EXHIBIT J2
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RULE 17F-5 AMENDMENT TO CUSTODIAN AGREEMENT
AMENDMENT, dated August 19, 1999 to the Custodian Agreement ("Agreement")
between UAM Funds, Inc. II ("Fund"), a Maryland corporation, and First Union
National Bank, a National Bank ("First Union").
WHEREAS, the Fund desires to appoint First Union as a Foreign Custody
Manager on the terms and conditions contained herein;
WHEREAS, First Union desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and conditions contained
herein.
NOW THEREFORE, in consideration of the mutual premises hereinafter
contained in this Agreement, the Fund and First Union hereby agree as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended by adding a new Paragraph 18 as
follows:
18. Compliance with SEC Rule 17f-5.
------------------------------------
a. Appointment. The Fund hereby appoints First Union as a Foreign Custody
------------
Manager to perform the responsibilities set forth in this Paragraph 18 with
respect to Foreign Assets, and First Union hereby accepts such appointment as a
Foreign Custody Manager of the Fund. First Union agrees to fulfill its duties
and perform its responsibilities hereunder in accordance with SEC Rule 17f-5,
the Fund's currently effective registration statement, the Fund's currently
effective registration statement, and such other instructions as may be
communicated to First Union by the Fund from time-to-time.
b. Standard of Care. First Union shall use the reasonable care, prudence, and
-----------------
diligence a person having responsibility for the safekeeping of the assets of an
investment company registered under the 1940 Act would exercise in performing
the responsibilities set forth in this Paragraph 18.
c. Scope of Responsibilities as Foreign Custody Manager.
-----------------------------------------------------
(i) Selection. First Union shall place and maintain Foreign Assets in
the care of one or more Eligible Foreign Custodians. In performing its
responsibilities to place and maintain Foreign Assets with an Eligible Foreign
Custodian, First Union shall determine that the Eligible Foreign Custodian will
hold Foreign Assets in the exercise of
1
reasonable care, based on the standards applicable to custodians in the
jurisdiction or market 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:
(A) the Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if
applicable), its methods of keeping custodial records, its
security and data protection practices, settlement practices, and
its Year 2000 and Euro conversion safeguards, preparations and
precautions;
(B) whether the Eligible Foreign Custodian has the financial strength
to provide reasonable care for Foreign Assets and to protect
Foreign Assets against the Eligible Foreign Custodian's
insolvency;
(C) the Eligible Foreign Custodian's general reputation and standing
and, in the case of a Securities Depository, the Securities
Depository's operating history and the number of participants
therein; and
(D) whether the Fund will have jurisdiction over, and be able to
enforce judgments against, the Eligible Foreign Custodian in the
United States.
First Union shall have no responsibility under this Paragraph 18.c.(i) with
respect to Compulsory Depositories; however, it will be responsible for
providing the Fund or its delegate information necessary to aid in its
responsibility with respect to selecting Compulsory Depositories, as described
in Appendix 1-B.
(ii) Contracts. First Union shall ensure that the Fund's foreign
custody arrangements with each Eligible Foreign Custodian are governed by a
written contract with such Eligible Foreign 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). First Union shall determine that the written contract (or in the
case of a Securities Depository, the written contract, the rules or established
practices or procedures of the Securities Depository, or any combination of the
foregoing) governing the foreign custody arrangements with each Eligible Foreign
Custodian First Union selects will provide reasonable care for Foreign Assets
held by that Eligible Foreign Custodian. Each written contract will include
terms that provide:
(A) for indemnification and/or insurance arrangements such that the
Fund will be adequately protected against the risk of loss of the
Foreign Assets held in accordance with such contract;
2
(B) that the Foreign Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the Eligible Foreign Custodian or its creditors, except a claim
for the Eligible Foreign Custodian's services under the contract
or, in the case of cash deposits, liens or rights in favor of
creditors of such Eligible Foreign Custodian arising under
bankruptcy, insolvency or similar laws;
(C) that beneficial ownership of the Foreign Assets will be freely
transferable without the payment of money or value, other than
payments for the Eligible Foreign Custodian's services under the
contract;
(D) that the Eligible Foreign Custodian will maintain adequate
records identifying the Foreign Assets held under the contract
as belonging to a Portfolio or as being held by a third party
for the benefit of a Portfolio;
(E) that the Fund's independent public accountants will be given
access to those records or confirmation of the contents of those
records; and
(F) that the Fund will receive periodic reports with respect to the
safekeeping of the Foreign Assets, including, but not limited
to, notification of any transfer of the Foreign Assets to or
from the account of a Portfolio or a third party account
containing the Foreign Assets held for the benefit of a
Portfolio.
or, in lieu of any or all of the terms set forth in (A) through (F) above, such
other terms that First Union 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 (A) through (F) above in their entirety.
First Union shall have no responsibility under this Paragraph 18.c.(ii) with
respect to Compulsory Depositories; however, it will be responsible for
providing the Fund or its delegate information necessary to aid in its
responsibility with respect to selecting Compulsory Depositories, as described
in Appendix 1-B.
(iii) Monitoring. First Union will establish and maintain a system to
monitor: (i) the appropriateness of maintaining assets with each Eligible
Foreign Custodian; (ii) each Eligible Foreign Custodian's continuing compliance
with the standards set forth in Rule 17f-5 and this Amendment; and (iii)
Material Changes to the Fund's foreign custody arrangements, as defined in
paragraph (d) below (the "Monitoring System").
3
(iv) Withdrawing Fund Assets. In the event that a foreign custody
arrangement no longer meets the terms and conditions set forth in SEC Rule 17f-5
or this Agreement, First Union will promptly notify the Fund and will then act
in accordance with the Fund's Instructions with respect to the disposition of
the affected Foreign Assets. Under exigent circumstances, however, First Union
is authorized to withdraw Foreign Assets if, after using its best efforts to
first notify the Fund via telephone, facsimile or other electronic methods,
forty-eight (48) hours has passed without receiving a response to the
notification from an Authorized Person.
(v) Reporting Requirements. First Union shall report the placement of
Foreign Assets with an Eligible Foreign Custodian and non-Material Changes by
providing a written report to the Board at the end of each calendar quarter.
With respect to Material Changes, First Union shall provide the Board with a
written report promptly after the occurrence of the Material Change. "Material
Changes" may include, but are not limited to: a decision to remove all Foreign
Assets from a particular sub-custodian; any event that may adversely and
materially affect an Eligible Foreign Custodian's financial or operational
strength; First Union's inability to perform its duties in accordance with a
standard of care under this Amendment; a change in control of an Eligible
Foreign Custodian; the failure of an Eligible Foreign Custodian to comply with
the terms of Rule 17f-5, its contract governing the Fund's foreign custody
arrangements or the established practices or procedures of a Securities
Depository; any material change in any contract governing the Fund's foreign
custody arrangements; any material change in the established practices or
procedures of a Securities Depository; the failure of First Union or a foreign
custody arrangement to meet the standards in Rule 17f-5 or this Amendment; any
event that may adversely affect First Union's ability to comply with Rule 17f-5
or this Amendment; and a material change in any information provided to the
Board regarding First Union's expertise in foreign custody issues and risks,
First Union's use of third party experts to perform its foreign custody
responsibilities, the Board's ability to monitor First Union's performance,
First Union's financial strength or its ability to indemnify the Fund.
(vi) Provision of Information. First Union shall provide to the Fund
such information as is specified in Appendix 1-B hereto, as may be amended from
time to time by the parties. The Fund hereby acknowledges that such information
is solely designed to inform the Fund of market conditions and procedures, but
is not intended to influence the Fund's investment decisions. First Union must
use reasonable care in gathering such information. First Union agrees to
promptly notify the Fund's Administrator at the time that First Union becomes
aware of a material change to the information provided or if First Union learns
that any information previously provided is incomplete or inaccurate. At least
annually, First Union will provide to the Fund a written statement as may
reasonably be required to document its compliance with the terms of this
Agreement, as well as information regarding the following factors: (i) First
Union's expertise in foreign custody issues and risks; (ii) First Union's use of
third party experts to perform its foreign custody responsibilities; (iii) the
Board's ability to monitor First Union's performance; and (iv) First Union's
financial strength and its ability to indemnify the Fund if necessary. With
respect to each Eligible Foreign Custodian employed by the Fund under this
4
Paragraph 18 (c)(vi), First Union agrees to provide to the Fund or its
investment adviser any information it possesses regarding Country Risk or the
risks associated with placing or maintaining Foreign Assets with the Eligible
Foreign Custodian.
d. Representations. The Fund hereby represents to First Union that (i) this
----------------
Agreement has been duly authorized, executed and delivered by the Fund,
constitutes a valid and legally binding obligation of the Fund enforceable in
accordance with its terms, and no statute, regulation, rule, order, judgment or
contract binding on the Fund prohibits the Fund's execution or performance under
this Agreement. First Union hereby represents to the Fund that (i) it is a U.S.
Bank with the full power to carry on its businesses as now conducted, and to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by First Union,
constitutes a valid and legally binding obligation of First Union enforceable in
accordance with its terms, and no statute, regulation, rule, order, judgment or
contract binding on First Union prohibits First Union's execution or performance
of this Agreement; and (iii) First Union has established, and agrees to maintain
during the term of this Agreement, the Monitoring System.
In addition to any express or implied warranties made in the Agreement, First
Union hereby represents and warrants that each and every commercial and
noncommercial hardware, software, firmware, mechanical, or electrical product
("Product(s)") utilized, created, assembled, manufactured, developed, or
modified in connection with any goods or services offered or provided under this
Amendment shall, at no additional costs to the Fund, be able to store and
process accurately any and all data reflected in the currency unit of the
European Monetary Union, the Euro, and related to the Euro (including, but not
limited to, calculating, comparing, storing, processing, recording, valuing,
recognizing, validating, presenting, and sequencing). The Fund may, at no
additional cost, require First Union to demonstrate compliance and/or compliance
techniques and test procedures it intends to follow, or evidence of compliance
by First Union and relevant third party vendors, consistent with the Euro-
related representations, warranties, and obligations contained herein. These
representations and warranties shall be in effect so long as the service(s) or
Product(s) provided under this agreement are used by First Union or provided by
First Union for the benefit of the Fund.
e. Condition Precedent. As a condition precedent to First Union's performance
-------------------
under this Amendment, the Fund shall deliver to First Union a certificate from
the Fund's secretary containing the resolution of the Board regarding the
Board's determination that it is reasonable to rely on First Union to perform
the delegated responsibilities provided for herein.
f. Country Risk. First Union's responsibilities under this Paragraph 18 shall
------------
not include, or be deemed to include, any evaluation of Country Risks associated
with investment in a particular country.
g. Best Customer. If at any time First Union is or becomes a party to an
-------------
agreement to serve as Foreign Custody Manager to an investment company that
provides for either: (a)
5
a standard of care with respect to the selection of Eligible Foreign Custodians
in any jurisdiction higher than that set forth in Paragraph 18.c (i) or (ii) a
standard of care with respect to exercise of First Union's duties other than
that set forth in Paragraph 18.b, First Union agrees to notify the Fund of this
fact and to raise the applicable standard of care hereunder to the standard
specified in such other agreement. In the event that First Union offers services
to an investment company with respect to Compulsory Depositories in addition to
those First Union provides to the Fund hereunder, First Union agrees that it
will notify the Fund of this fact and will offer such services to the Fund
subject to its normal commercial terms for such services.
h. Direction of Eligible Foreign Custodians. The Fund may direct First Union
----------------------------------------
to place and maintain Foreign Assets with a particular Eligible Foreign
Custodian. In such event, First Union will have no duties under this Paragraph
18 with respect to such arrangement, except those included under Paragraph 18.c
(vi) and those that it may undertake specifically in writing.
i Tax Services.
------------
(i) First Union shall apply for a reduction of withholding tax and
any refund of any tax paid or tax credits that apply in each market in respect
of income payments on Assets for the benefit of the Fund which First Union
believes may be available to the Fund. If the Fund is eligible, pursuant to
applicable law or to the provisions of any tax treaty, for a reduced rate of, or
exemption from, any tax which is otherwise required to be withheld or paid on
behalf of the Fund under any applicable law, First Union shall, or shall
instruct the applicable Eligible Foreign Custodian or withholding agent to,
either withhold or pay such tax at such reduced rate or refrain from withholding
or paying such tax, as appropriate. In the event that a reduced rate of, or
exemption from, any tax is obtainable only by means of an application for
refund, First Union shall, or shall instruct the applicable Eligible Foreign
Custodian or withholding agent to, apply for such refund. The provision of tax
services is conditional upon the Fund's provision to First Union of all
documentary evidence as First Union shall reasonably require in connection with
taxation, and the Fund warrants that when given, this information shall be true
and correct in every material respect. The Fund undertakes to notify First Union
immediately if any such information requires updating or amendment.
(ii) First Union and the applicable Eligible Foreign Custodian shall
have no responsibility for the accuracy or validity of any forms or
documentation the Fund provides to First Union hereunder, and the Fund hereby
indemnifies and agrees to hold harmless First Union and each Eligible Foreign
Custodian in respect of any liability arising from any underwithholding or
underpayment of any tax which results from the inaccuracy or invalidity of any
such forms or other documentation.
(iii) First Union and the applicable Eligible Foreign Custodian shall
not be liable to the Fund or any third party for any taxes, fines or penalties
payable by the Fund or First Union, and shall be indemnified accordingly,
whether these result form the
6
Fund's or any third party's inaccurate completion of documents, or as a result
of the Fund's or any third party's provision of inaccurate or misleading
information or the withholding of material information, or as a result of any
delay of any revenue authority or any other event beyond the control of First
Union or any Eligible Foreign Custodian.
(iv) First Union shall perform tax reclaim services only for taxation
levied by the revenue authorities of the countries notified to First Union from
time to time, and First Union may, after notifying the Fund in writing,
supplement or amend the markets in which it offers tax reclaim services. Other
than as expressly provided in this clause (iv), First Union shall have no
responsibility for the Fund's tax position or status in any jurisdiction.
(v) First Union is authorized to deduct from any Property in the form
of cash any taxes or levies required by any revenue or governmental authority
under applicable law in respect of the Account.
j. Definitions.
-----------
"Board" means the board of trustees or board of directors, as applicable, of the
Fund.
"Compulsory Depository" means a Securities Depository listed on Appendix 1-A
hereto, as the Board, its delegate or its duly authorized officer(s) may amend
from time to time, upon notice to First Union.
"Country Risks" means the systemic risks arising from holding assets in a
particular country, including those arising from a country's financial
infrastructure, prevailing custody and settlement practices; expropriation, and
nationalization or other governmental actions; and laws applicable to the
safekeeping and recovery of assets held in custody in such country.
"Eligible Foreign Custodian" means an Eligible Foreign Custodian as defined in
SEC Rule 17f-5(a)(1) and any other entity that the SEC qualifies as such by
exemptive order, no-action relief, rule or other appropriate SEC action.
"Foreign Assets" means any Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolio's
transactions in such investments.
"Foreign Custody Manager" means a Foreign Custody Manager as defined in SEC Rule
17f-5(a)(2).
"Portfolio" means each separate series of shares offered by the Fund
representing interests in a separate portfolio of securities and other assets.
"SEC" means the U.S. Securities and Exchange Commission.
7
"Securities Depository" means any securities depository or clearing agency
within the meaning of SEC Rule 17f-5(a)(1)(ii) or (iii).
"U.S. Bank" means a U.S. bank as defined in SEC Rule 17f-5(a)(7).
"1940 Act" means the Investment Company Act of 1940.
k. Authorization. Subject to the terms and conditions herein, First Union is
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hereby authorized to: (i) place and maintain Foreign Assets on behalf of the
Fund with Eligible Foreign Custodians pursuant to a written contract determined
appropriate by First Union in accordance with the terms and conditions herein
and (ii) withdraw Foreign Assets from Eligible Foreign Custodians in accordance
with the terms and conditions herein.
l. Concerning First Union
----------------------
(i) For its services hereunder, the Fund agrees to pay to First Union
such compensation and out-of-pocket expenses as shall be mutually agreed.
(ii) First Union shall have only such duties as are expressly set
forth herein. In no event shall First Union be liable for any Country Risks
associated with investments in a particular country.
m. Counterparts. This Agreement may be executed in any number of counterparts,
------------
each of which shall be deemed to be an original, but such counterparts shall
together, constitute only one instrument.
IN WITNESS WHEREOF, the Fund and First Union have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as of the
date first above written.
UAM FUNDS, INC. II
By: /s/ Xxxx X. Xxxxxx
Treasurer
Tax Identification No.
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
Vice President
8
Appendix 1-A
List of Compulsory Depositories, as determined by the Board, its delegate or
duly authorized officers of the Fund:
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APPENDIX 1-A
Securities Depositories
As of August 1999
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COUNTRY DEPOSITORY INSTRUMENT
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Argentina Caja de Valores S.A. Equity, Corporate & Government Debt
Compulsory
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Australia Austraclear Ltd. Corporate Debt, Money Market & Semi-Government Debt
Compulsory
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Australia CHESS Equity
(Clearing House Electronic Subregister System) Compulsory
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Australia RITS Government Debt
(Reserve Bank Information and Transfer System) Compulsory
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Austria Osterreichische Kontrolbank AG Equity, Corporate + Government Debt
Compulsory
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Belgium CIK Equity + Corporate Debt
(Caisse Interprofessionnelle de Depots et de
Virements de Titres s.a.) Compulsory
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Belgium Banque Nationale de Belgique Treasury Bills + Government Debt
Compulsory
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Brazil CBLC Equity
(Companhia Brasileira de Liquidacao e Custodia) Compulsory
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Brazil CLC Equity
(Camara de Liquidacao e Custodia Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Brazil CETIP Corporate Debt
Compulsory
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Bulgaria BNB Government Debt
(Bulgaria National Bank) Compulsory
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Bulgaria Central Depository A.D. Equity
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Canada CDS Equity, Corporate + Government Debt
(The Canadian Depository for Securities Ltd.) Compulsory
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Chile DCV Equity, Corporate + Government Debt
(Deposito Central de Valores) Compulsory for government debt securities and for
brokers as of November 1998; will be compulsory for all
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9
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market participants during 1999.
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China, Shanghai SSCCRC Equity
(Shanghai Securities Central Clearing and Compulsory
Registration Corporation)
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China, Shenzhen SSCC Equity
(Shenzhen Securities Clearing Company, Limited) Compulsory
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Colombia DCV Government debt issued, guaranteed or administered by
(Deposito Central de Valores) the central bank.
Compulsory
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Colombia DECEVAL Equity, Corporate + Government Debt
(Deposito Central de Valores) Voluntary. Due to change in tax status of DECEVAL,
use of DECEVAL is becoming market standard.
--------------------------------------------------------------------------------------------------------------------------------
Croatia CDA Equity and listed government debt. (Created in April
(Central Depository Agency) 1997, the CDA is expected to be operational in 1999)
Compulsory
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Croatia Ministry of Finance Registry & Short-term debt issued by the Ministry of Finance and
National Bank of Croatia Registry the National Bank of Croatia, respectively.
Compulsory
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Czech Republic SCP Equity + Long-Term Government Debt
(Stredisko cennych papiru) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Denmark VP Equity, Corporate + Government Debt
(Vaerdipapircentralen) Compulsory
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Egypt Misr Clearing, Settlement and Depository, Equity
S.A.E. Compulsory
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Estonia EVK Equity
(Estonian Central Depository for Securities Compulsory
Limited)
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Euromarket Cedel & Euroclear Euro-Debt
Compulsory
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Finland CSR Equity + Government Debt
(Central Share Registry Finland) Compulsory
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France SICOVAM Equity + Corporate Debt
(Societe Interprofessionnelle pour la Compulsory
Compensation des Valeurs Mobilieres, S.A.)
--------------------------------------------------------------------------------------------------------------------------------
Germany DBC Equity, Corporate + Government Debt
(Deutsche Boerse Clearing AG) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Greece Apothetirio Titlon A.E. Equity
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Greece Bank of Greece Government Debt
Compulsory
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Hong Kong CCASS Equity
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10
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(Central Clearing and Settlement System) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Hong Kong CMU Corporate + Government Debt
(Central Moneymarkets Unit) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Hungary Keler Ltd. Equity + Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
India NSDL Equity + Corporate Debt
(National Securities Depository Limited) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Indonesia KSEI Equity
(PT Dustodian sentral Efek Indonesia) Voluntary
--------------------------------------------------------------------------------------------------------------------------------
Ireland CRESTCo Limited Equity
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Ireland GSO Government Debt
(Gilt Settlement Office) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Israel TASE Clearing House Equity, Corporate + Government Debt
(Tel Aviv Stock Exchange Clearing House) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Italy Monte Titoli S.p.a. Equity + Corporate Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Italy Bank of Italy Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Japan JASDEC Equity
(Japan Securities Depository Center) Voluntary
--------------------------------------------------------------------------------------------------------------------------------
Japan Bank of Japan Registered Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Kazahkstan Central Securities Depository Mandatory for all equity securities traded on the
Kazahkstan Stock Exchange. Currently all trading is
over the counter.
Voluntary
--------------------------------------------------------------------------------------------------------------------------------
Latvia LCD Equity + Government Debt
(Latvian Central Depository) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Lebanon Midclear Equity
(Custodian and Clearing Center of Lebanon and Compulsory
the Middle East)
--------------------------------------------------------------------------------------------------------------------------------
Lithuania CSDL Equity + Government Debt
(Central Securities Depository of Lithuania) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Luxembourg Cedel Bank, s.a. Equity
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Malaysia MCD Equity
(Malaysian Central Depository Snd Bhd) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
11
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Mauritius CDS Equity
(Central Depository and Settlement Company Compulsory
Limited)
--------------------------------------------------------------------------------------------------------------------------------
Mexico Indeval Equity, Corporate + Government Debt.
(Institucion para el Deposito de Valores) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Morocco Maroclear Equity + Corporate Debt (will be compulsory as of
March 21, 1999)
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Netherlands NECIGEF Equity, Corp. + Govt. D
(Nederlands Centraal Insituut voor Giraal Compulsory
Effectenverkeer B.V.)
--------------------------------------------------------------------------------------------------------------------------------
New Zealand Austraclear New Zealand Equity, Corporate + Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Norway VPS Equity, Corporate + Government Debt
(Verdipapirsentralen) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Oman MSM Equity
(Muscat Securities Market) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Pakistan CDC Equity
(Central Depository Company of Pakistan Limited) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Peru CAVALI Equity
(Caja de Valores y Liquidaciones) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Philippines PCD Equity
(Philippine Central Depository Inc.) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Poland NDS Equity, Long-Term Government Debt + Vouchers
(National Securities Depository) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Poland CRT Treasury-Bills
(Central Registry of Treasury-Bills) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Portugal Interbolsa Equity, Corporate + Government Debt
(Central de Valores Mobiliarios e Sistema de Compulsory
Liquidacao e Compensacao)
--------------------------------------------------------------------------------------------------------------------------------
Romania SNCDD - RASDAQ Equity
(National Company for Clearing, Settlement and Compulsory
Depository for Securities)
--------------------------------------------------------------------------------------------------------------------------------
Romania BSE Equity
(Bucharest Stock Exchange Registry) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Romania National Bank of Romania Treasury-Bills
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Russia Vnestorgbank Ministry of Finance Bonds
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Russia National Depository Center GKOs are Treasury Bills with three months to one
year maturity; OFZs are Federal Loan bonds with
--------------------------------------------------------------------------------------------------------------------------------
12
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one to two years' maturity.
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Singapore CDP Equity + Corporate Debt and Malaysian equities traded
(Central Depository (Pte.) Ltd.) on CLOB
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Singapore Monetary Authority of Singapore Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Slovak Republic SCP Equity + Government Debt
(Stredisko Cennych Papierov) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Slovak Republic National Bank of Slovakia Treasury-Bills
Compulsory
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Slovenia KDD Equity + Corporate Debt
(The Centralna Klirinsko Depotna Xxxxxx x.x. Compulsory
--------------------------------------------------------------------------------------------------------------------------------
South Africa CD Corporate + Government Debt
(Central Depository (Pty) Limited) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
South Korea KSD Equity, Corporate + Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Spain SCLV Equity + Corporate Debt.
(Servicio de Compensacion y Liquidacion de
Valores, S.A.) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Spain CBEO Government Debt
(Central Book Entry Office) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Sri Lanka CDS Equity
(Central Depository System (Pte) Limited) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Sweden VPC Equity, Corporate + Government Debt
(Vardepapperscentralen AB) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Switzerland SEGA Equity, Corporate + Government Debt
(Schweizerische Effekten-Giro AG) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Taiwan TSCD Equity + Government Debt
(Taiwan Securities Central Depository Co., Ltd.) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Thailand TSDC Equity, Corporate + Government Debt
(Thailand Securities Depository Company Limited) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Tunisia STICODEVAM Equity
(Societe Tunisienne Interprofessionnelle pour la
Compensation et le Depot des Valeurs Mobilieres) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Tunisia Ministry of Finance Government Debt tradable on the stock exchange (BTNBs)
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Tunisia Central Bank of Tunisia Government Debt not tradable on the stock exchange
--------------------------------------------------------------------------------------------------------------------------------
13
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(BTCs)
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Turkey IMKB Takas ve Saklama Bankasi A.S. Equity + Corporate Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Turkey Central Bank of Turkey Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United Kingdom CRESTCo Limited Equity + Corp. Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United Kingdom CMO Sterling CDs & CP
(Central Moneymarket Office) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United Kingdom CGO Gilts
(Central Gilts Office) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United States DTC Equity + Corporate Debt
(Depository Trust Company) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United States PTC Mortgage Back Debt
(Participants Trust Company) Compulsory
--------------------------------------------------------------------------------------------------------------------------------
United States Fed Book-Entry System Government Debt
Compulsory
--------------------------------------------------------------------------------------------------------------------------------
Zambia XxXX Equity + Government Debt
(XxXX Central Shares Depository Limited) Compulsory
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14
Appendix 1-B
Information Regarding Country Risk and Compulsory Depositories
1. To aid the Fund or its delegate in its consideration of Country Risks,
First Union shall furnish the Fund annually and prior to the initial placing of
Foreign Assets into a country, the following information:
a. Opinions of local counsel, both internal and concerning whether
applicable foreign law would restrict the: (i) access afforded the Fund's
independent public accountants to books and records kept by an Eligible Foreign
Custodian located in that country; (ii) Fund's ability to recover its Foreign
Assets in the event of the bankruptcy of an Eligible Foreign Custodian in that
country; or (iii) Fund's ability to recover Foreign Assets that are lost while
under the control of an Eligible Foreign Custodian located in that country.
b. Written information concerning: (i) the likelihood of expropriation,
nationalization, freezes, or confiscation of the Fund's Foreign Assets and (ii)
whether difficulties in converting the Fund's cash and cash equivalents to U.S.
dollars are reasonably foreseeable.
c. A market report with respect to the following topics: (i) securities
regulatory environment; (ii) foreign ownership restrictions; (iii) foreign
exchange; (iv) securities settlement and registration; (v) taxation; and (vi)
compulsory depositories.
2. To aid the Fund in monitoring Country Risk, First Union shall furnish the
Fund with the following information: [Market flashes], including with respect to
changes in the information contained in the above market reports.
3. To aid the Fund or its delegate in selecting Compulsory Depositories, First
Union shall furnish the Fund with the following information: (i) information
regarding the Compulsory Depository's practices, procedures and internal
controls, including the Eligible Foreign Custodian's physical facilities to
safeguard certificated securities, settlement practices (such as whether trades
are settled strictly on a "delivery vs. payment" or some other basis), security
and data protection practices, and recordkeeping methods, and its Year 2000 and
Euro conversion safeguards, preparations and precautions; (ii) financial
information on the Compulsory Depository, including, but not limited to, the
Compulsory Depository's most recently audited financial statements (prepared
according to U.S. GAAP, if feasible); (iii) the Compulsory Depository's general
reputation and standing, both in its own country and abroad, including, but not
limited to, the Compulsory Depository's operating history and number of
participants; and (iv) information regarding whether the Fund has U.S.
jurisdiction over the Compulsory Depository and whether the Fund can enforce
judgments against the Compulsory Depository.
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4. First Union shall furnish additional information customarily provided to
other investment companies registered under the Investment Company Act of 1940
for which First Union provides foreign custody services.
5. First Union shall furnish additional information regarding Country Risks
and Compulsory Depositories as the Fund may reasonably request from time to
time.
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