fund may review State Street's
contracts with such Subcustodians.
Q. Foreign Custody Manager.
1. Delegation to State Street as FCM. The Fund, pursuant
to resolution adopted by its Board of Trustees or
Directors (the "Board"), hereby delegates to State
Street, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Section Q with
respect to Foreign Assets held outside the United
States, and State Street hereby accepts such
delegation, as Foreign Custody Manager ("FCM") of
each Portfolio.
2. Definitions. Capitalized terms in this Section Q have
the following meanings:
"Country Risk" means all factors reasonably related
to the systemic risk of holding Foreign Assets in a
particular country including, but not limited to,
such country's political environment; economic and
financial infrastructure (including financial
institutions such as any Mandatory Securities
Depositories operating in the country); prevailing or
developing custody and settlement practices; and laws
and regulations applicable to the safekeeping and
recovery of Foreign Assets held in custody in that
country.
"Eligible Foreign Custodian" has the meaning set
forth in section (a)(1) of Rule 17f-5, except that
the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Portfolios'
investments (including foreign currencies) for which
the primary market is outside the United States and
such cash and cash equivalents in amounts deemed by
Fund to be reasonably necessary to effect the
Portfolios' transactions in such investments.
"Foreign Custody Manager" or "FCM" has the meaning
set forth in section (a)(2) of Rule 17f-5.
"Mandatory Securities Depository" means a foreign
securities depository or clearing agency that, either
as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country
outside the United States (i) because required by law
or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or
clearing agency; or (iii) because maintaining or
effecting trades in securities outside the foreign
9
10
securities depository or clearing agency is not
consistent with prevailing or developing custodial or
market practices.
3. Countries Covered. The FCM is responsible for
performing the delegated responsibilities defined
below only with respect to the countries and custody
arrangements for each such country listed on Exhibit
C hereto , which may be amended from time to time by
the FCM. The FCM will list on Exhibit C the Eligible
Foreign Custodians selected by the FCM to maintain
the assets of each Portfolio. Mandatory Securities
Depositories are listed on Exhibit D hereto, which
Exhibit D may be amended from time to time by the
FCM. The FCM will provide amended versions of
Exhibits C and D in accordance with subsection 7 of
this Section Q.
Upon the receipt by the FCM of Instructions to open
an account, or to place or maintain Foreign Assets,
in a country listed on Exhibit C, and the fulfillment
by the Fund of the applicable account opening
requirements for such country, the FCM is deemed to
have been delegated by the Board responsibility as
FCM with respect to that country and to have accepted
such delegation. Following the receipt of
Instructions directing the FCM to close the account
of a Portfolio with the Eligible Foreign Custodian
selected by the FCM in a designated country, the
delegation by the Board to State Street as FCM for
that country is deemed to have been withdrawn and
State Street will immediately cease to be the FCM of
the Portfolio with respect to that country.
The FCM may withdraw its acceptance of delegated
responsibilities with respect to a designated country
upon written notice to the Fund. Thirty days (or such
longer period as to which the parties agree in
writing) after receipt of any such notice by the
Fund, State Street will have no further
responsibility as FCM to a Portfolio with respect to
the country as to which State Street's acceptance of
delegation is withdrawn.
4. Scope of Delegated Responsibilities.
a. Selection of Eligible Foreign Custodians.
Subject to the provisions of this Section Q,
the FCM may place and maintain the Foreign
Assets in the care of the Eligible Foreign
Custodian selected by the FCM in each
country listed on Exhibit C, as amended from
time to time.
In performing its delegated responsibilities
as FCM to place or maintain Foreign Assets
with an Eligible Foreign Custodian, the FCM
will determine that the Foreign Assets will
be subject to reasonable care, based on the
standards applicable to custodians in the
country in which the Foreign Assets will be
held by that Eligible Foreign Custodian,
after considering all factors relevant to
the safekeeping of such assets, including,
without limitation, those set forth in Rule
17f-5(c)(1)(i) through (iv).
10
11
b. Contracts With Eligible Foreign Custodians.
The FCM will determine that the contract (or
the rules or established practices or
procedures in the case of an Eligible
Foreign Custodian that is a foreign
securities depository or clearing agency)
governing the foreign custody arrangements
with each Eligible Foreign Custodian
selected by the FCM will provide reasonable
care for the Foreign Assets held by that
Eligible Foreign Custodian based on the
standards applicable to custodians in the
particular country. Each such contract will
include the provisions set forth in Rule
17f-5(c)(2)(I)(A) through (F), or, in lieu
of any or all of the provisions set forth in
said (A) through (F), such other provisions
that the FCM determines will provide, in
their entirety, the same or greater level of
care and protection for the Foreign Assets
as the provisions set forth in said (A)
through (F) in their entirety.
c. Monitoring. In each case in which the FCM
maintains Foreign Assets with an Eligible
Foreign Custodian selected by the FCM, the
FCM will establish a system to monitor (a)
the appropriateness of maintaining the
Foreign Assets with such Eligible Foreign
Custodian and (b) the contract governing the
custody arrangements established by the FCM
with the Eligible Foreign Custodian. In the
event the FCM determines that the custody
arrangements with an Eligible Foreign
Custodian it has selected are no longer
appropriate, the FCM will notify the Board
in accordance with subsection 7 of this
Section Q.
5. Guidelines for the Exercise of Delegated Authority.
For purposes of this Section Q, the Board will be
solely responsible for considering and determining to
accept such Country Risk as is incurred by placing
and maintaining the Foreign Assets in each country
for which State Street is serving as FCM of a
Portfolio, and the Board will be solely responsible
for monitoring on a continuing basis such Country
Risk to the extent that the Board considers necessary
or appropriate. The Fund, on behalf of the
Portfolios, and State Street each expressly
acknowledge that the FCM will not be delegated any
responsibilities under this Section Q with respect to
Mandatory Securities Depositories.
6. Standard of Care as FCM of a Portfolio. In performing
the responsibilities delegated to it, the FCM agrees
to exercise reasonable care, prudence and diligence
such as a person having responsibility for the
safekeeping of assets of management investment
companies registered under the 1940 Act would
exercise.
7. Reporting Requirements. The FCM will report the
withdrawal of the Foreign Assets from an Eligible
Foreign Custodian and the placement of such Foreign
Assets with another Eligible Foreign Custodian by
providing to the Board amended Exhibits C and D at
the end of the calendar quarter in which an
11
12
amendment to either Schedule has occurred. The FCM
will make written reports notifying the Board of any
other material change in the foreign custody
arrangements of a Portfolio described in this Section
Q after the occurrence of the material change.
8. Representations with Respect to Rule 17f-5. The FCM
represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.
The Fund represents to State Street that the Board
has determined that it is reasonable for the Board to
rely on State Street to perform the responsibilities
delegated pursuant to this Contract to State Street
as the FCM of each Portfolio.
9. Effective Date and Termination of State Street as
FCM. The Board's delegation to State Street as FCM of
a Portfolio will be effective as of the date hereof
and will remain in effect until terminated at any
time, without penalty, by written notice from the
terminating party to the non-terminating party.
Termination will become effective thirty days after
receipt by the non-terminating party of such notice.
The provisions of subsection 3 of this Section Q
govern the delegation to and termination of State
Street as FCM of the Fund with respect to designated
countries.
R. Accounts and Records Property of Fund. State Street
acknowledges that all of the accounts and records maintained
by State Street pursuant hereto are the property of Fund, and
will be made available to Fund for inspection or reproduction
within a reasonable period of time, upon demand. State Street
will assist Fund's independent auditors, or upon the prior
written approval of Fund, or upon demand, any regulatory body,
in any requested review of Fund's accounts and records,
provided that Fund will reimburse State Street for all
expenses and employee time invested in any such review outside
of routine and normal periodic reviews. Upon receipt from Fund
of the necessary information or instructions, State Street
will supply information from the books and records it
maintains for Fund that Fund may reasonably request for tax
returns, questionnaires, periodic reports to shareholders and
such other reports and information requests as Fund and State
Street may agree upon from time to time.
S. Adoption of Procedures. State Street and Fund hereby adopt the
Funds Transfer Operating Guidelines attached hereto as Exhibit
B. State Street and Fund may from time to time adopt such
additional procedures as they agree upon, and State Street may
conclusively assume that no procedure approved or directed by
Fund, Fund's or Portfolio's accountants or other advisors
conflicts with or violates any requirements of the prospectus,
declaration of trust, any applicable law, rule or regulation,
or any order, decree or agreement by which Fund may be bound.
Fund will be responsible for notifying State Street of any
changes in statutes, regulations, rules, requirements or
policies which may impact State Street's responsibilities or
procedures under this Agreement.
T. Advances. Fund will pay on demand any advance of cash or
securities made by State Street or any Subcustodian, in its
sole discretion, for any purpose (including but not
12
13
limited to securities settlements, purchase or sale of foreign
exchange or foreign exchange contracts and assumed settlement)
for the benefit of any Portfolio. Any such cash advance will
be subject to an overdraft charge at the rate set forth in the
then-current fee schedule from the date advanced until the
date repaid. As security for each such advance, Fund hereby
grants State Street and such Subcustodian a lien on and
security interest in all Assets at any time held for the
account of the applicable Portfolio, including without
limitation all Assets acquired with the amount advanced.
Should Fund fail to promptly repay the advance, State Street
and such Subcustodian may utilize available cash and dispose
of such Portfolio's Assets pursuant to applicable law to the
extent necessary to obtain reimbursement of the amount
advanced and any related overdraft charges.
U. Exercise of Rights; Tender Offers. Upon receipt of
Instructions, State Street will: (1) deliver warrants, puts,
calls, rights or similar securities to the issuer or trustee
thereof, or to the agent of such issuer or trustee, for the
purpose of exercise or sale, provided that the new Assets, if
any, are to be delivered to State Street; and (2) deposit
securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be paid or
delivered to State Street or the tendered securities are to be
returned to State Street.
V. Fund Shares.
1. Fund will deliver to State Street Instructions with
respect to the declaration and payment of any
dividend or other distribution on the shares of
capital stock of a Portfolio ("Fund Shares") by a
Portfolio. On the date specified in such Instruction,
State Street will pay out of the monies held for the
account of the Portfolio, insofar as it is available
for such purposes, and credit to the account of the
Dividend Disbursing Agent for the Portfolio, the
amount specified in such Instructions.
2. Whenever Fund Shares are repurchased or redeemed by a
Portfolio, Portfolio or its agent will give State
Street Instructions regarding the aggregate dollar
amount to be paid for such shares. Upon receipt of
such Instruction, State Street will charge such
aggregate dollar amount to the account of the
Portfolio and either deposit the same in the account
maintained for the purpose of paying for the
repurchase or redemption of Fund Shares or deliver
the same in accordance with such Instruction. State
Street has no duty or responsibility to determine
that Fund Shares have been removed from the proper
shareholder accounts or that the proper number of
Fund Shares have been canceled and removed from the
shareholder records.
3. Whenever Fund Shares are purchased from Fund, Fund
will deposit or cause to be deposited with State
Street the amount received for such shares. State
Street has no duty or responsibility to determine
that Fund Shares purchased from Fund have been added
to the proper shareholder account or that the proper
number of such shares have been added to the
shareholder records.
13
14
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written
(including telecopied, telexed, or electronically transmitted)
or oral instructions which State Street reasonably believes
were given by a designated representative of Fund. Fund will
deliver to State Street, prior to delivery of any Assets to
State Street and thereafter from time to time as changes
therein are necessary, written Instructions naming one or more
designated representatives to give Instructions in the name
and on behalf of Fund, which Instructions may be received and
accepted by State Street as conclusive evidence of the
authority of any designated representative to act for Fund and
may be considered to be in full force and effect until receipt
by State Street of notice to the contrary. Unless such written
Instructions delegating authority to any person to give
Instructions specifically limit such authority to specific
matters or require that the approval of anyone else will first
have been obtained, State Street will be under no obligation
to inquire into the right of such person, acting alone, to
give any Instructions whatsoever. If Fund fails to provide
State Street any such Instructions naming designated
representatives, any Instructions received by State Street
from a person reasonably believed to be an appropriate
representative of Fund will constitute valid and proper
Instructions hereunder. The term "designated representative"
may include Fund's or a Portfolio's employees and agents,
including investment managers and their employees.
B. No later than the next business day immediately following each
oral Instruction, Fund will send State Street written
confirmation of such oral Instruction. At State Street's sole
discretion, State Street may record on tape, or otherwise, any
oral Instruction whether given in person or via telephone,
each such recording identifying the date and the time of the
beginning and ending of such oral Instruction.
C. Fund will provide, upon State Street's request a certificate
signed by an officer or designated representative of Fund, as
conclusive proof of any fact or matter required to be
ascertained from Fund hereunder. Fund will also provide State
Street Instructions with respect to any matter concerning this
Agreement requested by State Street. If State Street
reasonably believes that it could not prudently act according
to the Instructions, or the instruction or advice of Fund's or
a Portfolio's accountants or counsel, it may in its
discretion, with notice to Fund, not act according to such
Instructions.
5. LIMITATION OF LIABILITY OF STATE STREET. State Street is not
responsible or liable for, and Fund will indemnify and hold State
Street harmless from and against, any and all costs, expenses, losses,
damages, charges, counsel fees (including, without limitation,
disbursements and the allocable cost of in-house counsel), payments and
liabilities which may be asserted against or incurred by State Street
or for which State Street may be held to be liable, arising out of or
attributable to:
A. State Street's action or failure to act pursuant hereto;
provided that State Street has acted in good faith and with
reasonable care; and provided further, that, in no event is
State Street liable for consequential, special, or punitive
damages;
14
15
B. State Street's payment of money as requested by Fund, or the
taking of any action which might make it or its nominee liable
for payment of monies or in any other way; provided, however,
that nothing herein obligates State Street to take any such
action or expend its own monies except in its sole discretion;
C. State Street's action or failure to act hereunder upon any
Instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to
have been properly executed, including any Instruction,
communications, data or other information received by State
Street by means of the Systems, as hereinafter defined, or any
electronic system of communication;
D. State Street's action or failure to act in good faith reliance
on the advice or opinion of counsel for Fund or of its own
counsel with respect to questions or matters of law, which
advice or opinion may be obtained by State Street at the
expense of Fund, or on the Instruction, advice or statements
of any officer or employee of Fund, or Fund's accountants or
other authorized individuals, and other persons believed by it
in good faith to be expert in matters upon which they are
consulted;
E. The purchase or sale of any securities or foreign currency
positions. Without limiting the generality of the foregoing,
State Street is under no duty or obligation to inquire into:
1. The validity of the issue of any securities purchased
by or for any Portfolio, or the legality of the
purchase thereof or of foreign currency positions, or
evidence of ownership required by Fund to be received
by State Street, or the propriety of the decision to
purchase or the amount paid therefor;
2. The legality of the sale of any securities or foreign
currency positions by or for any Portfolio, or the
propriety of the amount for which the same are sold;
or
3. The legality of the issue or sale of any Fund Shares,
or the sufficiency of the amount to be received
therefor, the legality of the repurchase or
redemption of any Fund Shares, or the propriety of
the amount to be paid therefor, or the legality of
the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment
of any stock dividend.
F. Any error, omission, inaccuracy or other deficiency in any
Portfolio's accounts and records or other information provided
to State Street by or on behalf of a Portfolio, or the failure
of Fund to provide, or provide in a timely manner, any
accounts, records, or information needed by State Street to
perform its duties hereunder;
G. Fund's refusal or failure to comply with the terms hereof
(including without limitation Fund's failure to pay or
reimburse State Street under Section 5 hereof), Fund's
negligence or willful misconduct, or the failure of any
representation or warranty of Fund hereunder to be and remain
true and correct in all respects at all times;
15
16
H. The use or misuse, whether authorized or unauthorized, of the
Systems or any electronic system of communication used
hereunder, by Fund or by any person who acquires access to the
Systems or such other systems through the terminal device,
passwords, access instructions or other means of access to
such Systems or such other system which are utilized by,
assigned to or otherwise made available to Fund, except to the
extent attributable to any negligence or willful misconduct by
State Street;
I. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the
payment of money to be received by State Street on behalf of a
Portfolio until actually received; provided, however, that
State Street will advise Fund promptly if it fails to receive
any such money in the ordinary course of business and will
cooperate with Fund toward the end that such money is
received;
J. Except as provided in Section 3.P hereof, loss occasioned by
the acts, omissions, defaults or insolvency of any broker,
bank, trust company, securities system or any other person
with whom State Street may deal; and
K. The failure or delay in performance of its obligations
hereunder, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly,
by circumstances beyond the affected entity's reasonable
control, including, without limitation: any interruption, loss
or malfunction of any utility, transportation, computer
(hardware or software) or communication service; inability to
obtain labor, material, equipment or transportation, or a
delay in mails; governmental or exchange action, statute,
ordinance, rulings, regulations or direction; war, strike,
riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornadoes,
acts of God or public enemy, revolutions, or insurrection.
6. COMPENSATION. In consideration for its services hereunder, Fund will
pay to State Street the compensation set forth in a separate fee
schedule, incorporated herein by reference, to be agreed to by Fund and
State Street from time to time, and, upon demand, reimbursement for
State Street's cash disbursements and reasonable out-of-pocket costs
and expenses, including attorney's fees and disbursements, incurred by
State Street in connection with the performance of services hereunder.
State Street may charge such compensation against monies held by it for
the account of the Portfolios. State Street will also be entitled to
charge against any monies held by it for the account of the Portfolios
the amount of any loss, damage, liability, advance, overdraft or
expense for which it is entitled to reimbursement from Fund, including
but not limited to fees and expenses due to State Street for other
services provided to Fund by State Street. State Street will be
entitled to reimbursement by Fund for the losses, damages, liabilities,
advances, overdrafts and expenses of Subcustodians only to the extent
that (a) State Street would have been entitled to reimbursement
hereunder if it had incurred the same itself directly, and (b) State
Street is obligated to reimburse the Subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement is for a
period of one (1) year. Thereafter, either Fund or State Street may
terminate this Agreement by notice in
16
17
writing, delivered or mailed, postage prepaid, to the other party and
received not less than ninety (90) days prior to the date upon which
such termination will take effect. Upon termination hereof:
A. Fund will pay State Street its fees and compensation due
hereunder and its reimbursable disbursements, costs and
expenses paid or incurred to such date;
B. Fund will designate a successor custodian by Instruction to
State Street by the termination date. In the event no such
Instruction has been delivered to State Street on or before
the date when such termination becomes effective, then State
Street may, at its option, (i) choose as successor custodian a
bank or trust company meeting the qualifications for custodian
set forth in the 1940 Act and having not less than Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report, or (ii) apply
to a court of competent jurisdiction for the appointment of a
successor or other proper relief, or take any other lawful
action under the circumstances; provided, however, that Fund
will reimburse State Street for its costs and expenses,
including reasonable attorney's fees, incurred in connection
therewith; and
C. State Street will, upon payment of all sums due to State
Street from Fund hereunder or otherwise, deliver all Assets,
duly endorsed and in form for transfer, to the successor
custodian, or as specified by the court, at State Street's
office. State Street will co-operate in effecting changes in
book-entries at all Depositories. Upon delivery to a successor
or as specified by the court, State Street will have no
further obligations or liabilities hereunder. Thereafter such
successor will be the successor hereunder and will be entitled
to reasonable compensation for its services.
In the event that Assets remain in the possession of State Street after
the date of termination hereof for any reason other than State Street's
failure to deliver the same, State Street is entitled to compensation
as provided in the then-current fee schedule for its services during
such period, and the provisions hereof relating to the duties and
obligations of State Street will remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed
to Fund at the address set forth above, or at such other address as
Fund may have designated to State Street in writing, will be deemed to
have been properly given to Fund hereunder. Notices, requests,
Instructions and other writings addressed to State Street at State
Street Kansas City, 801 Pennsylvania, Xxxxxx Xxxx, Xxxxxxxx 00000,
Attention: Custody Department, or to such other address as it may have
designated to Fund in writing, will be deemed to have been properly
given to State Street hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
A. If State Street provides Fund direct access to the
computerized investment portfolio custody systems used by
State Street ("Systems") or if State Street and Fund agree to
utilize any electronic system of communication, Fund agrees to
implement and enforce appropriate security policies and
procedures to prevent unauthorized or improper access to or
use of the Systems or such other system.
17
18
B. Fund will preserve the confidentiality of the Systems and the
tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other
materials relevant to, the Systems and the business of State
Street or its affiliates ("Confidential Information"). Fund
agrees that it will not voluntarily disclose any such
Confidential Information to any other person other than its
own employees who reasonably have a need to know such
information pursuant hereto. Fund will return all such
Confidential Information to State Street upon termination or
expiration hereof.
C. Fund has been informed that the Systems are owned by or
licensed for use by State Street and its affiliates from one
or more third parties ("Licensors"), and Fund acknowledges
that State Street and Licensors have proprietary rights in and
to the Systems and all other State Street or Licensor
programs, code, techniques, know-how, data bases, supporting
documentation, data formats, and procedures, including without
limitation any changes or modifications made at the request or
expense or both of Fund (collectively, the "Protected
Information"). Fund acknowledges that the Protected
Information constitutes confidential material and trade
secrets of State Street and Licensors. Fund will preserve the
confidentiality of the Protected Information, and Fund hereby
acknowledges that any unauthorized use, misuse, disclosure or
taking of Protected Information, residing or existing internal
or external to a computer, computer system, or computer
network, or the knowing and unauthorized accessing or causing
to be accessed of any computer, computer system, or computer
network, may be subject to civil liabilities and criminal
penalties under applicable law. Fund will so inform employees
and agents who have access to the Protected Information or to
any computer equipment capable of accessing the same.
Licensors are intended to be and are third party beneficiaries
of Fund's obligations and undertakings contained in this
Section.
D. Fund hereby represents and warrants to State Street that it
has determined to its satisfaction that the Systems are
appropriate and suitable for its use. THE SYSTEMS ARE PROVIDED
ON AN AS IS, AS AVAILABLE BASIS. STATE STREET EXPRESSLY
DISCLAIMS ALL WARRANTIES INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, EXCEPT THOSE WARRANTIES STATED EXPRESSLY
HEREIN.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio,
the following provisions apply:
A. Each Portfolio will be regarded for all purposes hereunder as
a separate party apart from each other Portfolio. Unless the
context otherwise requires, with respect to every transaction
covered hereby, every reference herein to Fund is deemed to
relate solely to the particular Portfolio to which such
transaction relates. Under no circumstances will the rights,
obligations or remedies with respect to a particular Portfolio
constitute a right, obligation or remedy applicable to any
other Portfolio. The use of this single document to
memorialize the separate agreement as to each
18
19
Portfolio is understood to be for clerical convenience only
and will not constitute any basis for joining the Portfolios
for any reason.
B. Fund may appoint State Street as its custodian for additional
Portfolios from time to time by written notice, provided that
State Street consents to such addition. Rates or charges for
each additional Portfolio will be as agreed upon by State
Street and Fund in writing.
11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights
and liabilities of the parties hereto will be governed by, the
laws of the commonwealth of Massachusetts, without reference
to the choice of laws principles thereof.
B. All terms and provisions hereof will be binding upon, inure to
the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9 hereof are
intended to and will continue after and survive the
expiration, termination or cancellation hereof.
D. No provisions hereof may be amended or modified in any manner
except by a written agreement properly authorized and executed
by each party hereto.
E. The failure of either party to insist upon the performance of
any terms or conditions hereof or to enforce any rights
resulting from any breach of any of the terms or conditions
hereof, including the payment of damages, will not be
construed as a continuing or permanent waiver of any such
terms, conditions, rights or privileges, but the same will
continue and remain in full force and effect as if no such
forbearance or waiver had occurred. No waiver, release or
discharge of any party's rights hereunder will be effective
unless contained in a written instrument signed by the party
sought to be charged.
F. The captions herein are included for convenience of reference
only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts,
each of which is deemed an original but all of which together
constitute one and the same instrument.
H. If any provision hereof is determined to be invalid, illegal,
in conflict with any law or otherwise unenforceable, the
remaining provisions hereof will be considered severable and
will not be affected thereby, and every remaining provision
hereof will remain in full force and effect and will remain
enforceable to the fullest extent permitted by applicable law.
19
20
I. The benefits of this Agreement may not be assigned by either
party nor may either party delegate all or a portion of its
duties hereunder without the prior written consent of the
other party. Notwithstanding the foregoing, Fund agrees that
State Street may delegate all or a portion of its duties to an
affiliate of State Street, provided that such delegation will
not reduce the obligations of State Street under this
Agreement.
J. Neither the execution nor performance hereof will be deemed to
create a partnership or joint venture by and between State
Street and Fund or any Portfolio.
K. Except as specifically provided herein, this Agreement does
not in any way affect any other agreements entered into among
the parties hereto and any actions taken or omitted by either
party hereunder will not affect any rights or obligations of
the other party hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
STATE STREET BANK AND TRUST PILGRIM PRINCIPAL PROTECTION FUND
COMPANY
By:________________________ By:______________________________
On behalf of the Fund
Title:_____________________ Title:___________________________
20
21
SCHEDULE A
PILGRIM PRINCIPAL PROTECTION FUND
21
22
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
FOREIGN--Income will be credited contractually on pay day in the markets noted
with Contractual Income Policy. The markets noted with Actual income policy will
be credited income when it is received.
MARKET INCOME POLICY MARKET INCOME POLICY MARKET INCOME POLICY
------ ------------- ------ ------------- ------ -------------
Argentina Actual Hong Kong Contractual Poland Actual
Australia Contractual Hungary Actual Portugal Contractual
Austria Contractual India Actual Russia Actual
Bahrain Actual Indonesia Actual Singapore Contractual
Bangladesh Actual Ireland Actual Slovak Republic Actual
Belgium Contractual Israel Actual South Africa Actual
Bermuda Actual Italy Contractual South Korea Actual
* Bolivia Actual Ivory Coast Actual Spain Contractual
Botswana Actual * Jamaica Actual Sri Lanka Actual
Brazil Actual Japan Contractual Swaziland Actual
Canada Contractual Jordan Actual Sweden Contractual
Chile Actual Kenya Actual Switzerland Contractual
China Actual Lebanon Actual Taiwan Actual
Colombia Actual Luxembourg Actual Thailand Actual
Cyprus Actual Malaysia Actual * Trinidad & Actual
Tobago
Czech Republic Actual Mauritius Actual * Tunisia Actual
Denmark Contractual Mexico Actual Turkey Actual
Ecuador Actual Morocco Actual United Kingdom Contractual
Egypt Actual Namibia Actual United States See Attached
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
Euro CDs Actual New Zealand Contractual Venezuela Actual
Finland Contractual Norway Contractual Zambia Actual
France Contractual Oman Actual Zimbabwe Actual
Germany Contractual Pakistan Actual
Ghana Actual Peru Actual
Greece Actual Philippines Actual
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed
with Income Policy of Contractual.
UNITED STATES--
22
23
INCOME TYPE DTC FED PTC PHYSICAL
----------- --- --- --- --------
Dividends Contractual N/A N/A Actual
Fixed Rate Interest Contractual Contractual N/A Actual
Variable Rate Interest Contractual Contractual N/A Actual
GNMA I N/A N/A Contractual PD +1 N/A
GNMA II N/A N/A Contractual PD *** N/A
Mortgages Actual Contractual Contractual Actual
Maturities Actual Contractual N/A Actual
Exceptions to the above Contractual Income Policy include securities
that are:
* Involved in a trade whose settlement either failed, or is
pending over the record date, (excluding the United States);
* On loan under a self directed securities lending program other
than State Street's own vendor lending program;
* Known to be in a condition of default, or suspected to present
a risk of default or payment delay;
* In the asset categories, without limitation, of Private
Placements, Derivatives, Options, Futures, CMOs, and Zero
Coupon Bonds.
* Securities whose amount of income and redemption cannot be
calculated in advance of payable date, or determined in
advance of actual collection, examples include ADRs;
* Payments received as the result of a corporate action, not
limited to, bond calls, mandatory or optional puts, and tender
offers.
*** For GNMA II securities, if the 19th day of the month is a
business day, Payable/Distribution Date is the next business
day. If the 19th is not a business day, but the 20th is a
business day, Payable/Distribution date is the first business
day after the 20th. If both the 19th and 20th are not business
days, Payable/Distribution will be the next business day
thereafter.
EXHIBIT B--FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company ("SSB") is
authorized to promptly debit Client's account(s) upon the receipt of a payment
order in compliance with any of the Security Procedures chosen by the Client,
from those offered on the attached selection form (and any updated selection
forms hereafter executed by the Client), for funds transfers and in the amount
of money that SSB has been instructed to transfer. SSB is hereby instructed to
accept funds transfer instructions only via the delivery methods and Security
Procedures indicated on the attached selection form (and any updated executed by
the Client). The Client agrees that the Security Procedures are reasonable and
adequate for its wire transfer transactions and agrees to be bound by any
payment orders, amendments and cancellations, whether or not authorized, issued
in its name and accepted by SSB after being confirmed by any of the selected
Security Procedures. The Client also agrees to be bound by any other valid and
authorized payment order accepted by SSB. SSB shall execute payment orders in
compliance with the selected Security Procedures and with the
Client's/Investment Manager's instructions on the execution date provided that
such payment order is received by the customary deadline for processing such a
request, unless the payment order specifies a later time. SSB will use
reasonable efforts to execute on the execution date payment
23
24
orders received after the customary deadline, but if it is unable to execute any
such payment order on the execution date, such payment order will be deemed to
have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB will also rely on any financial
institution identification numbers included in any payment order, regardless of
any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's sole judgment, to
exceed any applicable volume, aggregate dollar, network, time, credit or similar
limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB reasonable efforts.
6. ERRORS: SSB shall assume no responsibility for failure to detect any
erroneous payment order provided that SSB complies with the payment order
instructions as received and SSB complies with the selected Security Procedures.
The Security Procedures are established for the purpose of authenticating
payment orders only and not for the detection of errors in payment orders.
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
the Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the Mid-America Payment Exchange or other similar body, SSB or its agent
will act as an Originating Depository Financial Institution and/or Receiving
Depository Financial Institution, as the case may be, with respect to such
entries. Credits given with respect to an ACH credit entry are provisional until
final settlement for such entry is received from the Federal Reserve Bank. If
such final settlement is not received, the Client agrees to promptly refund the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute
payment orders, and any payment order carried in whole or in part through
Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
24
25
SECURITY PROCEDURES SELECTION FORM
Please select at least two of the funds transfer security procedures indicated
below.
[] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is
a cooperative society owned and operated by member financial
institutions that provides telecommunication services for its
membership. Participation is limited to securities brokers and dealers,
clearing and depository institutions, recognized exchanges for
securities, and investment management institutions. SWIFT provides a
number of security features through encryption and authentication to
protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent
changes to messages.
Selection of this security procedure would be most appropriate for
existing SWIFT members.
[] REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and
SSB and/or its agent. Security procedures include encryption and/or the
use of a test key by those individuals authorized as Automated Batch
Verifiers or a callback procedure to those individuals.
Clients selecting this option should have an existing facility for
completing CPU-CPU transmissions. This delivery mechanism is typically
used for high-volume business such as shareholder redemptions and
dividend payments.
[] AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for
the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each
transmission or tape must be authenticated by the Client. The
transmission is sent from the Client's or its agent's system to SSB's
or its agent's system with encryption.
[] REPETITIVE WIRES
For situations where funds are transferred periodically from an
existing authorized account to the same payee (destination bank and
account number) and only the date and currency amount are variable, a
repetitive wire may be implemented. Repetitive wires will be subject to
a $10 million limit. If the payment order exceeds the $10 million
limit, the instruction will be confirmed by Telephone Confirmation
(Call Back) or Test Key prior to execution. Repetitive wire
instructions must be reconfirmed annually. Clients may establish
Repetitive Wires by following the agreed upon security procedures as
described by Telephone Confirmation (Call Back) or Test Key.
This alternative is recommended whenever funds are frequently
transferred between the same two accounts. IF THIS OPTION IS SELECTED,
CHOOSE EITHER TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A
SECONDARY PROCEDURE WHEN OVER $10 MILLION.
[] STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the
dollar amount are variable. Clients may establish Standby Instructions
by following the agreed upon security procedures as described by
Telephone Confirmation (Call Back) or Test Key.
This option is used for transactions that include but are not limited
to Foreign Exchange Contracts, Time Deposits and Tri-Party Repurchase
Agreements. IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE
CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER
$10 MILLION.
[] TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the
instruction contains the signature of an authorized person and prior to
execution of the payment order, will contact someone other than the
originator at the Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not
have the capability to use other security procedures. PLEASE COMPLETE
THE TELEPHONE CONFIRMATION INSTRUCTIONS ATTACHED AS A SCHEDULE HERETO.
[] TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide
test keys if this option is chosen. SSB will verify that the
instruction contains the signature of an authorized person and prior to
execution of the payment order, will authenticate the test key provided
with the corresponding test key at SSB.
Selection of this alternative is appropriate for Clients who do not
have the capability to use other security procedures.
The individual signing below must be authorized to sign contract on behalf of
the client. The execution of payment orders under the selected Security
Procedures is governed by the Funds Transfer Operating Guidelines, which are
incorporated by reference.
CLIENT
By:_________________________________________________
Authorized Signature
____________________________________________________
Type or Print Name
____________________________________________________
Title
____________________________________________________
Date
25
26
SCHEDULE TO FUNDS TRANSFER OPERATING GUIDELINES
AND SECURITY PROCEDURES SELECTION FORM
CLIENT/INVESTMENT MANAGER:______________________________________________________
Company Name
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
_________________________ _________________________
Name Name
_________________________ _________________________
Address Address
_________________________ _________________________
City/State/Zip Code City/State/Zip Code
_________________________ _________________________
Telephone Number Telephone Number
_________________________ _________________________
Facsimile Number Facsimile Number
_________________________
SWIFT Number
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
________________________ ________________________ ________________________
26
27
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain The British Bank of the Middle East (as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada State Street Trust Company Canada --
Chile Citibank, N.A. --
People's The Hongkong and Shanghai Banking Corporation --
Republic of Limited, Shanghai and Shenzhen branches
China
Colombia Cititrust Colombia S.A.Sociedad Fiduciaria --
Costa Rica Banco BCT S.A. --
Croatia Privredana Banka Zagreb d.d --
Cyprus Cypress Popular Bank Ltd. --
Czech Ceskoslovenska Obchodni Banka, A.S. --
Republic
Denmark Den Danske Bank --
27
28
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Xxxxxx Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
India Deutsche Bank AG;The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en Cote d'Ivoire --
Jamaica Scotiabank Jamaica Trust and Merchant Bank, Ltd. --
Japan The Daiwa Bank, Limited; The Fuji Bank Limited Japan Securities Depository
Jordan British Bank of the Middle East (as delegate of The --
Hongkong and Shanghai Banking Corporation Limited)
28
29
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Kenya Barclays Bank of Kenya Limited --
Republic of The Hongkong and Shanghai Banking --
Korea Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking --
Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse --
Oman The British Bank of the Middle East(as delegate of The --
Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
29
30
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, AO, Moscow --
(as delegate of Credit Suisse First Boston, Zurich)
Singapore The Development Bank of Singapore Ltd. --
Slovak Ceskoslovenska Obchodna Banka A.S. --
Republic
Slovenia Banka Austria d.d. --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited--
Swaziland Barclays Bank of Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AS --
Taiwan - Central Trust of China --
R.O.C.
Thailand Standard Chartered Bank --
Trinidad Republic Bank Ltd. --
& Tobago
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A.; Ottoman Bank --
Ukraine ING Bank, Ukraine --
United State Street Bank and Trust Company, --
Kingdom London Branch
Uruguay Citibank, N.A. --
30
31
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
31
32
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES (INCLUDES ENTITIES FOR WHICH USE IS
MANDATORY AS A MATTER OF LAW OR EFFECTIVELY MANDATORY AS A
MATTER OF MARKET PRACTICE)
Argentina -Caja de Valores S.A.
Australia -Austraclear Limited;
-Reserve Bank Information and Transfer System
Austria -Oesterreichische Kontrollbank AG (Wertpapiersammelbank
Division)
Belgium -Caisse Interprofessionnelle de Depot et de Virement de
Titres S.A.;
-Banque Nationale de Belgique
Brazil -Companhia Brasileira de Liquidacao e
-Custodia (CBLC)
-Bolsa de Valores de Rio de Janeiro
- All SSB clients presently use CBLC
-Central de Custodia e de Liquidacao Financeira de Titulos
Bulgaria -Central Depository AD
-Bulgarian National Bank
Canada -The Canadian Depository for Securities Limited
People's Republic -Shanghai Securities Central Clearing and Registration
Corporation;
of China -Shenzhen Securities Central Clearing Co., Ltd.
Costa Rica -Central de Valores S.A. (CEVAL)
Croatia Ministry of Finance; - National Bank of Croatia
Czech Republic -Stredisko cennych papiru;
-Czech National Bank
Denmark -Vaerdipapircentralen (The Danish Securities Center)
Egypt -Misr Company for Clearing, Settlement, and Central
Depository
Estonia -Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities Depository
France -Societe Interprofessionnelle pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany -The Deutscher Borse Clearing AG
32
33
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES (INCLUDES ENTITIES FOR WHICH USE IS
MANDATORY AS A MATTER OF LAW OR EFFECTIVELY MANDATORY AS A
MATTER OF MARKET PRACTICE)
Greece -The Central Securities Depository (Apothetirion Titlon AE)
Hong Kong -The Central Clearing and Settlement System;
-Central Money Markets Unit
Hungary -The Central Depository and Clearing House (Budapest) Ltd.
(KELER) [Mandatory for Gov't Bonds only; SSB does not use
for other securities]
India -The National Securities Depository Limited
Indonesia -Bank Indonesia
Ireland -The Central Bank of Ireland, Securities Settlement Office
Israel -The Tel Aviv Stock Exchange Clearing House Ltd.;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Jamaica -The Jamaican Central Securities Depository
Japan -Bank of Japan Net System
Kenya -Central Bank of Kenya
Republic of Korea -Korea Securities Depository Corporation
Latvia -The Latvian Central Depository
Lebanon -The Custodian and Clearing Center of Financial Instruments
for Lebanon and the Middle East (MIDCLEAR) X.X.X.;
- The Central Bank of Lebanon
Lithuania -The Central Securities Depository of Lithuania
Malaysia -The Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities Trading and
Safekeeping Systems
Mauritius -The Central Depository & Settlement Co. Ltd.
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el Deposito de
Valores);
33
34
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES (INCLUDES ENTITIES FOR WHICH USE IS
MANDATORY AS A MATTER OF LAW OR EFFECTIVELY MANDATORY AS A
MATTER OF MARKET PRACTICE)
Morocco -Maroclear
The Netherlands -Nederlands Centraal Instituut voor Giraal Effectenverkeer
B.V. (NECIGEF)
-De Nederlandsche Bank N.V.
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen (the Norwegian Registry of Securities)
Oman -Muscat Securities Market
Pakistan -Central Depository Company of Pakistan Limited
Peru -Caja de Valores y Liquidaciones S.A. (CAVALI)
Philippines -The Philippines Central Depository Inc.
-The Registry of Scripless Securities (XXXX) of the Bureau
of the Treasury
Poland -The National Depository of Securities (Krajowy Depozyt
Papierow Wartos'ciowych);
-Central Treasury Bills Registrar
Portugal -Central de Valores Mobiliarios (Central)
Romania -National Securities Clearing, Settlement and Depository
Co.;
-Bucharest Stock Exchange Registry Division;
Singapore -The Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko Cennych Papierov;
-National Bank of Slovakia
Slovenia -Klirinsko Depotna Xxxxxx x.x.
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y Liquidacion de Valores, S.A.;
-Banco de Espana; Central de Anotaciones en Cuenta
Sri Lanka -Central Depository System (Pvt) Limited
34
35
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES (INCLUDES ENTITIES FOR WHICH USE IS
MANDATORY AS A MATTER OF LAW OR EFFECTIVELY MANDATORY AS A
MATTER OF MARKET PRACTICE)
Sweden -Vardepapperscentralen AB (the Swedish Central Securities
Depository)
Switzerland -Schweizerische Effekten - Giro AG;
Taiwan - R.O.C. -The Taiwan Securities Central Depository Company, Ltd.
Thailand -Thailand Securities Depository Company Limited
Tunisia - Societe Tunisienne Interprofessionelle de Compensation et de Depot de
Valeurs Mobilieres
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S. (TAKASBANK)
-Central Bank of Turkey
Ukraine -The National Bank of Ukraine
United Kingdom -The Bank of England, The Central Gilts Office; The Central
Moneymarkets Office
Uruguay -Central Bank of Uruguay
Venezuela -Central Bank of Venezuela
Zambia -Lusaka Central Depository Limited
-Bank of Zambia
35
