Exhibit (g)(1)(c)
October 28, 2004
RE: FOREIGN CUSTODY MANAGER
Ladies and Gentlemen:
In connection with the safekeeping of securities and cash and various
other custody activities provided by Xxxxx Fargo Bank, N.A. (the "Custodian") to
the ADVANTUS SERIES FUND, INC. - REAL ESTATE (the "Fund"), a series of Advantus
Series Fund, Inc. ("the Corporation"), under the Custody Agreement dated as of
NOVEMBER 1, 1999 (the "Agreement" and attached hereto as Exhibit A), the
Corporation desires to delegate to the Custodian certain additional duties as a
"Foreign Custody Manager" for the Fund, as permitted by Rules 17f-5 and 17f-7 of
the Investment Company Act of 1940, ("Rule 17f-5" and "Rule 17f-7"). Such
additional duties shall be performed on the terms and conditions set forth
herein.
Capitalized terms not otherwise defined herein shall have the meaning attributed
to them in the attached Exhibit A or Rules 17f-5 and 17f-7, as the case may be.
As authorized by the Board, the Corporation hereby delegates to the
Custodian, with respect to Fund assets located in each Specified Country, the
duties of a "Foreign Custody Manager" as defined in Rule 17f-5 and as specified
below. The Custodian accepts the Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the Responsibilities
as a Foreign Custody Manager to exercise reasonable care, prudence and diligence
such as a person having responsibility for the safekeeping of the Fund's assets
would exercise.
SECTION I. REPORTS.
The Custodian shall provide to the Board at such times as the Board
deems reasonable and appropriate based on the circumstances of the Fund's
foreign custody arrangements, written reports notifying the Board of the
placement of assets of the Fund with a particular Eligible Foreign Custodian
within a Specified Country and of any material change in the arrangements
(including, in the case of Qualified Foreign Banks, any material change in any
contract governing such arrangements and in the case of Securities Depositories,
any material change in the established practices or procedures of such
Securities Depositories) with respect to assets of the Fund with any such
Eligible Foreign Custodian.
SECTION II. DUTIES OF THE CUSTODIAN.
1. Eligible Foreign Custodians.
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Subject to the provisions of this Agreement, the Custodian shall select an
Eligible Foreign Custodian with respect to each Specified Country. In connection
therewith, the Custodian shall:
(a) determine that assets of the Fund held by such Eligible Foreign
Custodian will be subject to reasonable care, based on the standards applicable
to custodians in the relevant market in which such Eligible Foreign Custodian
operates, after considering all factors relevant to the safekeeping of such
assets, including, without limitation, those contained in paragraph (c)(1) of
Rule 17f-5;
(b) determine that the Fund's foreign custody arrangements with each
Qualified Foreign Bank are governed by a written contract with the Custodian
(or, in the case of a Securities Depository, by such a contract, by the rules or
established practices or procedures of the Securities Depository, or by any
combination of the foregoing) which will provide reasonable care for the Fund's
assets based on the standards specified in paragraph (c)(2) of Rule 17f-5;
(c) determine that each contract with a Qualified Foreign Bank shall
include the provisions specified in paragraph (c)(2)(i)(A) through (F) of Rule
17f-5 or, alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F)
provisions, such other provisions as the Custodian determines will provide, in
their entirety, the same or a greater level of care and protection for the
assets of the Fund as such specified provisions;
(d) monitor pursuant to the Monitoring System the appropriateness of
maintaining the assets of the Fund with a particular Eligible Foreign Custodian
pursuant to paragraph (c)(3) of Rule 17f-5 and in the case of a Qualified
Foreign Bank, any material change in the contract governing such arrangement and
in the case of a Securities Depository, any material change in the established
practices or procedures of such Securities Depository; and
(e) advise the Fund whenever an arrangement (including, in the case of a
Qualified Foreign Bank, any material change in the contract governing such
arrangement and in the case of a Securities Depository, any material change in
the established practices or procedures of such Securities Depository) described
in preceding clause (d) no longer meets the requirements of Rule 17f-5.
(f) if the Custodian determines that a custody arrangement with an Eligible
Securities Depository no longer meets the requirements of Rule 17f-7(a), the
Fund's assets must be withdrawn from the depository as soon as reasonably
practicable.
2. Eligible Securities Depositories.
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(a) With respect to each Eligible Securities Depository (as defined in Rule
17f-7) identified by the Custodian to the Board from time to time, Custodian
shall exercise reasonable care, prudence, and diligence such as a person having
responsibilities for
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the safekeeping of the Fund's assets would exercise (i) to provide the Fund or
its investment adviser with an analysis of the custody risks associated with
maintaining assets with that Eligible Securities Depository, and (ii) to monitor
such custody risks on a continuing basis and promptly notify the Fund of any
material change in such risks.
(b) All such analysis and monitoring by the Custodian shall be made on the
basis of, and limited by, information gathered from Subcustodians, from trade
associations of which Custodian is a member from time to time, or through
publicly available information otherwise obtained by Custodian, and shall not
include any evaluation of Country Risks. Information supplied by Custodian with
respect to the status of an institution as a Eligible Securities Depository or
utilized by Custodian to conclude that an institution is a Eligible Securities
Depository shall be limited to information supplied by such institution without
any independent verification.
(c) Custodian will endeavor to include in its analysis and monitoring,
where appropriate, an Eligible Securities Depository's expertise and market
reputation, the quality of its services, its financial strength, any insurance
or indemnification arrangements, the extent and quality of regulation and
independent examination of the depository, its standing in published ratings,
its internal controls and other procedures for safeguarding investments, and any
related legal protections.
(d) In the event that the Fund reasonably believes that there is a
discrepancy between Custodian's performance of its obligations in (a) above and
the requirements of paragraphs (a)(1)(i)(A) or (B) of Rule 17f-7, respectively,
and provides a detailed notification to Custodian, Custodian shall reasonably
cooperate with the Fund and endeavor to resolve any such discrepancy.
(e) As used herein, the term "Country Risks" shall mean with respect to any
Eligible Securities Depository: (i) the financial infrastructure of the country
in which it is organized, but not of any Eligible Securities Depository to the
extent covered by an analysis described in clause (a) of this Section, (ii) such
country's prevailing custody and settlement practices, (iii) nationalization,
expropriation or other governmental actions, (iv) such country's regulation of
the banking or securities industry, (v) currency controls, restrictions,
devaluations or fluctuations, and (vi) market conditions which affect the
orderly execution of securities transactions or affect the value of securities.
SECTION III LIMITATIONS ON CUSTODIAN'S DUTY.
(1) For purposes of Section II above with respect to both Eligible Foreign
Custodians and Eligible Securities Depositories, it is understood that such
determination shall be made on the basis of, and limited by, information
gathered through the Custodian's subcustodian network through the Bank of New
York, or through publicly available information otherwise obtained with respect
to each such Securities Depository.
(2) For purposes of clause (d) of subsection 1 of Section II above, the
Custodian's determination of appropriateness shall not include, nor be deemed to
include, any evaluation of Country Risks associated with investment in a
particular country. For
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purposes hereof, "Country Risks" shall mean systemic risks of holding
assets in a particular country including, but not limited to, (a) such country's
financial infrastructure, (b) such country's prevailing custody and settlement
practices, (c) nationalization, expropriation or other governmental actions, (d)
regulation of the banking or securities industry, (f) currency controls,
restrictions, devaluations or fluctuations, and (f) market conditions which
affect the orderly execution of securities transactions or affect the value of
securities.
SECTION IV. REPRESENTATIONS.
1. The Corporation hereby represents that: (a) this Foreign Custody Manager
Agreement has been duly authorized, executed and delivered on behalf of the
Fund, constitutes a valid and legally binding obligation of the Corporation, on
behalf of the Fund, enforceable in accordance with its terms, and no statute,
regulation, rule, order, judgment or contract binding on the Corporation or the
Fund prohibits the Corporation's execution or performance of this Agreement;
(b) this Foreign Custody Manager Agreement has been approved and ratified by the
Board at a meeting duly called and at which a quorum was at all times present;
and (c) the Board or its investment advisor has considered the Country Risks
associated with investment in each Specified Country and will have considered
such risks prior to any settlement instructions being given to the Custodian
with respect to any other Specified Country.
2. The Custodian hereby represents that: (a) the Custodian is duly
organized and existing as a national banking association, with full power to
carry on its businesses as now conducted, and to enter into this Foreign Custody
Manager Agreement and to perform its obligations hereunder; (b) this Foreign
Custody Manager Agreement has been duly authorized, executed and delivered by
the Custodian, constitutes a valid and legally binding obligation of the
Custodian enforceable in accordance with its terms, and no statute, regulation,
rule, order, judgment or contract binding on the Custodian prohibits the
Custodian's execution or performance of this Foreign Custody Manager Agreement;
and (c) the Custodian has established the Monitoring System.
SECTION V. LIABILITY OF THE CUSTODIAN.
1. The Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained or
incurred by, or asserted against, the Fund except to the extent the same arises
out of the failure of the Custodian to exercise the care, prudence and diligence
required of the Custodian under this Foreign Custody Manager Agreement. In no
event shall the Custodian be liable to the Fund, the Board, or any third party
for special, indirect or consequential damages, or for lost profits or loss of
business, arising in connection with this Foreign Custody Manager Agreement.
2. The Corporation agrees that the Fund shall indemnify the Custodian and
hold it harmless from and against any and all costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained or
incurred by, or asserted against, the Custodian by reason or as a result of any
action or inaction, or arising out of
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the Custodian's performance hereunder, provided that the Fund shall not
indemnify the Custodian to the extent any such costs, expenses, damages,
liabilities or claims arises out of the Custodian's failure to exercise the
reasonable care, prudence and diligence required of it under this Foreign
Custody Manager Agreement.
3. The Custodian shall have only such duties as are expressly set forth
herein. In no event shall the Custodian be liable for any Country Risks
associated with investments in a particular country.
SECTION VI. MISCELLANEOUS.
1. For its services hereunder, the Corporation agrees that the Fund will
pay to the Custodian such compensation and out-of-pocket expenses as shall be
mutually agreed.
2. This Foreign Custody Manager Agreement constitutes the entire agreement
between the Corporation, with respect to the Fund, and the Custodian, and no
provision in the Custody Agreement between the Corporation and the Custodian
shall affect the duties and obligations of the Custodian as a Foreign Custody
Manager hereunder, nor shall any provision in this Foreign Custody Manager
Agreement affect the duties or obligations of the Custodian under the Custody
Agreement.
3. Any notice or other instrument in writing, authorized or required by
this Foreign Custody Manager Agreement to be given to the Custodian, shall be
sufficiently given if received by it at its offices at:
Xxxxx Fargo Bank, N.A.
Attn: Xxxxxxxx Xxxxxxxxx, VP
Global Custody - N9306-05C
000 Xxxxxxxxx Xxx X
Xxxxxxxxxxx, XX 00000
4. Any notice or other instrument in writing, authorized or required by
this Foreign Custody Manager Agreement to be given to the Fund shall be
sufficiently given if received by it at its offices at:
Advantus Series Fund, Inc.
Attn :
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000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000
5. This Foreign Custody Manager Agreement shall be construed in accordance
with the substantive laws of the State of Minnesota, without regard to conflicts
of laws principles thereof. The Corporation, on behalf of the Fund, and the
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Custodian each hereby irrevocably waives any and all rights to trial by jury
in any legal proceeding arising out of or relating to this Foreign Custody
Manager Agreement.
6. This Foreign Custody Manager Agreement shall terminate simultaneously
with the termination of the Custody Agreement between the Corporation, with
respect to the Fund, and the Custodian, and may otherwise be terminated by
either party giving to the other party a notice in writing specifying the date
of such termination, which shall be not less than thirty (30) days after the
date of such notice.
If the foregoing corresponds to your understanding of our agreement, please
indicate your acceptance by the signature of your authorized representative
below.
Yours truly,
XXXXX FARGO BANK, N.A.
By
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Name:
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Title:
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Agreed and Accepted: Advantus Series Fund, Inc. on behalf of ADVANTUS REAL
ESTATE FUND
By
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Name:
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Title:
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Date:
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TC1JJ192
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EXHIBIT A
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Whenever used in the Foreign Custody Manager Agreement (the
"Agreement"), the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
1. "BOARD" shall mean the board of directors or board of trustees, as the
case may be, of the Corporation
2. "ELIGIBLE FOREIGN CUSTODIAN" shall have the meaning provided in the
Rule.
3. "ELIGIBLE SECURITIES DEPOSITORY" shall mean a system for the central
handling of securities as defined in Rule 17f-7 under the Investment Company Act
of 1940 ("the Act").
4. "MONITORING SYSTEM" shall mean a system established by the Custodian to
fulfill the Responsibilities specified in clauses 1(d) and 1(e) of Article III
of the Agreement.
5. "QUALIFIED FOREIGN BANK" shall have the meaning provided in the Rule.
6. "RESPONSIBILITIES" shall mean the responsibilities delegated to the
Custodian as a Foreign Custody Manager with respect to each Specified Country
and each Eligible Foreign Custodian, as such responsibilities are more fully
described in Sections II and III of the Agreement.
7. "RULE" shall mean Rule 17f-5 under the Act, as amended.
8. "SPECIFIED COUNTRY" shall mean each country identified on a list
maintained from time to time by mutual agreement of the Corporation, with
respect to the Fund, and the Custodian and each country, other than the United
States, constituting the primary market for a security with respect to which the
Fund has given settlement instructions to the Custodian as custodian (the
"Custodian") under its Custody Agreement with the Corporation.
