FORM OF CUSTODIAN AND INVESTMENT ACCOUNTING AGREEMENT
This Agreement is made effective the 1st day of November, 2001, by and
between EACH OF THE FUNDS SET FORTH ON EXHIBIT A HERETO, each a business trust
or corporation organized and existing under the laws of the jurisdiction listed
on Exhibit A (each a "FUND"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company ("STATE STREET"),
WITNESSETH:
WHEREAS, Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, Fund intends that this Agreement be applicable to each of its
series existing on the date hereof (such series together with all other series
subsequently established by Fund and made subject to this Agreement in
accordance with Section 16.2, be referred to herein as the "PORTFOLIO(S)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
XXXXXXX 0 XXXXXXXXXXX XX XXXXX XXXXXX AS CUSTODIAN AND RECORDKEEPING AGENT. Fund
hereby appoints State Street as the custodian of the assets of the Portfolios,
including securities that Fund, on behalf of the applicable Portfolio, desires
to be held in places within the United States ("DOMESTIC SECURITIES") and
securities it desires to be held outside the United States ("FOREIGN
SECURITIES"). Fund, on behalf of the Portfolio(s), agrees to deliver to State
Street all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of Fund representing interests in the Portfolios ("SHARES") as may be
issued or sold from time to time. State Street shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
State Street.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 6
hereof), State Street shall on behalf of the applicable Portfolio(s) from time
to time appoint one or more sub-custodians located in the United States, but
only in accordance with an applicable vote by the Board of Trustees or Directors
of Fund (the "BOARD") on behalf of the applicable Portfolio(s). State Street may
appoint as sub-custodian for Fund's foreign securities on behalf of the
applicable Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto, but only in accordance with
the applicable provisions of Sections 3 and 4. State Street shall have no more
or less responsibility or liability to Fund on account of any actions or
omissions of any sub-custodian so appointed as if State Street had not retained
a sub-custodian.
Fund hereby appoints State Street as agent to perform certain investment
accounting and recordkeeping functions relating to portfolio transactions
required of a duly registered investment company under Rule 31a of the
Investment Company Act of 1940, as amended and the rules promulgated thereunder,
including without limitation Rules 31a-1, 31a-2 and 31a-3 (the
"1940 ACT") and to calculate the net asset value of the Portfolio(s) in
accordance with the provisions of Section 9 hereof.
SECTION 2 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY OF FUND HELD
BY STATE STREET IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. State Street shall hold and physically
segregate for the account of each Portfolio all non-cash property to be held by
it in the United States, including all domestic securities other than securities
which are maintained pursuant to Section 2.8 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury (each, a "U.S. SECURITIES SYSTEM").
SECTION 2.2 DELIVERY OF SECURITIES. State Street shall release and
deliver domestic securities held by State Street or in a U.S. Securities System
account of State Street only upon receipt of Proper Instructions on behalf of
the applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.8
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to State Street;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee(s) of
State Street or into the name or nominee name of any agent
appointed pursuant to Section 2.7 or into the name or nominee
name of any sub-custodian appointed pursuant to Section 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to State Street;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, State Street shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from State Street's own
negligence or willful misconduct;
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8) For exchange or conversion pursuant to any corporate action,
including without limitation, any calls for redemption, tender
or exchange offers, declarations, record and payment dates and
amounts of any dividends or income, plan of merger,
consolidation, recapitalization, reorganization, readjustment,
split-up of shares, changes of par value, or conversion
("CORPORATE ACTION") of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to State Street;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to State Street;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate
collateral as agreed upon from time to time by State Street
and Fund on behalf of the Portfolio, which may be in the form
of cash or obligations issued by the United States government,
its agencies or instrumentalities, except that in connection
with any loans for which collateral is to be credited to State
Street's account in the book-entry system authorized by the
U.S. Department of the Treasury, State Street will not be held
liable or responsible for the delivery of securities owned by
the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowing by
Fund on behalf of the Portfolio requiring a pledge of assets
by Fund , but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among Fund on behalf of the Portfolio, State Street
and a broker-dealer registered under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to
compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Portfolio;
13) For delivery in accordance with the provisions of any
agreement among Fund on behalf of the Portfolio, State Street,
and a futures commission merchant registered under the
Commodity Exchange Act, relating to compliance with the rules
of the Commodity Futures Trading Commission ("CFTC") and/or
any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio;
14) Upon receipt of instructions from the transfer agent for Fund
(the "TRANSFER AGENT") for delivery to such Transfer Agent or
to the holders of Shares in connection with distributions in
kind, as may be described from time to time in the currently
effective prospectus and statement of additional information
related to the Portfolio (the "PROSPECTUS"), in satisfaction
of requests by holders of Shares for repurchase or redemption;
and
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15) For any other purpose, but only upon receipt of Proper
Instructions on behalf of the applicable Portfolio specifying
the securities to be delivered and naming the person or
persons to whom delivery of such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities (other than
bearer securities) shall be registered in the name of the Portfolio or in the
name of any nominee of Fund on behalf of the Portfolio or of State Street which
nominee shall be assigned exclusively to the Portfolio, unless Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment advisor as the
Portfolio, or in the name or nominee name of any agent appointed pursuant to
Section 2.7 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by State Street under the terms
hereof shall be in "street name" or other good delivery form. If, however, Fund
directs State Street to maintain securities in "street name", State Street shall
utilize its best efforts only to timely collect income due Fund on such
securities and to notify Fund on a best efforts basis only of relevant
information regarding securities such as maturities and pendency of calls and
Corporate Actions.
SECTION 2.4 BANK ACCOUNTS. State Street shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio, subject only to draft or order by State Street acting pursuant
hereto, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Portfolio, other
than cash maintained by the Portfolio in an account established and used in
accordance with Rule 17f-3 under the 1940 Act. Funds held by State Street for a
Portfolio may be deposited by it to its credit as custodian in the banking
department of State Street or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the funds to be deposited
with each such bank or trust company shall on behalf of each applicable
Portfolio be approved by vote of a majority of the Board. Such funds shall be
deposited by State Street in its capacity as custodian and shall be withdrawable
by State Street only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Xxxxxxx
0.0, Xxxxx Xxxxxx shall collect on a timely basis all income and other payments
with respect to registered domestic securities to which each Portfolio shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by State Street or its agent thereof and shall credit such
income, as collected, to such Portfolio's custodian account. Without limiting
the generality of the foregoing, State Street shall detach and present for
payment all coupons and other income items requiring presentation as and when
they become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of Fund. State Street
will have no duty or responsibility in connection therewith, other than to
provide Fund with such information or data as may be necessary to assist Fund in
arranging for the timely delivery to State Street of the income to which the
Portfolio is properly entitled.
SECTION 2.6 PAYMENT OF PORTFOLIOMONIES. Except to the extent that
Section 4.4.2 applies, upon receipt of Proper Instructions on behalf of the
applicable Portfolio, which may be
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continuing instructions when deemed appropriate by the parties, State Street
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to State Street (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by State Street
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of State Street referred
to in Section 2.3 hereof or in proper form for transfer; (b)
in the case of a purchase effected through a U.S. Securities
System, in accordance with the conditions set forth in Section
2.8 hereof; (c) in the case of repurchase agreements entered
into between Fund on behalf of the Portfolio and State Street,
or another bank, or a broker-dealer which is a member of NASD,
(i) against delivery of the securities either in certificate
form or through an entry crediting State Street's account at
the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio
of securities owned by State Street along with written
evidence of the agreement by State Street to repurchase such
securities from the Portfolio; or (d) for transfer to a time
deposit account of Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions ;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued as set forth
in Section 5 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant
to the Declaration of Trust, Articles of Incorporation, Bylaws
or other governing documents of Fund (collectively, the
"GOVERNING DOCUMENTS");
6) For payment of the amount of dividends received in respect of
securities sold short; and
7) For any other purpose, but only upon receipt of Proper
Instructions on behalf of the Portfolio specifying the amount
of such payment and naming the person or persons to whom such
payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. State Street may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions
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of this Section 2 as State Street may from time to time direct; provided,
however, that the appointment of any agent shall not relieve State Street of its
responsibilities or liabilities hereunder.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. State
Street may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System subject to the following provisions:
0) Xxxxx Xxxxxx may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account of State Street in the U.S.
Securities System (the "U.S. SECURITIES SYSTEM ACCOUNT") which
account shall not include any assets of State Street other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of State Street with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;
0) Xxxxx Xxxxxx shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the U.S. Securities System Account, and (ii)
the making of an entry on the records of State Street to
reflect such payment and transfer for the account of the
Portfolio. State Street shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that payment for such securities has
been transferred to the U.S. Securities System Account, and
(ii) the making of an entry on the records of State Street to
reflect such transfer and payment for the account of the
Portfolio. Copies of all advices from the U.S. Securities
System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for the
Portfolio by State Street and be provided to Fund at its
request. Upon request, State Street shall furnish Fund on
behalf of the Portfolio confirmation of each transfer to or
from the account of the Portfolio in the form of a written
advice or notice and shall furnish to Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transactions in the U.S. Securities System for the
account of the Portfolio;
4) State Street shall provide Fund with any report obtained by
State Street on the U.S. Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities
System;
5) Anything to the contrary herein notwithstanding, State Street
shall be liable to Fund for the benefit of the Portfolio for
any loss or damage to the Portfolio resulting from use of the
U.S. Securities System by reason of any negligence,
misfeasance or misconduct of State Street or any of its agents
or of any of its their employees or from failure of State
Street or any such agent to enforce effectively such rights as
it may have against the U.S. Securities System; at the
election of Fund, it shall be entitled to be subrogated to the
rights of State Street with respect to any claim against the
U.S. Securities System or any other person which State
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Street may have as a consequence of any such loss or damage if
and to the extent that the Portfolio has not been made whole
for any such loss or damage.
SECTION 2.9 SEGREGATED ACCOUNT. State Street shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by State Street
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among Fund on behalf of the Portfolio, State Street and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the CFTC or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Portfolio,
(ii) for purposes of segregating cash or government securities in connection
with options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release of the U.S.
Securities and Exchange Commission (the "SEC"), or interpretative opinion of the
staff of the SEC, relating to the maintenance of segregated accounts by
registered investment companies, and (iv) for any other purpose upon receipt of
Proper Instructions on behalf of the applicable Portfolio.
SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. State Street
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Portfolio and in connection with
transfers of securities.
SECTION 2.11 PROXIES. State Street shall, with respect to domestic
securities, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of the
Portfolio or a nominee of the Portfolio, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Portfolio such proxies, all proxy soliciting materials and all notices relating
to such securities.
SECTION 2.12 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject
to the provisions of Xxxxxxx 0.0, Xxxxx Xxxxxx shall transmit promptly to Fund
for each Portfolio all written information received by State Street from issuers
of the securities being held for the Portfolio with respect to Corporate
Actions, notices of exercise of call and put options written by Fund on behalf
of the Portfolio, and the maturity of futures contracts purchased or sold by the
Portfolio. With respect to tender or exchange offers, State Street shall
transmit promptly to the Portfolio all written information received by State
Street from issuers of the securities whose tender or exchange is sought and
from the party (or its agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any Corporate Action, the
Portfolio shall provide Proper Instruction to State Street at least three
business days prior to the date on which State Street is to take such action.
SECTION 3 PROVISIONS RELATING TO RULES 17F-5 AND 17F-7
SECTION 3.1 DEFINITIONS. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
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"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 any Eligible Securities Depository 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, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in section 2(a)(5)
of the 0000 Xxx) meeting the requirements of a custodian under section 17(f) of
the 1940 Act; the term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"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 as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.
"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.
SECTION 3.2 STATE STREET AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO STATE STREET AS FOREIGN CUSTODY MANAGER. Fund, by
resolution adopted by its Board, hereby delegates to State Street,
subject to section (b) of Rule 17f-5, the responsibilities set forth in
this Section 3.2 with respect to Foreign Assets held outside the United
States, and State Street hereby accepts such delegation as Foreign
Custody Manager with respect to the Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below
only with respect to the countries and custody arrangements for each
such country listed on Schedule A, which list of countries may be
amended from time to time by Fund with the agreement of the Foreign
Custody Manager. The Foreign Custody Manager shall list on Schedule A
the Eligible Foreign Custodians selected by the Foreign Custody Manager
to maintain the assets of the Portfolios, which list of Eligible
Foreign Custodians may be amended from time to time in the sole
discretion of the Foreign Custody Manager. The Foreign Custody Manager
will provide amended versions of Schedule A in accordance with Section
3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions
to open an account or to place or maintain Foreign Assets in a country
listed on Schedule A, and the fulfillment by Fund, on behalf of the
Portfolios, of the applicable account opening requirements for such
country, the Foreign Custody Manager shall be deemed to have
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been delegated by the Board on behalf of the Portfolios responsibility
as Foreign Custody Manager with respect to that country and to have
accepted such delegation. Execution hereof by Fund shall be deemed to
be a Proper Instruction to open an account, or to place or maintain
Foreign Assets, in each country listed on Schedule A in which State
Street has previously placed or currently maintains Foreign Assets
pursuant to the terms of the contract governing the custody
arrangement. Following the receipt of Proper Instructions directing the
Foreign Custody Manager to close the account of a Portfolio with the
Eligible Foreign Custodian selected by the Foreign Custody Manager in a
designated country, the delegation by the Board on behalf of the
Portfolios to State Street as Foreign Custody Manager for that country
shall be deemed to have been withdrawn and State Street shall
immediately cease to be the Foreign Custody Manager of the Portfolios
with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written
notice to Fund. Thirty days (or such longer period to which the parties
agree in writing) after receipt of any such notice by Fund, State
Street shall have no further responsibility in its capacity as Foreign
Custody Manager to Fund with respect to the country as to which State
Street's acceptance of delegation is withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Section 3.2, the Foreign Custody Manager may place
and maintain the Foreign Assets in the care of the Eligible Foreign
Custodian selected by the Foreign Custody Manager in each country
listed on Schedule A, as amended from time to time. In performing its
delegated responsibilities as Foreign Custody Manager to place or
maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall 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 the factors
specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign
Custody Manager shall determine that the contract governing the foreign
custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule
17f-5(c)(2).
(c) MONITORING. In each case in which the Foreign Custody
Manager maintains Foreign Assets with an Eligible Foreign Custodian
selected by the Foreign Custody Manager, the Foreign Custody Manager
shall establish a system to monitor (i) the appropriateness of
maintaining the Foreign Assets with such Eligible Foreign Custodian and
(ii) the contract governing the custody arrangements established by the
Foreign Custody Manager with the Eligible Foreign Custodian. In the
event the Foreign Custody Manager determines that the custody
arrangements with an Eligible Foreign Custodian it has selected are no
longer appropriate, the Foreign Custody Manager shall notify the Board
in accordance with Section 3.2.5 hereunder.
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3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section 3.2, the Board shall be deemed to have considered and
determined 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 Foreign Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall 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 an amended Schedule A at the end of
the calendar quarter in which an amendment to such Schedule has
occurred. The Foreign Custody Manager shall make written reports
notifying the Board of any other material change in the foreign custody
arrangements of the Portfolios described in this Section 3.2 after the
occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In
performing the responsibilities delegated to it, the Foreign Custody
Manager 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.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody
Manager represents to Fund that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5. 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 hereto to
State Street as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF STATE STREET AS FOREIGN CUSTODY
MANAGER. The Board's delegation to State Street as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and
shall 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 (30) days after receipt
by the non-terminating party of such notice. The provisions of Section
3.2.2 hereof shall govern the delegation to and termination of State
Street as Foreign Custody Manager of the Portfolios with respect to
designated countries.
SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. State Street shall (a) provide Fund (or
its duly-authorized investment manager or investment advisor) with an
analysis of the custody risks associated with maintaining assets with
the Eligible Securities Depositories set forth on Schedule B hereto in
accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor
such risks on a continuing basis, and promptly notify Fund (or its
duly-authorized investment manager or investment advisor) of any
material change in such risks, in accordance with section (a)(1)(i)(B)
of Rule 17f-7.
3.3.2 STANDARD OF CARE. State Street agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in
Section 3.3.1.
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SECTION 4 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY HELD OUTSIDE
THE UNITED STATES
SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2 HOLDING SECURITIES. State Street shall identify on its
books as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. State Street may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to State Street for
the benefit of its customers, provided however, that (i) the records of State
Street with respect to foreign securities which are maintained in such account
shall identify those securities as belonging to the Portfolios and (ii), to the
extent permitted and customary in the market in which the account is maintained,
State Street shall require that securities so held by the Foreign Sub-Custodian
be held separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian.
SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by State Street or a Foreign Sub-Custodian, as
applicable, in such country. (Foreign Securities Systems and U.S. Securities
Systems are collectively referred to herein as "SECURITIES SYSTEMS").
SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN ASSETS. State Street or a Foreign
Sub-Custodian shall release and deliver foreign securities held by
State Street or such Foreign Sub-Custodian, or in a Foreign Securities
System account, only upon receipt of Proper Instructions on behalf of
the Applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
(i) upon the sale of such foreign securities for the Portfolio
in accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded, including,
without limitation: (A) delivery against reasonable expectation of
receiving later payment; or (B) in the case of a sale effected through
a Foreign Securities System, in accordance with the rules governing the
operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to
foreign securities;
(iii) to the depository agent in connection with tender or
other similar offers for foreign securities;
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(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the
name of State Street (or the name of the respective Foreign
Sub-Custodian or of any nominee of State Street or such Foreign
Sub-Custodian) or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face
amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market custom;
provided that in any such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery of
such securities prior to receiving payment for such securities except
as may arise from the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any Corporate
Actions or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign
securities, the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing
by the Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures
contracts, including delivery as original margin and variation margin
in accordance with applicable regulatory requirements;
(xi) in connection with the lending of foreign securities by
the Portfolio; and
(xii) for any other purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be delivered and
naming the person or persons to whom delivery of such securities shall
be made.
4.4.2. PAYMENT OF PORTFOLIO MONIES - FOREIGN SECURITIES. Upon receipt
of Proper Instructions on behalf of the applicable Portfolio, which may
be continuing instructions when deemed appropriate by the parties,
State Street shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out,
monies of a Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A) delivering
money to the seller thereof or to a dealer therefor (or an agent for
such seller or dealer) against reasonable expectation of receiving
later delivery of such foreign securities; or (B) in the case of a
purchase effected through a Foreign Securities System, in accordance
with the rules governing the operation of such Foreign Securities
System;
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(ii) in connection with the conversion, exchange or surrender
of foreign securities;
(iii) for the payment of any expense or liability of the
Portfolio, including but not limited to the following payments:
interest, taxes, investment advisory fees, transfer agency fees, fees
hereunder, legal fees, accounting fees, and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions executed
with or through State Street or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures
contracts, including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in
respect of securities sold short;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment and naming the
person or persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision hereof to the
contrary, settlement and payment for Foreign Assets received for the
account of the Portfolios and delivery of Foreign Assets maintained for
the account of the Portfolios may be effected in accordance with the
customary established securities trading or processing practices and
procedures in the country or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) with the expectation of receiving later payment
for such Foreign Assets from such purchaser or dealer.
State Street shall provide to the Board the information with respect to
custody and settlement practices in countries in which State Street
employs a Foreign Sub-Custodian described on Schedule C hereto at the
time or times set forth on such Schedule. State Street may revise
Schedule C from time to time, provided that no such revision shall
result in the Board being provided with substantively less information
than had been previously provided hereunder.
SECTION 4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of State Street or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. State Street or a Foreign Sub-Custodian shall
not be obligated to accept securities on behalf of a Portfolio under the terms
hereof unless the form of such securities and the manner in which they are
delivered are in accordance with reasonable market practice.
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SECTION 4.6 BANK ACCOUNTS. State Street shall identify on its books as
belonging to Fund cash (including cash denominated in foreign currencies)
deposited with State Street. Where State Street is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of State
Street, a bank account or bank accounts shall be opened and maintained outside
the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All
accounts referred to in this Section shall be subject only to draft or order by
State Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant to
the terms hereof to hold cash received by or from or for the account of the
Portfolio. Cash maintained on the books of State Street (including its branches,
subsidiaries and affiliates), regardless of currency denomination, is maintained
in bank accounts established under, and subject to the laws of, The Commonwealth
of Massachusetts.
SECTION 4.7 COLLECTION OF INCOME. State Street shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled and
shall credit such income, as collected, to the applicable Portfolio. In the
event that extraordinary measures are required to collect such income, Fund and
State Street shall consult as to such measures and as to the compensation and
expenses of State Street relating to such measures.
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities
held pursuant to this Xxxxxxx 0, Xxxxx Xxxxxx will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of Fund to exercise shareholder rights.
SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. State Street
shall transmit promptly to Fund written information with respect to Corporate
Actions received by State Street via the Foreign Sub-Custodians from issuers of
the foreign securities being held for the account of the Portfolios. With
respect to tender or exchange offers, State Street shall transmit promptly to
Fund written information with respect to materials so received by State Street
from issuers of the foreign securities whose tender or exchange is sought or
from the party (or its agents) making the tender or exchange offer. State Street
shall not be liable for any untimely exercise of any action, right or power in
connection with a Corporate Action unless (i) State Street or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) State Street receives Proper Instructions with regard to the
Corporate Action, and both (i) and (ii) occur at least three business days prior
to the date on which State Street is to take action to exercise such right or
power.
SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement
pursuant to which State Street employs a Foreign Sub-Custodian shall, to the
extent possible, require the Foreign Sub-Custodian to exercise reasonable care
in the performance of its duties, and to indemnify, and hold harmless, State
Street from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Sub-Custodian's performance of
such obligations. At Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of State Street with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that
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the Portfolios have not been made whole for any such loss, damage, cost,
expense, liability or claim.
SECTION 4.11 TAX LAW. State Street shall have no responsibility or
liability for any obligations now or hereafter imposed on Fund, the Portfolios
or State Street as custodian of the Portfolios by the tax law of the United
States or of any state or political subdivision thereof. It shall be the
responsibility of Fund to notify State Street of the obligations imposed on Fund
with respect to the Portfolios or State Street as custodian of the Portfolios by
the tax law of countries other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of State Street with regard to such tax law shall be to use
reasonable efforts to assist Fund with respect to any claim for exemption or
refund under the tax law of countries for which Fund has provided such
information.
SECTION 4.12 LIABILITY OF STATE STREET. State Street shall be liable
for the acts or omissions of a Foreign Sub-Custodian to the same extent as set
forth with respect to sub-custodians generally herein and, regardless of whether
assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign
Securities System, State Street shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism, or any other loss to the
extent that the Sub-Custodian has acted with reasonable care.
SECTION 5 PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES. State
Street shall receive from the distributor for the Shares or from the Transfer
Agent and deposit into the account of the appropriate Portfolio such payments as
are received for Shares thereof issued or sold from time to time by Fund. State
Street will provide timely notification to Fund on behalf of each such Portfolio
and the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose, State Street shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, State Street is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial bank designated
by the redeeming shareholders. In connection with the redemption or repurchase
of Shares, State Street shall honor checks drawn on State Street by a holder of
Shares, which checks have been furnished by Fund to the holder of Shares, when
presented to State Street in accordance with such procedures and controls as are
mutually agreed upon from time to time between Fund and State Street.
SECTION 6 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Agreement means a writing signed or initialed by one or more person or persons
as the Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if State Street reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Fund shall cause all oral
instructions to be confirmed in writing. If given pursuant to procedures to be
agreed upon by the parties, Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices provided that
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Fund and State Street agree to security procedures, including but not limited
to, the security procedures selected by Fund in the Funds Transfer Addendum
attached hereto. For purposes of this Section, Proper Instructions shall include
instructions received by State Street pursuant to any three-party agreement that
requires a segregated asset account in accordance with Section 2.9.
SECTION 7 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. State Street may in its
discretion, without express authority from Fund on behalf of each applicable
Portfolio: 1) surrender securities in temporary form for securities in
definitive form; 2) endorse for collection, in the name of the Portfolio,
checks, drafts and other negotiable instruments; and 3) in general, attend to
all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with the securities and
property of the Portfolio except as otherwise directed by the Board.
SECTION 8 EVIDENCE OF AUTHORITY. State Street shall be protected in acting upon
any instructions, notice, request, consent, certificate or other instrument or
paper believed by it to be genuine and to have been properly executed by or on
behalf of Fund. State Street may receive and accept a copy of a resolution
certified by the Secretary or an Assistant Secretary of Fund ("CERTIFIED
RESOLUTION") as conclusive evidence (a) of the authority of any person to act in
accordance with such resolution or (b) of any determination or of any action by
the Board as described in such resolution, and such resolution may be considered
as in full force and effect until receipt by State Street of written notice to
the contrary.
SECTION 9 DUTIES OF STATE STREET WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE
SECTION 9.1 ACCOUNTS AND RECORDS. State Street will prepare and
maintain, under the direction of and as interpreted by Fund, Fund's or
Portfolio's accountants and/or other advisors, in complete, accurate and current
form such accounts and records: (A) required to be maintained by Fund with
respect to portfolio transactions under the 1940 Act; (B) required as a basis
for calculation of each Portfolio's net asset value; and (C) as otherwise agreed
upon by the parties. Fund will advise State Street in writing of all applicable
record retention requirements, other than those set forth in the 1940 Act. State
Street will preserve such accounts and records in the manner and for the periods
prescribed in the 1940 Act or for such longer period as is agreed upon by the
parties. Fund will furnish, in writing or its electronic or digital equivalent,
accurate and timely information needed by State Street to complete such accounts
and records when such information is not readily available from generally
accepted securities industry services or publications. State Street shall, at
Fund's request, supply Fund with a tabulation of securities owned by a Portfolio
and held by State Street and shall, when requested to do so by Fund and for such
compensation as shall be agreed upon between Fund and State Street, include
certificate numbers in such tabulations.
SECTION 9.2 DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or
cause to be turned over to State Street all 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.
SECTION 9.3 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,
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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 but Fund will reimburse State Street for all reasonable 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.
SECTION 9.4 ADOPTION OF PROCEDURES. State Street and Fund may from time
to time adopt such 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 Fund's Prospectus, governing documents, 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
responsibilities or procedures hereunder.
SECTION 9.5 VALUATION OF ASSETS. State Street will value the assets of
each Portfolio in accordance with Proper Instructions utilizing the pricing
sources designated by Fund ("PRICING SOURCES") on the Price Source and
Methodology Authorization Matrix, incorporated herein by this reference. State
Street will assist with the shadow pricing of any money market Portfolios as
requested by Fund. If so directed, State Street shall also calculate daily net
income of a Portfolio as described in the prospectus and shall advise the Fund
and the Transfer Agent periodically of the division of such net income of its
various components.
SECTION 9.6 LIMITATION OF LIABILITY. So long as and to the extent that
it is in the excise of reasonable care, 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 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, including the accuracy of the prices quoted by
the Pricing Sources or for the information supplied by Fund to value the assets,
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.
SECTION 10 OPINION OF FUND'S INDEPENDENT ACCOUNTANT. State Street shall take all
reasonable action, as Fund on behalf of each applicable Portfolio may from time
to time request, to obtain from year to year favorable opinions from Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of Fund's Form N-1A, and Form N-SAR or other annual reports
to the SEC and with respect to any other requirements thereof.
SECTION 11 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. State Street shall
provide Fund, on behalf of each of the Portfolios at such times as Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in any Securities System, relating to
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the services provided by State Street hereunder; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required by Fund
to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 12 COMPENSATION OF STATE STREET. State Street shall be entitled to
reasonable compensation for its services and expenses as custodian and
recordkeeping agent, as agreed upon from time to time between Fund on behalf of
each applicable Portfolio and State Street.
SECTION 13 RESPONSIBILITY OF STATE STREET. So long as and to the extent that it
is in the exercise of reasonable care, State Street shall not be responsible for
the title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant hereto and shall be held harmless in
acting upon any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed by the proper party or
parties, including any futures commission merchant acting pursuant to the terms
of a three-party futures or options agreement. State Street shall be held to the
exercise of reasonable care in carrying out the provisions hereof, but shall be
kept indemnified by and shall be without liability to Fund for any action taken
or omitted by it in good faith without negligence, including, without
limitation, acting in accordance with any Proper Instruction. It shall be
entitled to rely on and may act upon advice of counsel on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to such
advice. State Street shall be without liability to Fund and the Portfolios for
any loss, liability, claim or expense resulting from or caused by anything which
is part of Country Risk (as defined in Section 3 hereof), including without
limitation nationalization, expropriation, currency restrictions, or acts of
war, revolution, riots or terrorism.
Except to the extent of State Street's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, State Street
shall be without liability to Fund for any loss, liability, claim or expense
resulting from or caused by; (i) events or circumstances beyond the reasonable
control of State Street or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts ("Force Majeure Events");
(ii) errors by Fund or its duly-authorized investment manager or investment
advisor in their instructions to State Street provided such instructions have
been in accordance with this Agreement; (iii) the insolvency of or acts or
omissions by a Securities System; (iv) any delay or failure of any broker, agent
or intermediary, central bank or other commercially prevalent payment or
clearing system to deliver to State Street's sub-custodian or agent securities
purchased or in the remittance or payment made in connection with securities
sold; (v) any delay or failure of any company, corporation, or other body in
charge of registering or transferring securities in the name of State Street,
Fund, State Street's sub-custodians, nominees or agents or any consequential
losses arising out of such delay or failure to transfer such securities
including non-receipt of bonus, dividends and rights and other accretions or
benefits; (vi) delays or inability to perform its duties due to any disorder in
market infrastructure with respect to any particular security or Securities
System; and (vii) any provision of any present or future law or regulation or
order of the United States of America, or any state thereof, or any other
country, or political subdivision thereof or of any court of competent
jurisdiction.
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Xxxxx Xxxxxx shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally herein.
If Fund on behalf of a Portfolio requires State Street to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of State Street, result in State Street or its
nominee assigned to Fund or the Portfolio being liable for the payment of money
or incurring liability of some other form, Fund on behalf of the Portfolio, as a
prerequisite to requiring State Street to take such action, shall provide
indemnity to State Street in an amount as State Street may reasonably require.
If Fund requires State Street, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that State Street or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from State Street's or
its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should Fund fail to repay State Street
promptly, State Street shall be entitled to utilize available cash and to
dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
In no event shall either party be liable for indirect, special or consequential
damages.
SECTION 14 EFFECTIVE PERIOD, TERMINATION AND AMENDMENT. This Agreement shall
become effective as of its execution, shall continue in full force and effect
until terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty (60) days after the date
of such delivery or mailing; provided, however, that Fund shall not amend or
terminate this Agreement in contravention of any applicable federal or state
regulations, or any provision of the governing documents, and further provided,
that Fund on behalf of one or more of the Portfolios may at any time by action
of its Board (i) substitute another bank or trust company for State Street by
giving notice as described above to State Street, or (ii) immediately terminate
this Agreement in the event of the appointment of a conservator or receiver for
State Street by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination hereof, Fund on behalf of each applicable Portfolio shall pay
to State Street such compensation as may be due as of the date of such
termination and shall likewise reimburse State Street for its costs, expenses
and disbursements.
SECTION 15 SUCCESSOR CUSTODIAN AND RECORDKEEPING AGENT. Upon termination of
State Street as recordkeeping agent, State Street shall, upon payment of all
sums due to it from Fund that are not in dispute, deliver all accounts and
records to the successor recordkeeping agent (or, if none, to Fund) at the
office of State Street.
Upon termination of State Street as Custodian, if a successor custodian for one
or more Portfolios shall be appointed by the Board, State Street shall deliver
to such successor custodian at the office of State Street, duly endorsed and in
the form for transfer, all securities of each
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applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, State Street shall, in like
manner, upon receipt of a Certified Resolution, deliver at the office of State
Street and transfer such securities, funds and other properties in accordance
with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to State Street on or before the
date when such termination shall become effective, then State Street shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by State Street on behalf of each
applicable Portfolio and all instruments held by State Street relative thereto
and all other property held by it hereunder on behalf of each applicable
Portfolio, and to transfer to an account of such successor custodian all of the
securities of each such Portfolio held in any Securities System. Thereafter,
such bank or trust company shall be the successor of State Street hereunder.
In the event that accounts, records, securities, funds and other properties
remain in the possession of State Street after the date of termination hereof
owing to failure of Fund to procure the Certified Resolution to appoint a
successor custodian or otherwise, State Street shall be entitled to fair
compensation for its services during such period as State Street retains
possession of such accounts, records, securities, funds and other properties and
the provisions hereof relating to the duties and obligations of State Street
shall remain in full force and effect.
SECTION 16 CONFIDENTIAL INFORMATION The parties acknowledge that in the
course of performing their responsibilities under the Agreement, they may be
exposed to or acquire certain non-public information belonging to the other
party ("Confidential Information"). The parties agree to hold any such
Confidential Information in strict confidence and not to copy, reproduce, sell,
assign, license, market, transfer or otherwise dispose of, give or disclose such
Confidential Information to third parties or to use such Confidential
Information for any purposes whatsoever other than the provision of the services
under this Agreement and to advise each of its officers, directors, employees
and agents who may be exposed to such Confidential Information of their
obligations to keep such information confidential. It is understood that in the
event of a breach of this Section, damages may not be an adequate remedy and the
non-breaching party shall be entitled to injunctive relief to restrain any such
breach, threatened or actual.
The foregoing confidentiality obligations shall not apply to such Confidential
Information (1) which at the time of disclosure, is publicly available or in the
public knowledge; (2) which, after disclosure, lawfully becomes part of the
public knowledge through publication or otherwise, but through no fault of the
receiving party; (3) which the receiving party possesses at the time of
disclosure of such Confidential Information and which was not acquired, directly
or indirectly, from the disclosing party; (4) was acquired by the receiving
party from a third party which has the right to disclose such Confidential
Information; or (5) is independently developed by the receiving party without
reference to the Confidential Information.
SECTION 17 GENERAL
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SECTION 17.1 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with
the operation hereof, State Street and Fund on behalf of each of the Portfolios,
may from time to time agree on such provisions interpretive of or in addition to
the provisions hereof as may in their joint opinion be consistent with the
general tenor of this Agreement. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed hereto,
provided that no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the governing
documents. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 17.2 ADDITIONAL PORTFOLIOS. In the event that Fund establishes
one or more additional series with respect to which it desires to have State
Street render services as custodian and recordkeeping agent under the terms
hereof, it shall so notify State Street in writing, and if State Street agrees
to provide such services, such series shall become a Portfolio hereunder.
SECTION 17.3 MASSACHUSETTS LAW TO APPLY. This Agreement shall be
construed and the provisions thereof interpreted under and in accordance with
laws of The Commonwealth of Massachusetts.
SECTION 17.4 PRIOR AGREEMENTS. This Agreement supersedes and
terminates, as of the date hereof, all prior agreements between Fund on behalf
of each of the Portfolios and State Street relating to the custody or
recordkeeping of Fund's assets, as more specifically set forth on Exhibit A
hereto.
SECTION 17.5 NOTICES. Any notice, instruction or other instrument
required to be given hereunder may be delivered in person to the offices of the
parties as set forth herein during normal business hours or delivered prepaid
registered mail or by telex, cable or telecopy to the parties at the following
addresses or such other addresses as may be notified by any party from time to
time.
To Fund: To State Street:
ING PILGRIM INVESTMENTS STATE STREET BANK AND TRUST COMPANY
0000 X. Xxxxxxxxxx Xxxxx Xxxx 801 Pennsylvania Avenue
Scottsdale, Arizona 85258-2034 Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx Attention: Vice President, Custody
Telephone: 000-000-0000 Telephone: 000-000-0000
Telecopy: 000-000-0000 Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
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SECTION 17.6 REPRODUCTION OF DOCUMENTS. This Agreement and all
schedules, addenda, exhibits, attachments and amendments hereto may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto all/each agree that
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 17.7 REMOTE ACCESS SERVICES ADDENDUM. State Street and Fund
agree to be bound by the terms of the Remote Access Services Addendum attached
hereto.
SECTION 17.8 ASSIGNMENT. Except as otherwise set forth herein, this
Agreement may not be assigned by either party without the written consent of the
other.
SECTION 17.9 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute but one and the same Agreement.
SECTION 17.10 SEVERABILITY. If any provision in this Agreement 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.
SECTION 17.11 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2
requires banks which hold securities for the account of customers to respond to
requests by issuers of securities for the names, addresses and holdings of
beneficial owners of securities of that issuer held by the bank unless the
beneficial owner has expressly objected to disclosure of this information. In
order to comply with the rule, State Street needs Fund to indicate whether it
authorizes State Street to provide Fund's name, address, and share position to
requesting companies whose securities Fund owns. If Fund tells Xxxxx Xxxxxx
"xx", Xxxxx Xxxxxx will not provide this information to requesting companies. If
Fund tells State Street "yes" or does not check either "yes" or "no" below,
State Street is required by the rule to treat Fund as consenting to disclosure
of this information for all securities owned by Fund or any funds or accounts
established by Fund. For Fund's protection, the Rule prohibits the requesting
company from using Fund's name and address for any purpose other than corporate
communications. Please indicate below whether Fund consents or objects by
checking one of the alternatives below.
YES [ ] State Street is authorized to release Fund's name, address, and share
positions.
NO [X] State Street is not authorized to release Fund's name, address, and share
positions.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative
effective as of the day and year first written above.
ON BEHALF OF EACH OF THE FUNDS
SET FORTH ON EXHIBIT A HERETO FUND SIGNATURE ATTESTED TO BY:
By: ________________________________ By: ________________________________
Name: _______________________________ Name: ______________________________
Title: ______________________________ Title: *[secretary/ass't secretary]
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: _________________________________ By: ________________________________
Name: _______________________________ Name: ______________________________
Title: ______________________________ Title: _____________________________
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EXHIBIT A: LIST OF FUNDS
ENTITY NAME JURISDICTION
PILGRIM FINANCIAL SERVICES FUND, INC. Maryland corporation
PILGRIM EQUITY TRUST Massachusetts Business Trust
Pilgrim Biotechnology Fund*
Pilgrim MidCap Opportunities Fund
Pilgrim Principal Protection Fund
Pilgrim Principal Protection Fund II
ING SmallCap Value Fund*
ING MidCap Value Fund*
ING Principal Protection Fund III*
PILGRIM FUNDS TRUST Delaware Business Trust
Pilgrim High Yield Bond Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
ING Pilgrim Money Market Fund
PILGRIM GNMA INCOME FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM GROWTH OPPORTUNITIES FUND Massachusetts Business Trust
PILGRIM INVESTMENT FUNDS, INC. Maryland corporation
Pilgrim MagnaCap Fund
Pilgrim High Yield Fund
PILGRIM MAYFLOWER TRUST Massachusetts Business Trust
Pilgrim Growth + Value Fund
Pilgrim Research Enhanced Index Fund
PILGRIM MUTUAL FUNDS Delaware Trust
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund
Pilgrim SmallCap Growth Fund
Pilgrim Convertible Fund
Pilgrim Balanced Fund
Pilgrim High Yield Fund II
Pilgrim Strategic Income Fund
Pilgrim Money Market Fund
* This amended Exhibit A will be effective with respect to each of these Funds upon the effective date of the
initial Registration Statement with respect to each respective Fund.
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PILGRIM NATURAL RESOURCES TRUST
PILGRIM SENIOR INCOME FUND Delaware Business Trust
PILGRIM SMALLCAP OPPORTUNITIES FUND Massachusetts Business Trust
PILGRIM PRIME RATE TRUST Massachusetts business trust
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP MagnaCap Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim XX XxxXxx Opportunities Portfolio
Pilgrim VP Financial Services Portfolio
USLICO SERIES FUND Massachusetts Business Trust
Asset Allocation Portfolio
Bond Portfolio
Money Market Portfolio
Stock Portfolio
LEXINGTON MONEY MARKET TRUST
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