Exhibit 9
CUSTODY AGREEMENT
THIS AGREEMENT is made effective the ___ day of __________, 2000, by and
between STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company,
having its principal office and place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street"), and SENTINEL GROUP FUNDS, INC.,
SENTINEL PENNSYLVANIA TAX-FREE TRUST, AND SENTINEL VARIABLE PRODUCTS TRUST, each
having its principal office and place of business at National Life Drive,
Montpelier, Vermont 05604 (each a "Fund").
WHEREAS, Fund desires to appoint State Street as custodian of the assets
of the Fund's investment portfolio or portfolios (each a "Portfolio", and
collectively the "Portfolios"); and
WHEREAS, State Street is willing to accept such appointment on the terms
and conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and appoints
State Street as custodian of the investment securities, interests in loans
and other non-cash investment property, and monies at any time owned by
each of the Portfolios and delivered to State Street as custodian
hereunder ("Assets").
2. REPRESENTATIONS AND WARRANTIES.
A. Each Fund hereby represents, warrants and acknowledges to State
Street:
1. That it is a corporation or trust duly organized and existing
and in good standing under the laws of its state of
organization, and that it is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
2. That it has the requisite power and authority under applicable
law, its articles of incorporation and bylaws or its
declaration of trust, to enter into this Agreement; it has
taken all requisite action necessary to appoint State Street
as custodian for the Portfolios; this Agreement has been duly
executed and delivered by Fund; and this Agreement constitutes
a legal, valid and binding obligation of Fund, enforceable in
accordance with its terms.
B. State Street hereby represents, warrants and acknowledges to each
Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of
Massachusetts; and
2. That it has the requisite power and authority under applicable
law, its charter and its bylaws to enter into and perform this
Agreement; this Agreement has been duly executed and delivered
by State Street; and this Agreement constitutes a legal, valid
and binding obligation of State Street, enforceable in
accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. DELIVERY OF ASSETS. Except as permitted by the 1940 Act, Fund will
deliver or cause to be delivered to State Street on the effective
date hereof, or as soon thereafter as practicable, and from time to
time thereafter, all Assets acquired by, owned by or from time to
time coming into the possession of each of the Portfolios during the
term hereof. State Street has no responsibility or liability
whatsoever for or on account of assets not so delivered.
B. DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or cause to be
turned over to State Street all of each Portfolio's relevant
accounts and records needed by State Street to perform its duties
and responsibilities hereunder fully and properly. State Street may
rely conclusively on the completeness and correctness of such
accounts and records.
C. DELIVERY OF ASSETS TO THIRD PARTIES. State Street will receive
delivery of and keep safely the Assets of each Portfolio segregated
in a separate account. Upon delivery of any such Assets to a
subcustodian appointed pursuant hereto (hereinafter referred to as
"Subcustodian"), State Street will create and maintain records
identifying such Assets as belonging to the applicable Portfolio.
State Street is responsible for the safekeeping of the Assets only
until they have been transmitted to and received by other persons as
permitted under the terms hereof, except for Assets transmitted to
Subcustodians, for which State Street remains responsible to the
extent provided herein. State Street may participate directly or
indirectly through a subcustodian in the Depository Trust Company
(DTC), Treasury/Federal Reserve Book Entry System (Fed System),
Participant Trust Company (PTC) or other depository approved by Fund
(as such entities are defined at 17 CFR Section 270.17f-4(b)) (each
a "Depository" and collectively the "Depositories"). State Street
will be responsible to Fund for any loss, damage or expense suffered
or incurred by Fund resulting from the actions or omissions of any
Depository only to the same extent such Depository is responsible to
State Street.
D. REGISTRATION. State Street will at all times hold registered Assets
in the name of State Street as custodian, the applicable Portfolio,
or a nominee of either of them, unless specifically directed by
Instructions, as hereinafter defined, to hold such registered Assets
in so-called "street name;" provided that, in any event, State
Street will hold all such Assets in an account of State Street as
custodian containing only Assets of the applicable Portfolio, or
only assets held by State Street as a fiduciary or custodian for
customers; and provided further, that State Street's records at all
times will indicate the Portfolio or other customer for which such
Assets are held and the respective interests therein. If, however,
Fund directs State Street to maintain Assets in "street name",
notwithstanding anything contained herein to the contrary, State
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Street will be obligated only to utilize its best efforts to timely
collect income due the Portfolio on such Assets and to notify the
Portfolio of relevant information, such as maturities and pendency
of calls, and corporate actions including, without limitation, calls
for redemption, tender or exchange offers, declaration, record and
payment dates and amounts of any dividends or income,
reorganization, recapitalization, merger, consolidation, split-up of
shares, change of par value, or conversion ("Corporate Actions").
All Assets and the ownership thereof by Portfolio will at all times
be identifiable on the records of State Street. Fund agrees to hold
State Street and its nominee harmless for any liability as a
shareholder of record of securities held in custody.
E. EXCHANGE. Upon receipt of Instructions, State Street will exchange,
or cause to be exchanged, Assets held for the account of a Portfolio
for other Assets issued or paid in connection with any Corporate
Action or otherwise, and will deposit any such Assets in accordance
with the terms of any such Corporate Action. Without Instructions,
State Street is authorized to exchange Assets in temporary form for
Assets in definitive form, to effect an exchange of shares when the
par value of stock is changed, and, upon receiving payment therefor,
to surrender bonds or other Assets at maturity or when advised of
earlier call for redemption, except that State Street will receive
Instruction prior to surrendering any convertible security.
F. PURCHASES OF INVESTMENTS -- OTHER THAN OPTIONS AND FUTURES. On each
business day on which a Portfolio makes a purchase of Assets other
than options and futures, Fund will deliver to State Street
Instructions specifying with respect to each such purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer
through whom the purchase was made; and
9. Whether the Asset is to be received in certificated form or
via a specified Depository.
In accordance with such Instructions, State Street will pay for out
of monies held for the purchasing Portfolio, but only insofar as
such monies are available for such purpose, and receive the Assets
so purchased by or for the account of such Portfolio, except that
State Street, or a Subcustodian, may in its sole discretion advance
funds to such Portfolio which may result in an overdraft because the
monies held on behalf of such Portfolio are insufficient to pay the
total amount payable upon such purchase. Except as otherwise
instructed by Fund, State Street will make such payment only upon
receipt of Assets: (a) by State Street; (b) by a clearing
corporation of a national exchange of which State Street is a
member; or (c) by a Depository. Notwithstanding the foregoing, (i)
State Street may release funds to a Depository prior to the receipt
of advice from the Depository that the Assets underlying a
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repurchase agreement have been transferred by book-entry into the
account maintained with such Depository by State Street on behalf of
its customers; provided that State Street's instructions to the
Depository require that the Depository make payment of such funds
only upon transfer by book-entry of the Assets underlying the
repurchase agreement in such account; (ii) State Street may make
payment for time deposits, call account deposits, currency deposits
and other deposits, foreign exchange transactions, futures contracts
or options, before receipt of an advice or confirmation evidencing
said deposit or entry into such transaction; and (iii) State Street
may make, or cause a Subcustodian to make, payment for the purchase
of Assets the settlement of which occurs outside of the United
States of America in accordance with generally accepted local custom
and market practice.
G. SALES AND DELIVERIES OF INVESTMENTS -- OTHER THAN OPTIONS AND
FUTURES. On each business day on which a Portfolio makes a sale of
Assets other than options and futures, Fund will deliver to State
Street Instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes or
other expenses payable in connection with such sale;
8. The total amount to be received by the Portfolio upon such
sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
State Street will deliver or cause to be delivered the Assets thus
designated as sold for the account of the selling Portfolio as
specified in the Instructions. Except as otherwise instructed by
Fund, State Street will make such delivery upon receipt of: (a)
payment therefor in such form as is satisfactory to State Street;
(b) credit to the account of State Street with a clearing
corporation of a national securities exchange of which State Street
is a member; or (c) credit to the account maintained by State Street
on behalf of its customers with a Depository. Notwithstanding the
foregoing: (i) State Street will deliver Assets held in physical
form in accordance with "street delivery custom" to a broker or its
clearing agent; or (ii) State Street may make, or cause a
Subcustodian to make, delivery of Assets the settlement of which
occurs outside of the United States of America upon payment therefor
in accordance with generally accepted local custom and market
practice.
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H. PURCHASES OR SALES OF OPTIONS AND FUTURES. On each business day on
which a Portfolio makes a purchase or sale of the options and/or
futures listed below, Fund will deliver to State Street Instructions
specifying with respect to each such purchase or sale:
1. If applicable, the name of the Portfolio making such purchase
or sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom
the sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other applicable
settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and,
when available, the closing level, thereof;
b. The index level on the date the contract is entered
into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition to
Instructions, and if not already in the possession of
State Street, Fund will deliver a substantially complete
and executed custodial safekeeping account and
procedural agreement, incorporated herein by reference);
and
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f. The name and address of the futures commission merchant
through whom the sale or purchase was made, or other
applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. ASSETS PLEDGED OR LOANED. If specifically allowed for in the
prospectus of a Portfolio, and subject to such additional terms and
conditions as State Street may require:
1. Upon receipt of Instructions, State Street will release or
cause to be released Assets to the designated pledgee by way
of pledge or hypothecation to secure any loan incurred by a
Portfolio; provided, however, that State Street will release
Assets only upon payment to State Street of the monies
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made, further Assets
may be released or caused to be released for that purpose.
Upon receipt of Instructions, State Street will pay, but only
from funds available for such purpose, any such loan upon
redelivery to it of the Assets pledged or hypothecated
therefor and upon surrender of the note or notes evidencing
such loan.
2. Upon receipt of Instructions, State Street will release Assets
to the designated borrower; provided, however, that the Assets
will be released only upon deposit with State Street of full
cash collateral as specified in such Instructions, and that
the lending Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets. Upon receipt
of Instructions and the loaned Assets, State Street will
release the cash collateral to the borrower.
J. ROUTINE MATTERS. State Street will, in general, attend to all
routine and mechanical matters in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings with
the Assets except as may be otherwise provided herein or upon
Instruction from Fund.
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K. DEPOSIT ACCOUNTS. State Street will open and maintain one or more
special purpose deposit accounts for each Portfolio in the name of
State Street in such banks or trust companies (including, without
limitation, affiliates of State Street) as may be designated by it
or Fund in writing ("Accounts"), subject only to draft or order by
State Street upon receipt of Instructions. State Street will deposit
all monies received by State Street from or for the account of a
Portfolio in an Account maintained for such Portfolio. Subject to
Section 5.L hereof, State Street agrees:
1. To make Fed Funds available to the applicable Portfolio at
9:00 a.m., Kansas City time, on the second business day after
deposit of any check into an Account, in the amount of the
check;
2. To make funds available immediately upon a deposit made by
Federal Reserve wire; and
3. To make funds available on the next business day after deposit
of ACH wires.
L. INCOME AND OTHER PAYMENTS. State Street will:
1. Collect, claim and receive and deposit for the account of the
applicable Portfolio all income (including income from the
Accounts) and other payments which become due and payable on
or after the effective date hereof with respect to the Assets,
and credit the account of such Portfolio in accordance with
the schedule attached hereto as Exhibit A. If, for any reason,
a Portfolio is credited with income that is not subsequently
collected, State Street may reverse that credited amount. If
monies are collected after such reversal, State Street will
credit the Portfolio in that amount;
2. Execute ownership and other certificates and affidavits for
all federal, state and local tax purposes in connection with
the collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with (a) the collection, receipt and deposit of
such income and other payments, including but not limited to
the presentation for payment of all coupons and other income
items requiring presentation; and all other Assets which may
mature or be called, redeemed, retired or otherwise become
payable and regarding which State Street has actual knowledge,
or should reasonably be expected to have knowledge; and (b)
the endorsement for collection, in the name of Fund or a
Portfolio, of all checks, drafts or other negotiable
instruments.
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Xxxxx Xxxxxx, however, will not be required to institute suit
or take other extraordinary action to enforce collection
except upon receipt of Instructions and upon being indemnified
to its satisfaction against the costs and expenses of such
suit or other actions. State Street will receive, claim and
collect all stock dividends, rights and other similar items
and will deal with the same pursuant to Instructions.
M. PROXIES AND NOTICES. State Street will promptly deliver or mail (or
have delivered or mailed) to Fund all proxies properly signed, all
notices of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to Assets and will,
upon receipt of Instructions, execute and deliver or mail (or cause
its nominee to execute and deliver or mail) such proxies or other
authorizations as may be required. Except as provided herein or
pursuant to Instructions hereafter received by State Street, neither
it nor its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any proxy,
power of attorney, or other similar instrument voting any of such
Assets, or give any consent, approval or waiver with respect
thereto, or take any other similar action.
N. DISBURSEMENTS. State Street will pay or cause to be paid, insofar as
funds are available for the purpose, bills, statements and other
obligations of each Portfolio (including but not limited to
obligations in connection with the conversion, exchange or surrender
of Assets, interest charges, dividend disbursements, taxes,
management fees, custodian fees, legal fees, auditors' fees,
transfer agents' fees, brokerage commissions, compensation to
personnel, and other operating expenses of such Portfolio) pursuant
to Instructions setting forth the name of the person to whom payment
is to be made, and the amount and purpose of the payment.
O. DAILY STATEMENT OF ACCOUNTS. State Street will, within a reasonable
time, render to Fund a detailed statement of the amounts received or
paid and of Assets received or delivered for the account of each
Portfolio during each business day. State Street will maintain such
books and records as are necessary to enable it to render, from time
to time upon request by Fund, a detailed statement of the Assets.
State Street will permit, and upon Instruction will cause any
Subcustodian to permit, such persons as are authorized by Fund,
including Fund's independent public accountants, reasonable access
to such records or will provide reasonable confirmation of the
contents of such records, and if demanded, State Street will permit,
and will cause any Subcustodian to permit, federal and state
regulatory agencies to examine the Assets, books and records of the
Portfolios.
P. APPOINTMENT OF SUBCUSTODIANS. Notwithstanding any other provisions
hereof:
1. All or any of the Assets may be held in State Street's own
custody or in the custody of one or more other banks or trust
companies (including, without limitation, affiliates of State
Street) acting as Subcustodians as may be selected by State
Street. Any such Subcustodian selected by State Street must
have the qualifications required for a custodian under the
0000 Xxx. Xxxxx Xxxxxx will be responsible to the applicable
Portfolio for any loss, damage or expense suffered or incurred
by such Portfolio resulting from the actions or omissions of
any Subcustodians selected and appointed by State Street
(except Subcustodians appointed at the request of Fund and as
provided in Subsection 2 below) to the same extent State
Street would be responsible to Fund hereunder if it committed
the act or omission itself.
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2. Upon request of Fund, State Street will contract with other
Subcustodians reasonably acceptable to State Street for
purposes of (a) effecting third-party repurchase transactions
with banks, brokers, dealers, or other entities through the
use of a common custodian or subcustodian, or (b) providing
depository and clearing agency services with respect to
certain variable rate demand note securities, or (c) for other
reasonable purposes specified by Fund; provided, however, that
State Street will be responsible to Fund for any loss, damage
or expense suffered or incurred by Fund resulting from the
actions or omissions of any such Subcustodian only to the same
extent such Subcustodian is responsible to State Street. Fund
may review State Street's contracts with such Subcustodians.
3. Each Portfolio's foreign securities and cash or cash
equivalents, in amounts deemed by Fund to be reasonably
necessary to effect such Portfolio's foreign securities
transactions, may be held in the custody of one or more banks
or trust companies acting as Subcustodians ("Global
Subcustodian"), and thereafter, pursuant to a written contract
or contracts as approved by Fund, may be transferred to
accounts maintained by any such Global Subcustodian with
foreign custodians ("Foreign Custodian"). State Street will be
responsible to Fund for any loss, damage or expense suffered
or incurred by Fund resulting from the actions or omissions of
any Foreign Custodian only to the same extent such
subcustodian is liable to the Global Subcustodian.
Q. ACCOUNTS AND RECORDS PROPERTY OF FUND. State Street acknowledges
that all of the accounts and records maintained by State Street
pursuant hereto are the property of Fund, and will be made available
to Fund for inspection or reproduction within a reasonable period of
time, upon demand. State Street will assist Fund's independent
auditors, or upon the prior written approval of Fund, or upon
demand, any regulatory body, in any requested review of Fund's
accounts and records, provided that Fund will reimburse State Street
for all expenses and employee time invested in any such review
outside of routine and normal periodic reviews. Upon receipt from
Fund of the necessary information or instructions, State Street will
supply information from the books and records it maintains for Fund
that Fund may reasonably request for tax returns, questionnaires,
periodic reports to shareholders and such other reports and
information requests as Fund and State Street may agree upon from
time to time.
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R. ADOPTION OF PROCEDURES. State Street and Fund hereby adopt the Funds
Transfer Operating Guidelines attached hereto as Exhibit B. State
Street and Fund may from time to time adopt such additional
procedures as they agree upon, and State Street may conclusively
assume that no procedure approved or directed by Fund, Fund's or
Portfolio's accountants or other advisors conflicts with or violates
any requirements of the prospectus, articles of incorporation and
bylaws or declaration of trust, any applicable law, rule or
regulation, or any order, decree or agreement by which Fund may be
bound. Fund will be responsible for notifying State Street of any
changes in statutes, regulations, rules, requirements or policies
which may impact State Street's responsibilities or procedures under
this Agreement.
S. ADVANCES. Fund will pay on demand any advance of cash or securities
made by State Street or any Subcustodian, in its sole discretion,
for any purpose (including but not limited to securities
settlements, purchase or sale of foreign exchange or foreign
exchange contracts and assumed settlement) for the benefit of any
Portfolio. Any such cash advance will be subject to an overdraft
charge at the rate set forth in the then-current fee schedule from
the date advanced until the date repaid. As security for each such
advance, Fund hereby grants State Street and such Subcustodian a
lien on and security interest in all Assets at any time held for the
account of the applicable Portfolio, including without limitation
all Assets acquired with the amount advanced. Should Fund fail to
promptly repay the advance, State Street and such Subcustodian may
utilize available cash and dispose of such Portfolio's Assets
pursuant to applicable law to the extent necessary to obtain
reimbursement of the amount advanced and any related overdraft
charges.
T. EXERCISE OF RIGHTS; TENDER OFFERS. Upon receipt of Instructions,
State Street will: (1) deliver warrants, puts, calls, rights or
similar securities to the issuer or trustee thereof, or to the agent
of such issuer or trustee, for the purpose of exercise or sale,
provided that the new Assets, if any, are to be delivered to State
Street; and (2) deposit securities upon invitations for tenders
thereof, provided that the consideration for such securities is to
be paid or delivered to State Street or the tendered securities are
to be returned to State Street.
U. FUND SHARES.
1. Fund will deliver to State Street Instructions with respect to
the declaration and payment of any dividend or other
distribution on the shares of capital stock of a Portfolio
("Fund Shares") by a Portfolio. On the date specified in such
Instruction, State Street will pay out of the monies held for
the account of the Portfolio, insofar as it is available for
such purposes, and credit to the account of the Dividend
Disbursing Agent for the Portfolio, the amount specified in
such Instructions.
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2. Whenever Fund Shares are repurchased or redeemed by a
Portfolio, Portfolio or its agent will give State Street
Instructions regarding the aggregate dollar amount to be paid
for such shares. Upon receipt of such Instruction, State
Street will charge such aggregate dollar amount to the account
of the Portfolio and either deposit the same in the account
maintained for the purpose of paying for the repurchase or
redemption of Fund Shares or deliver the same in accordance
with such Instruction. State Street has no duty or
responsibility to determine that Fund Shares have been removed
from the proper shareholder accounts or that the proper number
of Fund Shares have been canceled and removed from the
shareholder records.
3. Whenever Fund Shares are purchased from Fund, Fund will
deposit or cause to be deposited with State Street the amount
received for such shares. State Street has no duty or
responsibility to determine that Fund Shares purchased from
Fund have been added to the proper shareholder account or that
the proper number of such shares have been added to the
shareholder records.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written (including
telecopied, telexed, or electronically transmitted) or oral
instructions which State Street reasonably believes were given by a
designated representative of Fund. Fund will deliver to State
Street, prior to delivery of any Assets to State Street and
thereafter from time to time as changes therein are necessary,
written Instructions naming one or more designated representatives
to give Instructions in the name and on behalf of Fund, which
Instructions may be received and accepted by State Street as
conclusive evidence of the authority of any designated
representative to act for Fund and may be considered to be in full
force and effect until receipt by State Street of notice to the
contrary. Unless such written Instructions delegating authority to
any person to give Instructions specifically limit such authority to
specific matters or require that the approval of anyone else will
first have been obtained, State Street will be under no obligation
to inquire into the right of such person, acting alone, to give any
Instructions whatsoever. If Fund fails to provide State Street any
such Instructions naming designated representatives, any
Instructions received by State Street from a person reasonably
believed to be an appropriate representative of Fund will constitute
valid and proper Instructions hereunder. The term "designated
representative" may include Fund's or a Portfolio's employees and
agents, including investment managers and their employees.
B. No later than the next business day immediately following each oral
Instruction, Fund will send State Street written confirmation of
such oral Instruction. At State Street's sole discretion, State
Street may record on tape, or otherwise, any oral Instruction
whether given in person or via telephone, each such recording
identifying the date and the time of the beginning and ending of
such oral Instruction.
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C. Fund will provide, upon State Street's request a certificate signed
by an officer or designated representative of Fund, as conclusive
proof of any fact or matter required to be ascertained from Fund
hereunder. Fund will also provide State Street Instructions with
respect to any matter concerning this Agreement requested by State
Street. If State Street reasonably believes that it could not
prudently act according to the Instructions, or the instruction or
advice of Fund's or a Portfolio's accountants or counsel, it may in
its discretion, with notice to Fund, not act according to such
Instructions.
5. LIMITATION OF LIABILITY OF STATE STREET. State Street is not responsible
or liable for, and Fund will indemnify and hold State Street harmless from
and against, any and all costs, expenses, losses, damages, charges,
counsel fees (including, without limitation, disbursements and the
allocable cost of in-house counsel), payments and liabilities which may be
asserted against or incurred by State Street or for which State Street may
be held to be liable, arising out of or attributable to:
A. State Street's action or failure to act pursuant hereto; provided
that State Street has acted in good faith and with reasonable care;
and provided further, that, in no event is State Street liable for
consequential, special, or punitive damages;
B. State Street's payment of money as requested by Fund, or the taking
of any action which might make it or its nominee liable for payment
of monies or in any other way; provided, however, that nothing
herein obligates State Street to take any such action or expend its
own monies except in its sole discretion;
C. State Street's action or failure to act hereunder upon any
Instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
properly executed, including any Instruction, communications, data
or other information received by State Street by means of the
Systems, as hereinafter defined, or any electronic system of
communication;
D. State Street's action or failure to act in good faith reliance on
the advice or opinion of counsel for Fund or of its own counsel with
respect to questions or matters of law, which advice or opinion may
be obtained by State Street at the expense of Fund, or on the
Instruction, advice or statements of any officer or employee of
Fund, or Fund's accountants or other authorized individuals, and
other persons believed by it in good faith to be expert in matters
upon which they are consulted;
E. The purchase or sale of any securities or foreign currency
positions. Without limiting the generality of the foregoing, State
Street is under no duty or obligation to inquire into:
1. The validity of the issue of any securities purchased by or
for any Portfolio, or the legality of the purchase thereof or
of foreign currency positions, or evidence of ownership
required by Fund to be received by State Street, or the
propriety of the decision to purchase or the amount paid
therefor;
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2. The legality of the sale of any securities or foreign currency
positions by or for any Portfolio, or the propriety of the
amount for which the same are sold; or
3. The legality of the issue or sale of any Fund Shares, or the
sufficiency of the amount to be received therefor, the
legality of the repurchase or redemption of any Fund Shares,
or the propriety of the amount to be paid therefor, or the
legality of the declaration of any dividend by Fund, or the
legality of the issue of any Fund Shares in payment of any
stock dividend.
F. Any error, omission, inaccuracy or other deficiency in any
Portfolio's accounts and records or other information provided to
State Street by or on behalf of a Portfolio, or the failure of Fund
to provide, or provide in a timely manner, any accounts, records, or
information needed by State Street to perform its duties hereunder;
G. Fund's refusal or failure to comply with the terms hereof (including
without limitation Fund's failure to pay or reimburse State Street
under Section 5 hereof), Fund's negligence or willful misconduct, or
the failure of any representation or warranty of Fund hereunder to
be and remain true and correct in all respects at all times;
H. The use or misuse, whether authorized or unauthorized, of the
Systems or any electronic system of communication used hereunder, by
Fund or by any person who acquires access to the Systems or such
other systems through the terminal device, passwords, access
instructions or other means of access to such Systems or such other
system which are utilized by, assigned to or otherwise made
available to Fund, except to the extent attributable to any
negligence or willful misconduct by State Street;
I. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the
payment of money to be received by State Street on behalf of a
Portfolio until actually received; provided, however, that State
Street will advise Fund promptly if it fails to receive any such
money in the ordinary course of business and will cooperate with
Fund toward the end that such money is received;
J. Except as provided in Section 3.P hereof, loss occasioned by the
acts, omissions, defaults or insolvency of any broker, bank, trust
company, securities system or any other person with whom State
Street may deal; and
K. The failure or delay in performance of its obligations hereunder, or
those of any entity for which it is responsible hereunder, arising
out of or caused, directly or indirectly, by circumstances beyond
the affected entity's reasonable control, including, without
limitation: any interruption, loss or malfunction of any utility,
transportation, computer (hardware or software) or communication
service; inability to obtain labor, material, equipment or
transportation, or a delay in mails; governmental or exchange
action, statute, ordinance, rulings, regulations or direction; war,
strike, riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornadoes, acts
of God or public enemy, revolutions, or insurrection.
13
6. COMPENSATION. In consideration for its services hereunder, Fund will pay
to State Street the compensation set forth in a separate fee schedule,
incorporated herein by reference, to be agreed to by Fund and State Street
from time to time, and, upon demand, reimbursement for State Street's cash
disbursements and reasonable out-of-pocket costs and expenses, including
attorney's fees and disbursements, incurred by State Street in connection
with the performance of services hereunder. State Street may charge such
compensation against monies held by it for the account of the Portfolios.
State Street will also be entitled to charge against any monies held by it
for the account of the Portfolios the amount of any loss, damage,
liability, advance, overdraft or expense for which it is entitled to
reimbursement from Fund, including but not limited to fees and expenses
due to State Street for other services provided to Fund by State Street.
State Street will be entitled to reimbursement by Fund for the losses,
damages, liabilities, advances, overdrafts and expenses of Subcustodians
only to the extent that (a) State Street would have been entitled to
reimbursement hereunder if it had incurred the same itself directly, and
(b) State Street is obligated to reimburse the Subcustodian therefor.
7. TERM AND TERMINATION. Either Fund or State Street may terminate this
Agreement by notice in writing, delivered or mailed, postage prepaid, to
the other party and received not less than ninety (90) days prior to the
date upon which such termination will take effect. Upon termination
hereof:
A. Fund will pay State Street its fees and compensation due hereunder
and its reimbursable disbursements, costs and expenses paid or
incurred to such date;
B. Fund will designate a successor custodian by Instruction to State
Street by the termination date. In the event no such Instruction has
been delivered to State Street on or before the date when such
termination becomes effective, then State Street may, at its option,
(i) choose as successor custodian a bank or trust company meeting
the qualifications for custodian set forth in the 1940 Act and
having not less than Two Million Dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last
published report, or (ii) apply to a court of competent jurisdiction
for the appointment of a successor or other proper relief, or take
any other lawful action under the circumstances; provided, however,
that Fund will reimburse State Street for its costs and expenses,
including reasonable attorney's fees, incurred in connection
therewith; and
C. State Street will, upon payment of all sums due to State Street from
Fund hereunder or otherwise, deliver all Assets, duly endorsed and
in form for transfer, to the successor custodian, or as specified by
the court, at State Street's office. State Street will co-operate in
effecting changes in book-entries at all Depositories. Upon delivery
to a successor or as specified by the court, State Street will have
no further obligations or liabilities hereunder. Thereafter such
successor will be the successor hereunder and will be entitled to
reasonable compensation for its services.
14
In the event that Assets remain in the possession of State Street
after the date of termination hereof for any reason other than State
Street's failure to deliver the same, State Street is entitled to
compensation as provided in the then-current fee schedule for its
services during such period, and the provisions hereof relating to
the duties and obligations of State Street will remain in full force
and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at the address set forth above, or at such other address as Fund may
have designated to State Street in writing, will be deemed to have been
properly given to Fund hereunder. Notices, requests, Instructions and
other writings addressed to State Street at 000 Xxxxxxxxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxx 00000, Attention: Custody Department, or to such
other address as it may have designated to Fund in writing, will be deemed
to have been properly given to State Street hereunder.
9. THE SYSTEMS; CONFIDENTIALITY.
A. If State Street provides Fund and its designated investment
advisors, consultants or other third parties authorized by State
Street who agree to abide by the terms of this Agreement
("Authorized Designees") with access to the computerized investment
portfolio custody systems used by State Street ("Systems") on a
remote basis for the purpose of obtaining and analyzing reports and
information (the "Remote Access Services") or if State Street and
Fund agree to utilize any electronic system of communication, Fund
agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other
security procedures as may be issued from time to time by State
Street for use of the System and access to the Remote Access
Services. Fund agrees to advise State Street immediately in the
event that it learns or has reason to believe that any person to
whom Fund has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this
Agreement and will cooperate with State Street in seeking injunctive
or other equitable relief.
B. State Street may from time to time agree to make available to Fund
additional Systems. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include,
and this Agreement shall govern, the Fund's access to and use of any
additional System made available by State Street and/or accessed by
the Fund.
C. The System and Remote Access Services described herein and the
databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems,
software, knowhow, algorithms, programs, training aids, printed
materials, methods, books, records, files, documentation and other
information made available to Fund by State Street as part of the
Remote Access Services and through the use of the System and all
copyrights, patents, trade secrets and other proprietary rights of
State Street related thereto are the exclusive, valuable and
confidential property of State Street and its relevant licensors
(the "Proprietary Information"). Fund agrees on its behalf and on
behalf of its Authorized Designees to keep the Proprietary
Information confidential and to limit access to its employees and
Authorized Designees (under a similar duty of confidentiality) who
require access to the System for the purposes intended. In the event
of termination of this Agreement, Fund will return to State Street
all copies of documentation and other Proprietary Information in its
possession or in the possession of its Authorized Designees. The
foregoing shall not apply to Proprietary Information in the public
domain or required by law to be made public.
15
D. Fund agrees to use the Remote Access Services only in connection
with the proper purposes of this Agreement. Fund will not, and will
cause its employees and Authorized Designees not to, (i) permit any
third party to use the System or the Remote Access Services, (ii)
sell, rent, license or otherwise use the System or the Remote Access
Services in the operation of a service bureau or for any purpose
other than as expressly authorized under this Agreement, (iii) use
the System or the Remote Access Services for any fund, trust or
other investment vehicle without the prior written consent of State
Street, or (iv) allow or cause any information transmitted from
State Street's databases, including data from third party sources,
available through use of the System or the Remote Access Services,
to be redistributed or retransmitted for other than use for or on
behalf of Fund, as State Street's Customer.
E. Fund will not, and will cause its employees and Authorized Designees
not to, modify the System in any way, enhance or otherwise create
derivative works based upon the System, nor will Fund or its
Authorized Designees reverse engineer, decompile or otherwise
attempt to secure the source code for all or any part of the System.
F. Fund acknowledges that the disclosure of any Proprietary
Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing
irreparable injury to State Street inadequately compensable in
damages at law and that State Street shall be entitled to obtain
immediate injunctive relief against the breach or threatened breach
of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.
G. State Street represents and warrants that it is the owner of and has
the right to grant access to the System and to provide the Remote
Access Services contemplated herein. Because of the nature of
computer information technology and the necessity of relying upon
third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided
"AS IS", and Fund and its Authorized Designees shall be solely
responsible for the investment decisions, regulatory reports and
statements produced using the Remote Access Services. State Street
and its relevant licensors will not be liable to Fund or its
Authorized Designees for any direct or indirect, special,
incidental, punitive or consequential damages arising out of or in
any way connected with the System or the Remote Access Services, nor
shall either party be responsible for delays or nonperformance under
this Agreement arising out of any cause or event beyond such party's
control.
16
H. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, STATE STREET FOR
ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED
HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.
I. State Street will defend or, at its option, settle any claim or
action brought against Fund to the extent that it is based upon an
assertion that access to the System or use of the Remote Access
Services by Fund under this Agreement constitutes direct
infringement of any United States patent or copyright or
misappropriation of a trade secret, provided that Fund notifies
State Street promptly in writing of any such claim or proceeding and
cooperates with State Street in the defense of such claim or
proceeding. Should the System or the Remote Access Services or any
part thereof become, or in State Street's opinion be likely to
become, the subject of a claim of infringement or the like under the
patent or copyright or trade secret laws of the United States, State
Street shall have the right, at State Street's sole option, to (i)
procure for Fund the right to continue using the System or the
Remote Access Services, (ii) replace or modify the System or the
Remote Access Services so that the System or the Remote Access
Services becomes noninfringing, or (iii) terminate the Remote Access
Services without further obligation.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio, the
following provisions apply:
A. Each Portfolio will be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the context
otherwise requires, with respect to every transaction covered
hereby, every reference herein to Fund is deemed to relate solely to
the particular Portfolio to which such transaction relates. Under no
circumstances will the rights, obligations or remedies with respect
to a particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single document
to memorialize the separate agreement as to each Portfolio is
understood to be for clerical convenience only and will not
constitute any basis for joining the Portfolios for any reason.
B. Fund may appoint State Street as its custodian for additional
Portfolios from time to time by written notice, provided that State
Street consents to such addition. Rates or charges for each
additional Portfolio will be as agreed upon by State Street and Fund
in writing.
17
11. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights and
liabilities of the parties hereto will be governed by, the laws of
the Commonwealth of Massachusetts, without reference to the choice
of laws principles thereof.
B. All terms and provisions hereof will be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
C. The representations and warranties, the indemnifications extended
hereunder, and the provisions of Section 9 hereof are intended to
and will continue after and survive the expiration, termination or
cancellation hereof.
D. No provisions hereof may be amended or modified in any manner except
by a written agreement properly authorized and executed by each
party hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions hereof or to enforce any rights resulting from
any breach of any of the terms or conditions hereof, including the
payment of damages, will not be construed as a continuing or
permanent waiver of any such terms, conditions, rights or
privileges, but the same will continue and remain in full force and
effect as if no such forbearance or waiver had occurred. No waiver,
release or discharge of any party's rights hereunder will be
effective unless contained in a written instrument signed by the
party sought to be charged.
F. The captions herein are included for convenience of reference only,
and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts, each of
which is deemed an original but all of which together constitute one
and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be considered severable and will not be
affected thereby, and every remaining provision hereof will remain
in full force and effect and will remain enforceable to the fullest
extent permitted by applicable law.
I. The benefits of this Agreement may not be assigned by either party
nor may either party delegate all or a portion of its duties
hereunder without the prior written consent of the other party.
Notwithstanding the foregoing, Fund agrees that State Street may
delegate all or a portion of its duties to an affiliate of State
Street, provided that such delegation will not reduce the
obligations of State Street under this Agreement.
J. Neither the execution nor performance hereof will be deemed to
create a partnership or joint venture by and between State Street
and Fund or any Portfolio.
18
K. This Agreement shall supercede and replace the Custody Agreement by
and between Investors Fiduciary Trust Company and Sentinel Group
Funds, Inc. dated December 1, 1989 and the Custody Agreement by and
between Investors Fiduciary Trust Company and Sentinel Pennsylvania
Tax-Free Trust dated December 1, 1989. Investors Fiduciary Trust
Company assigned each of these agreements to State Street Bank and
Trust Company effective January 1, 2000. Except as specifically
provided herein, this Agreement does not in any way affect any other
agreements entered into among the parties hereto and any actions
taken or omitted by either party hereunder will not affect any
rights or obligations of the other party hereunder.
L. If Fund is a Trust, notice is hereby given that a copy of Fund's
Trust Agreement and all amendments thereto is on file with the
Secretary of State of the state of its organization; that this
Agreement has been executed on behalf of Fund by the undersigned
duly authorized representative of Fund in his/her capacity as such
and not individually; and that the obligations of this Agreement are
binding only upon the assets and property of Fund and not upon any
trustee, officer of shareholder of Fund individually.
19
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
STATE STREET BANK AND TRUST COMPANY SENTINEL GROUP FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------ ------------------------------
Title: Senior Vice President Title: Vice President & Treasurer
SENTINEL PENNSYLVANIA TAX-FREE TRUST
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President & Treasurer
SENTINEL VARIABLE PRODUCTS TRUST
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President & Treasurer
20
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
FOREIGN--Income will be credited contractually on pay day in the markets noted
with Contractual Income Policy. The markets noted with Actual income policy will
be credited income when it is received.
========================================================================================================
MARKET INCOME POLICY MARKET INCOME POLICY MARKET INCOME POLICY
--------------------------------------------------------------------------------------------------------
Argentina Actual Hong Kong Contractual Poland Actual
Australia Contractual Hungary Actual Portugal Contractual
Austria Contractual India Actual Russia Actual
Bahrain Actual Indonesia Actual Singapore Contractual
Bangladesh Actual Ireland Actual Slovak Republic Actual
Belgium Contractual Israel Actual South Africa Actual
Bermuda Actual Italy Contractual South Korea Actual
* Bolivia Actual Ivory Coast Actual Spain Contractual
Botswana Actual * Jamaica Actual Sri Lanka Actual
Brazil Actual Japan Contractual Swaziland Actual
Canada Contractual Jordan Actual Sweden Contractual
Chile Actual Kenya Actual Switzerland Contractual
China Actual Lebanon Actual Taiwan Actual
Colombia Actual Luxembourg Actual Thailand Actual
Cyprus Actual Malaysia Actual * Trinidad & Actual
Tobago
Czech Republic Actual Mauritius Actual * Tunisia Actual
Denmark Contractual Mexico Actual Turkey Actual
Ecuador Actual Morocco Actual UnitedKingdom Contractual
Egypt Actual Namibia Actual United States See Attached
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
Euro CDs Actual New Zealand Contractual Venezuela Actual
Finland Contractual Norway Contractual Zambia Actual
France Contractual Oman Actual Zimbabwe Actual
Germany Contractual Pakistan Actual
Ghana Actual Peru Actual
Greece Actual Philippines Actual
========================================================================================================
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed with Income
Policy of Xxxxxxxxxxx.
00
XXXXXX XXXXXX--
=============================================================================================
INCOME TYPE DTC FED PTC PHYSICAL
---------------------------------------------------------------------------------------------
Dividends Contractual N/A N/A Actual
Fixed Rate Interest Contractual Contractual N/A Actual
Variable Rate Interest Contractual Contractual N/A Actual
GNMA I N/A N/A Contractual PD +1 N/A
GNMA II N/A N/A Contractual PD *** N/A
Mortgages Actual Contractual Contractual Actual
Maturities Actual Contractual N/A Actual
---------------------------------------------------------------------------------------------
Exceptions to the above Contractual Income Policy include securities that
are:
o Involved in a trade whose settlement either failed, or is pending
over the record date, (excluding the United States);
o On loan under a self directed securities lending program other than
State Street's own vendor lending program;
o Known to be in a condition of default, or suspected to present a
risk of default or payment delay;
o In the asset categories, without limitation, of Private Placements,
Derivatives, Options, Futures, CMOs, and Zero Coupon Bonds.
o Securities whose amount of income and redemption cannot be
calculated in advance of payable date, or determined in advance of
actual collection, examples include ADRs;
o Payments received as the result of a corporate action, not limited
to, bond calls, mandatory or optional puts, and tender offers.
*** For GNMA II securities, if the 19th day of the month is a business
day, Payable/Distribution Date is the next business day. If the 19th is
not a business day, but the 20th is a business day, Payable/Distribution
date is the first business day after the 20th. If both the 19th and 20th
are not business days, Payable/Distribution will be the next business day
thereafter.
22
EXHIBIT B -- FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company and affiliates
("SSB") is authorized to promptly debit Client's account(s) upon the receipt of
a payment order in compliance with any of the Security Procedures chosen by the
Client, from those offered on the attached selection form (and any updated
selection forms hereafter executed by the Client), for funds transfers and in
the amount of money that SSB has been instructed to transfer. SSB is hereby
instructed to accept funds transfer instructions only via the delivery methods
and Security Procedures indicated on the attached selection form (and any
updated selection forms hereafter executed by the Client). The Client agrees
that the Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted by SSB
after being confirmed by any of the selected Security Procedures. The Client
also agrees to be bound by any other valid and authorized payment order accepted
by SSB. SSB shall execute payment orders in compliance with the selected
Security Procedures and with the Client's/Investment Manager's instructions on
the execution date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order specifies a
later time. SSB will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable to
execute any such payment order on the execution date, such payment order will be
deemed to have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB will also rely on any financial
institution identification numbers included in any payment order, regardless of
any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's sole judgment, to
exceed any applicable volume, aggregate dollar, network, time, credit or similar
limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB's reasonable efforts.
6. ERRORS: SSB shall assume no responsibility for failure to detect any
erroneous payment order provided that SSB complies with the payment order
instructions as received and SSB complies with the selected Security Procedures.
The Security Procedures are established for the purpose of authenticating
payment orders only and not for the detection of errors in payment orders.
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
the Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the Mid-America Payment Exchange or other similar body, SSB or its agent
will act as an Originating Depository Financial Institution and/or Receiving
Depository Financial Institution, as the case may be, with respect to such
entries. Credits given with respect to an ACH credit entry are provisional until
final settlement for such entry is received from the Federal Reserve Bank. If
such final settlement is not received, the Client agrees to promptly refund the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute
payment orders, and any payment order carried in whole or in part through
Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
23
SECURITY PROCEDURES SELECTION FORM
Please select at least two of the funds transfer security procedures indicated
below.
[ ] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions
that provides telecommunication services for its membership. Participation
is limited to securities brokers and dealers, clearing and depository
institutions, recognized exchanges for securities, and investment
management institutions. SWIFT provides a number of security features
through encryption and authentication to protect against unauthorized
access, loss or wrong delivery of messages, transmission errors, loss of
confidentiality and fraudulent changes to messages.
SELECTION OF THIS SECURITY PROCEDURE WOULD BE MOST APPROPRIATE FOR
EXISTING SWIFT MEMBERS.
[X] REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and SSB
and/or its agent. Security procedures include encryption and/or the use of
a test key by those individuals authorized as Automated Batch Verifiers or
a callback procedure to those individuals.
CLIENTS SELECTING THIS OPTION SHOULD HAVE AN EXISTING FACILITY FOR
COMPLETING CPU-CPU TRANSMISSIONS. THIS DELIVERY MECHANISM IS TYPICALLY
USED FOR HIGH-VOLUME BUSINESS SUCH AS SHAREHOLDER REDEMPTIONS AND DIVIDEND
PAYMENTS.
[X] AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the
initiation of payment (credit) or collection (debit) transactions through
the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. The transmission is sent from the
Client's or its agent's system to SSB's or its agent's system with
encryption.
[X] REPETITIVE WIRES
For situations where funds are transferred periodically from an existing
authorized account to the same payee (destination bank and account number)
and only the date and currency amount are variable, a repetitive wire may
be implemented. Repetitive wires will be subject to a $10 million limit.
If the payment order exceeds the $10 million limit, the instruction will
be confirmed by Telephone Confirmation (Call Back) or Test Key prior to
execution. Repetitive wire instructions must be reconfirmed annually.
Clients may establish Repetitive Wires by following the agreed upon
security procedures as described by Telephone Confirmation (Call Back) or
Test Key.
THIS ALTERNATIVE IS RECOMMENDED WHENEVER FUNDS ARE FREQUENTLY TRANSFERRED
BETWEEN THE SAME TWO ACCOUNTS. IF THIS OPTION IS SELECTED, CHOOSE EITHER
TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE
WHEN OVER $10 MILLION.
[X] STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the
dollar amount are variable. Clients may establish Standby Instructions by
following the agreed upon security procedures as described by Telephone
Confirmation (Call Back) or Test Key. Additional paperwork will be
required from insurance Clients using 1031 drawdowns.
THIS OPTION IS USED FOR TRANSACTIONS THAT INCLUDE BUT ARE NOT LIMITED TO
FOREIGN EXCHANGE CONTRACTS, TIME DEPOSITS AND TRI-PARTY REPURCHASE
AGREEMENTS. IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE
CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER $10
MILLION.
[X] TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will contact someone other than the originator at the
Client's location to authenticate the instruction.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE
THE CAPABILITY TO USE OTHER SECURITY PROCEDURES. PLEASE COMPLETE THE
TELEPHONE CONFIRMATION INSTRUCTIONS ATTACHED AS A SCHEDULE HERETO.
[X] TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide
test keys if this option is chosen. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will authenticate the test key provided with the
corresponding test key at SSB.
SELECTION OF THIS ALTERNATIVE IS APPROPRIATE FOR CLIENTS WHO DO NOT HAVE
THE CAPABILITY TO USE OTHER SECURITY PROCEDURES.
The individual signing below must be authorized to sign contract on behalf of
the clients named in Schedule A attached. The execution of payment orders under
the selected Security Procedures is governed by the Funds Transfer Operating
Guidelines, which are incorporated by reference.
EACH OF THE CLIENTS NAMED ON SCHEDULE A ATTACHED HERETO.
CLIENT
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Authorized Signature
Xxxxxx X. Xxxxxx
----------------------------
Type or Print Name
Vice President & Treasurer
----------------------------
Title
3/3/98
----------------------------
Date
24
SCHEDULE TO FUNDS TRANSFER OPERATING GUIDELINES
AND SECURITY PROCEDURES SELECTION FORM
CLIENT/INVESTMENT MANAGER: SENTINEL GROUP FUNDS, SENTINEL PENNSYLVANIA
TAX-FREE TRUST AND SENTINEL VARIABLE PRODUCTS
TRUST
Company Name
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT
Name Xxxx Xxxxx
Address National Life Drive
City/State/Zip Code Xxxxxxxxxx, XX 00000
Telephone Number 000-000-0000
Facsimile Number 000-000-0000
SWIFT Number
ALTERNATE CONTACT
Name Xxxxxx X. Xxxxxx
Address National Life Drive
City/State/Zip Code Xxxxxxxxxx, XX 00000
Telephone Number 000-000-0000
Facsimile Number 000-000-0000
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
XXXXXX X. XXXXXX VICE PRESIDENT & TREASURER /s/
-------------------
XXXXX X. XXXXXXX ASSISTANT VICE PRESIDENT & ASSISTANT /s/
TREASURER -------------------
XXXXXXXX XXXXX SENIOR PORTFOLIO ACCOUNTANT /s/
-------------------
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
DOLLAR LIMITATION
NAME CALLBACK PHONE NUMBER (IF ANY)
XXXXXX X. XXXXXX 000-000-0000
XXXXX X. XXXXXXX 000-000-0000
XXXXXXXX XXXXX 000-000-0000
25
