PROCEDURAL AGREEMENT
AMONG XXXXXXX XXXXX FUTURES INC.
THE PRUDENTIAL SERIES FUND, INC.
AND INVESTORS FIDUCIARY TRUST COMPANY AND TRUST CO.
WHEREAS the undersigned The Prudential Series Fund, Inc. on behalf of each
of the individual portfolios set forth on Schedule A annexed hereto ("Customer")
has opened a trading account with the undersigned Xxxxxxx Xxxxx Futures Inc.
("Merrill"), a registered futures commission merchant, for the purpose of
trading futures contracts traded on duly registered boards of trade, including
options on such futures contracts ("Contracts") through said firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and Merrill have entered into a Customer Agreement which requires Customer to
deposit as collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by the rules and regulations of the
Chicago Mercantile Exchange, the Chicago Board of Trade, the Commodity
Exchange, and such other exchanges on which Merrill may effect or cause to be
effected transactions as broker for Customer; and
WHEREAS Customer, Merrill, and the undersigned investors Fiduciary Trust
Company ("Custodian") have entered into a Safekeeping Agreement establishing an
account entitled "Xxxxxxx Xxxxx Futures Inc. Customer Funds for the benefit of
The Prudential Series Fund, Inc. on behalf of each of the individual portfolios
set forth on Schedule A annexed hereto (Customer Segregated Account)" pursuant
to which Custodian agrees to maintain a Safekeeping Account for the custody of
the Initial Margin which Customer is required to deposit and maintain; and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE, IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by the
exchange on which transactions are effected or caused to be effected by Merrill
as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement shall be controlling as to the rights of the parties in the
collateral deposited in the account.
2. The Initial Margin deposited and maintained in the Safekeeping Account,
created pursuant to the Safekeeping Agreement, shall be in form, as Customer
elects, of cash or (valued at the current market value less 50% of the principal
value thereof) or of eligible securities of the U.S. Government (valued at the
current market value less 10% of the principal value thereof) or of a
combination thereof (hereinafter "Eligible Securities"). Customer may substitute
Eligible Securities of equal or greater value upon prior approval by Merrill,
which approval shall not be unreasonably withheld. Upon receipt of such
substitute securities, Merrill agrees to give instructions to Custodian to
release from the Safekeeping Account cash or Eligible Securities of an equal
value, or such lesser amount as may be directed by Customer. Any separate
interest payments thereon shall be automatically credited by Custodian in
Federal funds to such demand deposit accounts designated in instructions from
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5(a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5(a), (b), and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short option positions shall be credited to Customer by reducing the amount of
the collateral required to be maintained in the Safekeeping Account.
3. With respect to the deposit of Initial Margin, Custodian shall be
directed by Customer's custodian order to segregate specified assets in the
Safekeeping Account, and Custodian shall promptly provide Merrill and Customer
with a written confirmation of each transfer into or out of the Safekeeping
Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and
Xxxxxxx'x verification of such withdrawal. Merrill shall, upon request of the
Customer, inform Customer of the amount of any excess Initial Margin in the
Safekeeping Account.
5. Merrill shall have access to the collateral only in accordance with the
following, and only at such times as conditions set forth hereafter are complied
with:
(a) If notice by Merrill is given to Customer that additional margin is
required by Merrill as broker for the Customer due to variation in the value of
one or more futures contracts held in the trading account or otherwise pursuant
to the Customer Agreement ("Variation Margin"), and such notice is given prior
to 11:30 A.M. New York time on a day on which the Customer is open for business,
which Variation Margin shall first have been satisfied from any amounts
currently credited to the Customer's trading account with Merrill in connection
with which the Variation Margin is required, the Customer
shall transfer to Merrill such Variation Margin not later than 4:00 P.M. on the
same. If notice by Merrill to the Customer is given of the need for Variation
Margin subsequent to 11:30 A.M. but prior to 4:00 P.M. New York time on a day on
which the Customer is open for business, the Customer shall provide such
Variation Margin to Merrill not later than 11:30 A.M. New York time on the next
succeeding day on which the Customer is open for business. Notice by Merrill to
the Customer of the receipt of Variation Margin shall be given promptly.
(b) If Merrill has not received the requested Variation Margin within
the time period as provided in Paragraph 5(a), notice by Merrill to Customer of
the failure to receive the Variation Margin shall be given immediately.
(c) If Merrill does not receive the Variation Margin in accordance with
Paragraph 5(a), Merrill may give (i) notice to Custodian of the Customer's
failure to provide Variation Margin and the amount of Variation Margin required;
and (ii) notice to the Customer and such notice has been given to Custodian.
Immediately upon receipt by Custodian of such notice but without prejudice to
any rights of Merrill hereunder, Custodian shall give notice to the Customer of
its receipt of such notice.
(d) In the event Customer has failed to transfer the required Variation
Margin to Merrill during the time period as provided in Xxxxxxxxx 0(x), Xxxxxxx
may give notice to Custodian of the Customer's failure to provide Variation
Margin and that all conditions precedent to Xxxxxxx'x right to direct
disposition hereunder have been satisfied, and may give instructions to
Custodian (i) to transfer Eligible Securities to Merrill, (ii) to sell at the
prevailing market price such of the collateral in the Safekeeping Account
relating to the trading account in which the Variation Margin is required, in
each case as necessary to provide for payment to Merrill of the amount of
Variation Margin that Merrill shall have specified in the notice, or (iii) with
respect to collateral in the form of cash, Merrill may give instructions to
Custodian to immediately transfer cash in the amount of the Variation Margin
that Merrill shall have specified in the notice from such Safekeeping Account to
the account of Merrill. Custodian shall immediately give notice to Customer of
its receipt of such instructions from Merrill and, upon taking any action
pursuant to such instructions, shall immediately give notice to Customer of such
action. Subject to the notice provisions of Paragraph 5 set forth above,
Custodian shall take instructions solely from Merrill with respect to the sale
of securities and/or the transfer of cash to Merrill. In the event that Merrill
receives Eligible Securities pursuant to this Paragraph 5(d), it shall have the
right to sell or otherwise dispose of such securities and shall remit to
Customer any proceeds of such sale or disposition in excess of the amount of
Variation Margin specified in instructions from Merrill to Custodian. Merrill
shall give consideration to any timely request by Customer with respect to
particular securities or other properties to be transferred or sold.
(e) Custodian shall retain in the Safekeeping Account any collateral in
excess of the amount of Variation Margin specified in instructions from Merrill
to Custodian including any proceeds from the sale of securities in excess of
such amount. Custodian shall give consideration to any timely request by
Customer with respect to particular securities in the principal market for such
securities or, in the event such principal market is closed, sell them in a
manner commercially reasonable for such securities.
6. Merrill shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by Merrill for Customer. At Customer's direction, Merrill shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct, Customer may give
such directions to Merrill by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of instructions from Merrill
regarding release of collateral.
8. Custodian's duties and responsibilities are as set forth in this
Agreement.
(a) Custodian shall not be liable or responsible for anything done or
omitted to be done by it in good faith and in the absence of negligence.
Custodian may rely and shall be protected in acting upon any notice,
instruction, or other communication which it reasonably believes to be genuine
and authorized by Merrill in accordance with this Agreement. As between Customer
and Custodian the terms of a Custodian Contract entered into between Customer
and Custodian ("Custodian Contract") shall apply with respect to any losses or
liabilities of such parties arising out of matters covered by this Agreement. As
between Custodian and Xxxxxxx, Xxxxxxx shall indemnify and hold Custodian
harmless with regard to any losses or liabilities of Custodian (including
counsel fees) imposed on or incurred by Custodian as a result of a legal claim
of Customer arising out of any action or omission of Custodian in good faith and
without negligence in accordance with any notice of instruction of Merrill
pursuant to Paragraph 5 of this Agreement; provided, however, that Custodian
notify Merrill of a Customer's claim at the time such claim is made. If any
property held in the Safekeeping Account shall be or becomes subject to any
lien, restraint, garnishment, injunction or other legal process of any nature,
Custodian shall be entitled to refrain from taking further action hereunder
until a court of competent jurisdiction permits Custodian to act. It is
understood that Custodian in purchasing, selling, delivering, or otherwise
dealing with the securities in the Safekeeping Account will be acting solely as
the agent of Customer and Merrill, and that Custodian will not be deemed to be
acting as, or to be making any warranties of, a broker. Custodian shall have no
duty to take any action other than herein specified, unless Custodian agrees to
do so in
writing, nor to commence or defend any legal action with respect to any property
held for the Safekeeping Account.
(b) Custodian shall have no duty to require any cash or securities to
be delivered to it or to determine that the amount and form of assets deposited
in the Safekeeping Account comply with any applicable requirements. Custodian
may hold the securities in the Safekeeping Account in bearer, nominee, book
entry or other form and in any depository or clearing corporation, with or
without indicating that the securities are held hereunder; provided, however,
that all securities held in the Safekeeping Account shall be identified on
Custodian's records as subject to this Agreement and shall be a form that
permits transfer without additional authoritarian or consent of Customer. This
Agreement supplements the Custodian Contract between Customer and Custodian and
to the extent any of the terms of this Agreement are inconsistent with the
Custodian Contract with respect to transactions on financial futures and options
on futures, this Agreement shall control.
9. Unless otherwise provided, all notices or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written copy
shall be provided to appropriate parties within a reasonable time after the
notice is given.
10. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
11. Any of the parties hereto may terminate this Agreement by thirty days
prior written notice to the other parties. Upon termination of the Agreement by
the Bank, all Customer assets held in the Customer Segregated Account shall be
transferred to a successor designated in writing by the Customer and the Broker.
12. This Agreement shall be construed ~ccording to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
13. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
14. No amendment of this Agreement shall be effective unless in writing and
signed by persons thereunto duly authorized.
15. Written communications hereunder shall be, except as otherwise required
hereunder, hand delivered or mailed first class postage prepaid, except that
written notice of termination shall be sent by certified mail addressed:
(a) If to Custodian, to:
Investors Fiduciary Trust Company
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Both
(b) If to Customer, to:
The Prudential Series Fund, Inc.
do Quantitative Investment Mgmt.
00 XXX Xxxxxxx, 0Xx Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Associate Manager of Operations
The Prudential Series Fund, Inc.
c/o PMFIM
000 Xxxxx Xx., 0xx Xxxxx
Xxxxxx, X.X. 00000
Attention: Associate Manager of Operations
(c) To Merrill, to:
World Financial Center, North
Seventh Floor
New York, New York
Attention: Xxx Xxxxxxx
(cc:) Xxxxxxx Xxxxx Futures
000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxx
THE PRUDENTIAL SERIES FUND, INC. ON BEHALF
OF EACH OF THE INDIVIDUAL PORTFOLIOS SET
FORTH ON SCHEDULE A ANNEXED HERETO
By: XXXXX XXXXXX
------------------------------------
Authorized Signature
Date: 9/9/97
----------------- Title: Comptroller
------------------------------------
on behalf of Xxxxxxx Xxxxx Futures Inc.
By: ILLEGIBLE
------------------------------------
Authorized Signature
Date: Title:
------------------------------------
Investors Fiduciary Trust Company
By: XXXX XXXXX
------------------------------------
Authorized Signature
Date: 9/22/97 Title: Vice President
----------------------------------
SAFEKEEPING AGREEMENT
The Prudential Series Fund, Inc. on behalf of each of the individual portfolios
set forth on Schedule A annexed hereto ("Depositor") and Xxxxxxx Xxxxx Futures
Inc. ("Merrill") have interest in the subject Safekeeping Account pursuant to a
certain Procedural Agreement among Merrill, Depositor, and investors Fiduciary
Trust Company ("Custodian") which Procedural Agreement governs over any
inconsistent provisions in this Safekeeping Agreement.
--------------------------------------------------------------------------------
Investors Fiduciary Trust Company
000 Xxxx 00xx Xxxxxx, 1 0xx Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Both
Ladies and Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
between Depositor and Custodian, and in the name of "Xxxxxxx Xxxxx Futures Inc.
Customer Funds for the benefit of each undersigned Depositor (Customer
Segregated Account)" for all monies and securities now or hereafter deposited
with and accepted by you for the initial margin in futures and option contracts
transactions, including any additional original margin requirements for
Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities in the account;
2. Dispose of the monies received from income collections, maturity,
redemption, sale, or other disposition of the securities pursuant to said
Procedural Agreement;
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to Merrill;
4. Provide a monthly list of securities to the Depositor and to
Merrill;
5. On request, confirm to Merrill and Depositor all account charges
and positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian.
The compensation of the Custodian for its services hereunder shall be
payable quarterly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for Merrill by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of Xxxxxxx Xxxxx Futures
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to the Depositor
pursuant to the Custodian Agreement, and to Merrill at the address shown below,
or at such other address as the Depositor or Merrill shall from time to time
direct.
The Depositor is not a foreign citizen; if this citizenship status change,
the Depositor will promptly notify the Custodian in writing.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time.
Accepted: Very truly yours,
The Prudential Series Fund, Inc. on behalf
of each of the individual portfolios set
forth on Schedule A annexed hereto
By: /s/ XXXX XXXXX By: /s/ XXXXX XXXXXX
---------------------------- --------------------------------------
Xxxx Xxxxx Xxxxx Xxxxxx
Acknowledged and Approved:
on behalf of
Xxxxxxx Xxxxx Futures Inc.
By: PLEASE SUPPLY
------------------------
Xxxxxxx Xxxxx Futures Inc.
World Financial Center, North, 7th floor
New York, New York 10281
Attention: Xxx Xxxxxxx
Dated:
---------------------------
ATTACHMENT A
------------
Investors Fiduciary Trust Company
000 Xxxx 00xx Xxxxxx, I 0xx Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Both
Gentlemen:
We refer to the account with your bank designated as "Xxxxxxx Xxxxx Futures Inc.
Customer Funds for the benefit of The Prudential Series Fund, Inc. on behalf of
each of the individual portfolios set forth on Schedule A annexed hereto
(Customer Segregated Account)" account number _____________ (the "Account"),
opened pursuant to a Safekeeping Agreement among The Prudential Series Fund,
Inc. on behalf of each of the individual portfolios set forth on Schedule A
annexed hereto ("Depositor"), Xxxxxxx Xxxxx Futures Inc. ("Merrill") and your
bank (Investors Fiduciary Trust Company), as custodian, dated __________.
The Account is being maintained by Merrill in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will from time to time deposit with you in
such Account monies, or obligations of the United States, general obligations of
any state or of any political subdivision thereof, or obligations fully
guaranteed as to principal and interest by the United States or other domestic
securities (collectively referred to as "securities"). All such securities,
monies, or other properties will be treated either as investments of our
commodity and commodity option customers' funds or as obligation belonging to
such customer. Under the provisions of the Commodity Exchange Act and
regulations promulgated thereunder, these deposits are required to be segregated
and treated as belonging to the customer.
You hereby agree that the obligations and records accounting for the monies and
securities held in the Account may be examined by an authorized employee of the
Commodity Futures Trading Commission.
Sincerely yours,
Xxxxxxx Xxxxx Futures Inc.
Xxxxx Xxxxxx
AGREED AND ACKNOWLEDGED:
Investors Fiduciary Trust Company
BY:
----------------------------------
Title:
--------------------------------
Dated:
--------------------------------
SCHEDULE A
o Conservative Balanced Portfolio
o Diversified Bond Portfolio
o Equity Income Portfolio
o Equity Portfolio
o Flexible Managed Portfolio
o Government Income Portfolio
o Natural Resources Portfolio
XXXXXXX XXXXX
INSTITUTIONAL FUTURES CUSTOMER AGREEMENT
---------------------------------------- -------------------------
CUSTOMER NEW
The Prudential Series Fund, Inc. on behalf of each ?????? portfolios set forth
on Schedule A annexed hereto
--------------------------------------------------------------------------------
Customer Full Legal Name
XXXXXXX XXXXXX (000) 000-0000
----------------------------- ----------------
Operations Contact Telephone Number
----------------------------------------------------
Assets under management with Advisor (if applicable)
Original confirmation: The Prudential Series Fund, Inc.
do Quantitative Investment Mgmt.
00 XXX Xxxx, 0xx Xxxxx
Xxxxx Xxxxx, X.X. 07078
Attention: Associate Manager of Operations
Duplicate Confirmation: The Prudential Series Fund, Inc.
c/o PMFIM
00 XXX Xxxx, 0xx Xxxxx
Xxxxx Xxxxx, X.X. 07078
Attention: Associate Manager of Operations
Additional Confirmation: Investors Fiduciary Trust Company
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Both
Additional Confirmation:
Xxxxxxx Xxxxx Futures Inc.
000 Xxxxx Xxxxxx, WFC Xxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx
