MUTUAL FUND CUSTODY AGREEMENT
PBHG Insurance Series Fund
FIRST UNION NATIONAL BANK
Table of Contents
Paragraph Page
1. Definitions 1
2. Appointment 3
3. Delivery of Documents 4
4. Delivery and Registration of the Property 4
5. Voting and Other Rights 4
6. Receipt and Disbursement of Money 5
7. Receipt and Delivery of Securities 6
8. Scope of Responsibilities as Foreign Custody Manager 6
9. Eligible Securities Depositories; Compliance with Rule 17f-7 10
10. Foreign Market Transactions 10
11. Pledge or Encumbrance of Securities or Cash 10
12. Segregated Account 10
13. Foreign Exchange 11
14. Lending of Securities 11
15. Overdrafts or Indebtedness 12
16. Use of Domestic Depository or the Book-Entry System 12
17. Instructions Consistent With The Declaration, etc 14
18. Transactions Not Requiring Instructions 15
19. Transactions Requiring Instructions 17
20. Purchase and Sale of Securities 18
21. Records 20
22. Cooperation with Accountants 20
23. Reports to Fund by Independent Public Accountants 20
24. Confidentiality 20
25. Equipment 21
26. Right to Receive Advice 21
27. Compensation 21
28. Representations 22
29. Performance of Duties and Standard of Care 22
30. Indemnification 23
31. Effective Period; Termination and Amendment 24
32. Successor Custodian 25
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33. Notices 25
34. Further Actions 25
35. Additional Portfolios 25
36. Miscellaneous 26
ATTACHMENT A Fees
ATTACHMENT B Authorized Persons
ATTACHMENT C Portfolios of the Fund
EXHIBIT A Provision of Additional Information
EXHIBIT B Eligible Securities Depositories
EXHIBIT C List of Foreign Markets
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MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of February 26, 2002, by and between PBHG
Insurance Series Fund, a Delaware Business Trust (the "Fund"), and FIRST UNION
NATIONAL BANK, a National Bank ("First Union").
1. Definitions.
"Authorized Person" means the Fund's President, Vice-President, Treasurer
and any other person, whether or not that person is an officer or employee of
the Fund, duly authorized by the Directors or Trustees of the Fund to give
Proper Instructions on behalf of the Fund and listed on Attachment B hereto,
which may be amended from time to time in writing.
"Board" means the board of trustees or board of directors, as applicable,
of the Fund.
"Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
"Business Day" shall mean any day on which First Union, the Book-Entry
System, and relevant Depositories are open for business.
"Country Risks" means the systemic risks arising from holding Foreign
Assets in a particular country, including those arising from a country's
financial infrastructure, prevailing custody and settlement practices;
expropriation, nationalization or other governmental actions; and laws
applicable to the safekeeping and recovery of assets held in custody in such
country.
"Depository" shall include the Book-Entry System, the Depository Trust
Company, any other domestic securities depository, book-entry system or clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees, and any other entity permitted to hold Securities under 1940 Act Rule
17f-4, and shall also mean any other registered clearing agency that acts as a
securities depository, its successor or successors, specially identified in a
certified copy of a resolution of the Fund's Directors or Trustees approving
deposits by First Union therein. First Union shall hold Securities through a
Depository only if (a) the Depository and any of its creditors may not assert
any right, charge, security interest, lien, encumbrance or other claim of any
kind to Securities except a claim of payment for their safe custody or
administration, and (b) beneficial ownership of Securities may be freely
transferred without the payment of money or value other than for safe custody or
administration.
"Eligible Foreign Custodian" means an Eligible Foreign Custodian as
defined in Rule 17f-5(a)(1) under the 1940 Act or any other entity that the SEC
qualifies as such by exemptive order, no-action relief, rule or other
appropriate SEC action.
"Eligible Securities Depository" means an Eligible Securities Depository
as defined in section (b)(1) of Rule 17f-7 under the 1940 Act or that has
otherwise been made exempt pursuant to an SEC exemptive order.
"First Union" shall include any office, branch or subsidiary of First
Union National Bank, and shall include any banking or trust institution which
acquires substantially all of the assets of First Union National Bank or into
which First Union National Bank is merged or consolidated.
"Foreign Assets" means any Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolio's
transactions in such investments.
"Foreign Custody Manager" means a Foreign Custody Manager as defined in
Rule 17f-5(a)(3) under the 1940 Act.
"Foreign Market" means each market so identified in Exhibit C hereto.
"Portfolio" means each separate series of shares offered by the Fund
representing interests in a separate portfolio of securities and other assets.
"Proper Instructions" shall mean any notices, instructions or other
instruments in writing First Union receives from an Authorized Person or from a
person First Union reasonably believes to be an Authorized Person by letter,
telex, facsimile transmission, First Union's on-line communication system, or
any other method whereby First Union is able to verify with a reasonable degree
of certainty the identity of the sender of the communications or the sender is
required to provide a password or other identification code. Oral instructions
will be considered Proper Instructions if First Union reasonably believes that
an Authorized Person has given the oral instructions. The Fund shall cause all
oral instructions to be confirmed in writing. Proper Instructions that conflict
with earlier Proper Instructions will supersede earlier Instructions unless
First Union has already acted in reliance on the earlier Instructions.
"Property" shall mean any and all Securities, cash, and other property of
the Fund which the Fund may from time to time deposit, or cause to be deposited,
with First Union or which First Union may from time to time hold for the Fund;
all income of any Securities or other property; all proceeds of the sales of any
Securities or other property; and all proceeds of the sale of securities issued
by the Fund, which First Union receives from time to time from or on behalf of
the Fund.
"Rule 17f-5" means ss.270.17(f)-5 under the 1940 Act, as amended from time
to time.
"Rule 17f-7" means ss.270.17(f)-7 under the 1940 Act, as amended from time
to time.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities" shall include, without limitation, any common stock and other
equity securities; bonds, debentures and other debt securities; forwards, swaps,
futures, derivatives, mortgages or other obligations; and any instruments
representing rights to receive, purchase, or subscribe for the same, or
representing any other rights or interests therein (whether represented by a
certificate or held in a Securities Depository, Eligible Foreign Custodian, or
Eligible Securities Depository).
"Securities Depository" means any securities depository as defined in Rule
17f-4(c).
"U.S. Bank" means a U.S. bank as defined in Rule 17f-5(a)(7) under the
1940 Act.
"1940 Act" means the Investment Company Act of 1940, as amended.
2. Appointment.
a. Appointment as Custodian. The Fund is registered as an open-end
management investment company under the 1940 Act, and the Fund desires to retain
First Union to serve as the Fund's custodian and First Union is willing to
furnish these services. The Fund hereby appoints First Union to act as custodian
of its Securities, cash and other Property on the terms set forth in this
Agreement. First Union accepts this appointment and agrees to furnish the
services set forth below for the compensation as provided in Paragraph 29 of
this Agreement.
b. Appointment as Foreign Custody Manager. The Fund hereby appoints First
Union as a Foreign Custody Manager to perform the responsibilities set forth in
Paragraph 8 with respect to Foreign Assets, and First Union hereby accepts such
appointment as a Foreign Custody Manager of the Fund.
3. Delivery of Documents. The Fund will promptly furnish to First Union copies,
properly certified or authenticated, of contracts, documents and other related
information that First Union may request or requires to properly discharge its
duties. These documents may include but are not limited to the following:
a. Resolutions of the Fund's Trustees authorizing the appointment of First
Union as custodian of the Property of the Fund and approving this Agreement;
b. Incumbency and signature certificates identifying and containing the
signatures of the Fund's Authorized Persons;
c. The Fund's most recent prospectus including all amendments and
supplements thereto (the "Prospectus").
The Fund will furnish First Union from time to time with copies of all
amendments of or
supplements to the foregoing, if any. The Fund also will furnish First Union
with a copy of the opinion of counsel for the Fund on the validity of the shares
of common stock or units of beneficial interest (the "Shares") of the Fund and
the status of the Shares under the 1933 Act, and under any other applicable
federal law or regulation.
4. Delivery and Registration of the Property. The Fund will deliver or cause to
be delivered to First Union all Property it owns, including cash received for
the issuance of its Shares, at any time during the period of this Agreement,
except for Securities and monies to be delivered to any subcustodian appointed
pursuant to Paragraph 7. First Union will not be responsible for Securities and
monies until First Union or any subcustodian actually receives them. All
Securities delivered to First Union or to any subcustodian, Eligible Foreign
Custodian, or Eligible Securities Depository (other than in bearer form) shall
be registered in the name of the Fund or in the name of a nominee of the Fund,
in the name of First Union or any nominee of First Union (with or without
indication of fiduciary status), in the name of any subcustodian or any nominee
of a subcustodian appointed pursuant to Paragraph 7, any Eligible Foreign
Custodian used pursuant to Paragraph 8, or any Eligible Securities Depository
used pursuant to Paragraph 9, or shall be properly endorsed and in form for
transfer satisfactory to First Union.
5. Voting and Other Rights.
a. The Fund shall exercise voting and other rights and powers for all
Securities, however registered. First Union's only duty shall be to mail for
delivery on the next Business Day to the Fund any documents received, including
proxy statements and offering circulars, with any proxies executed by the
nominee for Securities registered in a nominee name. First Union reserves the
right to provide any documents received, or parts thereof, in the language
received. The Fund acknowledges that in certain countries First Union may be
unable to vote individual proxies but be able only to vote proxies on a net
basis. First Union shall vote or cause proxies to be voted only as expressly
directed in writing pursuant to Proper Instructions of the Fund's Authorized
Person. In the absence of Proper Instructions, neither First Union nor any
subcustodian shall vote or cause proxies to be voted, and they shall expire
without liability to First Union. First Union will not advise the Fund or act
for the Fund in any legal proceedings, including bankruptcies, involving
Securities the Fund holds or previously held or the issuers of these Securities,
except as the Fund and First Union expressly agree upon in writing.
b. First Union shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of Securities
and expirations of rights in connection therewith and notices of exercise of
call and put options the Fund writes and the maturity of futures contracts the
Fund purchases or sells) First Union receives from issuers of the Securities the
Fund holds, or from an Eligible Foreign Custodian or Eligible Securities
Depository holding Foreign Assets of the Fund. For tender or exchange offers,
First Union shall transmit promptly by facsimile to the Fund all written
information First Union receives from issuers of the Securities whose tender or
exchange is sought and from the party (or his agents) making the tender or
exchange offer, or from an Eligible Foreign Custodian or Eligible Securities
Depository holding Foreign Assets of the Fund. If the Fund desires to take
action on any tender offer, exchange offer or any other similar transaction, the
Fund shall notify First Union at least three business days before the date on
which First Union is to take action [five
business days if the tender offer, exchange offer, or other similar transaction
involves a Foreign Asset] or upon the date the Fund first receives the
notification, if later. Absent First Union's failure to promptly transmit such
written information that it has received to the Fund, or absent First Union's
timely receipt of Proper Instructions, First Union shall not be liable for
failure to take any action relating to or to exercise any rights the Securities
confer.
c. First Union shall promptly notify the Fund of any rights or
discretionary actions or of the date or dates by when the rights must be
exercised or action must be taken provided that First Union has received, from
the issuer, from persons making a tender or exchange offer, or from an Eligible
Foreign Custodian or Eligible Securities Depository, or otherwise, timely notice
of rights, discretionary corporate action, or dates. Absent actual receipt of
this notice, First Union shall have no liability for failing to so notify the
Fund.
d. First Union shall retain shares with respect to tender offers for less
than 5% of outstanding shares at less than 99% of the current market value,
without obligation to provide notice of such offers.
6. Receipt and Disbursement of Money.
a. First Union shall open and maintain a custody account for the Fund (the
"Account") subject only to draft or order by First Union acting pursuant to the
terms of this Agreement, and shall hold in the Account, subject to the
provisions in this Paragraph 6, all cash it receives by or for the Fund, other
than cash the Fund maintains in a bank account established and used in
accordance with Rule 17f-3 under the 1940 Act. First Union shall make payments
of cash to, or for the account of, the Fund from cash only (i) for the purchase
of Securities against delivery of such Securities except as provided in
Paragraph 10; (ii) in the case of a purchase of Securities effected through a
Book-Entry System or Securities Depository, in accordance with the conditions
set forth in Paragraph 18; (iii) in the case of repurchase agreements entered
into between the Fund and First Union, or another bank, or a broker-dealer which
is a member of The National Association of Securities Dealers, Inc. ("NASD"),
either (a) against delivery of the Securities either in certificate form or
through an entry crediting First Union's account at the Federal Reserve Bank
with the Securities or (b) against delivery of the receipt evidencing the Fund's
purchase of Securities First Union owns along with written evidence of First
Union's agreement to repurchase the Securities from the Fund; (iv) for transfer
to a time deposit account of the Fund in any bank, whether domestic or foreign;
the transfer may be effected before receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions from the Fund; (v)
for the payment of dividends or other distributions on shares declared pursuant
to the governing documents of the Fund, or for the payment of interest, taxes,
administration, distribution or advisory fees or expenses which the Fund is to
bear under the terms of this Agreement, any Advisory Agreement, or any
distribution or administration agreement; (vi) for payments in connection with
the conversion, exchange or surrender of Securities the Fund owns or subscribes
to and First Union holds or is to deliver ; (vii) to a subcustodian pursuant to
Paragraph 7; (viii) for common expenses the Fund incurs in the ordinary course
of its business, including but not limited to printing and mailing expenses,
legal fees, accountants' fees, exchange fees; or (ix) for any other proper
purpose, but only upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board or of the Executive Committee of the
Fund signed by an officer of the Fund and certified by its Secretary or an
Assistant
Secretary, specifying the amount of the payment, setting forth the purpose for
which the payment is to be made, declaring the purpose to be a proper purpose,
and naming the person or persons to whom the payment is to be made.
b. First Union is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian for the
Fund.
7. Receipt and Delivery of Securities.
a. Except as provided in this Paragraph 7 and Paragraphs 8 and 9, First
Union shall hold and segregate (physically, where Securities are held in
certificate form) all Securities and non-cash Property it receives for the Fund.
First Union will hold or dispose of all Securities and non-cash Property for the
Fund pursuant to the terms of this Agreement. In the absence of Proper
Instructions accompanied by a certified resolution of the Fund's Board
authorizing the specific transaction, First Union shall have no power or
authority to withdraw, deliver, assign, hypothecate, pledge or otherwise dispose
of any Securities and other Property, except in accordance with this Agreement.
In no case may any director, trustee, officer, employee or agent of the Fund
withdraw any Securities. First Union may, at its own expense, employ
subcustodians for the receipt of certain non-Foreign Assets First Union is to
hold for the account of the Fund pursuant to this Agreement; provided that each
subcustodian has an aggregate capital, surplus and undivided profits, as shown
by its last published report, of not less than twenty million dollars
($20,000,000) and that such subcustodian agrees with First Union to comply with
all relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. First Union will be liable for acts or omissions of any subcustodian
to the same extent that First Union is liable to the Fund under this Agreement.
First Union shall employ subcustodians upon receipt of Proper Instructions, but
only in accordance with an applicable vote of the Board of the Fund.
b. When requested, First Union shall furnish the Fund with confirmations
and a summary of all transfers to or from the account of the Fund during said
day. Where Securities are transferred to the account of the Fund established at
a Securities Depository or Book-Entry System, First Union shall also by
book-entry or otherwise identify as belonging to the Fund (and a Portfolio) the
quantity of Securities in a fungible bulk of Securities registered in the name
of First Union (or its nominee) or shown in First Union's account on the books
of a Securities Depository or Book-Entry System. At least monthly and from time
to time, First Union shall furnish the Fund with a detailed statement of the
Property held for the Fund under this Agreement.
8. Scope of Responsibilities as Foreign Custody Manager.
a. Authorization. Subject to the terms and conditions herein, First Union
is hereby authorized to: (i) place and maintain Foreign Assets on behalf of the
Fund with Eligible Foreign Custodians pursuant to a written contract determined
appropriate by First Union in accordance with the terms and conditions herein
and (ii) withdraw Foreign Assets from Eligible Foreign Custodians in accordance
with the terms and conditions herein.
b. Selection. First Union shall place and maintain Foreign Assets in the
care of one or more Eligible Foreign Custodians. In performing its
responsibilities to place and maintain Foreign Assets with an Eligible Foreign
Custodian, First Union shall determine that the Eligible Foreign Custodian will
hold Foreign Assets in the exercise of reasonable care, based on the standards
applicable to custodians in the jurisdiction or market in which the Foreign
Assets will be held by that Eligible Foreign Custodian, after considering all
factors relevant to the safekeeping of such assets, including, without
limitation:
(i) the Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if
applicable), its methods of keeping custodial records, its
security and data protection practices, and its settlement
practices;
(ii) whether the Eligible Foreign Custodian has the financial
strength to provide reasonable care for Foreign Assets and to
protect Foreign Assets against the Eligible Foreign
Custodian's insolvency;
(iii) the Eligible Foreign Custodian's general reputation and
standing; and
(iv) whether the Fund will have jurisdiction over, and be able to
enforce judgments against, the Eligible Foreign Custodian in
the United States.
c. Contracts. First Union shall ensure that the Fund's foreign custody
arrangements with each Eligible Foreign Custodian are governed by a written
contract with such Eligible Foreign Custodian. First Union shall determine that
the written contract governing the foreign custody arrangements with each
Eligible Foreign Custodian that First Union selects will provide reasonable care
for Foreign Assets held by that Eligible Foreign Custodian. Each written
contract will include terms that provide:
(i) for indemnification and/or insurance arrangements that will
adequately protect the Fund against the risk of loss of the
Foreign Assets held in accordance with such contract;
(ii) that the Foreign Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor
of the Eligible Foreign Custodian or its creditors, except a
claim for the Eligible Foreign Custodian's services under the
contract or, in the case of cash deposits, liens or rights in
favor of creditors of such Eligible Foreign Custodian arising
under bankruptcy, insolvency or similar laws;
(iii) that beneficial ownership of the Foreign Assets will be freely
transferable without the payment of money or value, other than
payments for the Eligible Foreign Custodian's services under
the contract;
(iv) that the Eligible Foreign Custodian will maintain adequate
records identifying the Foreign Assets held under the contract
as belonging to a Portfolio or as being held by a third party
for the benefit of a Portfolio;
(v) that the Fund's independent public accountants will be given
access to those records or confirmation of the contents of
those records;
(vi) that the Fund will receive periodic reports with respect to
the safekeeping of the Foreign Assets, including, but not
limited to, notification of any transfer of the Foreign Assets
to or from the account of a Portfolio or a third party account
containing the Foreign Assets held for the benefit of a
Portfolio; and
(vii) that the Eligible Foreign Custodian will indemnify and hold
harmless First Union (or its agent) or the Fund from and
against any loss, expense, liability or claim incurred by
First Union (or its agent) or the Fund to the extent such
loss, expense, liability or claim arises from the Eligible
Foreign Custodian's negligence or willful misconduct.
or, in lieu of any or all of the terms set forth in (i) through (vi) above, such
other terms that First Union determines will provide, in their entirety, the
same or greater level of care and protection for the Foreign Assets as the
provisions set forth in (i) through (vi) above in their entirety.
d. Monitoring. First Union will establish and maintain a system to
monitor: (i) the appropriateness of maintaining Foreign Assets with each
Eligible Foreign Custodian; (ii) Material Changes to the Fund's foreign custody
arrangements, as defined in paragraph (f) below; and (iii) the performance of
the contracts described in subparagraph c. above (the "Monitoring System").
e. Withdrawing Fund Assets. In the event that a foreign custody
arrangement no longer meets the terms and conditions set forth in Rule 17f-5,
First Union will promptly notify the Fund and will then act in accordance with
the Fund's Proper Instructions with respect to the disposition of the affected
Foreign Assets. Under exigent circumstances, however, First Union is authorized
to withdraw Foreign Assets if, after first notifying the Fund, forty-eight (48)
hours has passed without receiving a response to the notification from an
Authorized Person.
f. Reporting Requirements. First Union shall notify the Board of the
placement of Foreign Assets with an Eligible Foreign Custodian and any Material
Changes in the Fund's foreign custody arrangements by providing a written report
to the Board at the end of each calendar quarter or at such times as the Fund's
trustees deem reasonable and appropriate. With respect to Material Changes,
First Union shall provide the Board with a written report promptly after the
occurrence of the Material Change. Material Changes" include, but are not
limited to: a decision to remove all Foreign Assets from a particular
subcustodian; any event that may adversely and materially affect an Eligible
Foreign Custodian's financial or operational strength; First Union's inability
to perform its duties in accordance with the standard of care under this
Paragraph 8; a change in control of an Eligible Foreign Custodian; the failure
of an Eligible Foreign Custodian to comply with the standards in the Guidelines,
the terms of Rule 17f-5, its contract governing the Fund's foreign custody
arrangements; any material change in any contract governing the Fund's foreign
custody arrangements; the failure of First Union or a foreign custody
arrangement to meet the standards in Rule 17f-5 or the Guidelines; any event
that may adversely affect First Union's ability to comply with the Guidelines or
Rule 17f-5; and a material change in any information provided to the Board
regarding First Union's expertise in foreign custody issues and risks, First
Union's use of third party experts to perform its foreign custody
responsibilities, the Board's ability to monitor First Union's performance,
First Union's financial strength or its ability to indemnify the Fund.
g. Provision of Information. First Union shall provide to the Fund (or its
investment adviser(s)) such information as is specified in Exhibit A hereto, as
may be amended from time to time by the parties. The Fund hereby acknowledges
that such information is solely designed to inform the Fund of market conditions
and procedures, but is not intended to influence the Fund's investment decisions
(or those of its investment adviser(s)). First Union will use reasonable care in
gathering such information. First Union agrees to promptly notify the Fund (or
its investment adviser(s)) at the time that First Union becomes aware of a
material change to the information provided or if First Union learns that any
information previously provided is incomplete or inaccurate. First Union will
provide to the Fund (or its investment adviser(s)) upon reasonable request a
written statement as may reasonably be required to document its compliance with
the terms of this Agreement, as well as information regarding the following
factors: (i) First Union's expertise in foreign custody issues and risks; (ii)
First Union's use of third party experts to perform its foreign custody
responsibilities; (iii) the Board's ability to monitor First Union's
performance; and (iv) First Union's financial strength and its ability to
indemnify the Fund if necessary. With respect to each Eligible Foreign Custodian
employed by the Fund under Paragraph 8.i below, First Union agrees to provide to
the Fund (or its investment adviser(s)) any information it possesses regarding
Country Risk or the risks associated with placing or maintaining Foreign Assets
with the Eligible Foreign Custodian.
h. Standard of Care as Foreign Custody Manager. In performing its
delegated responsibilities as the Fund's Foreign Custody Manager, First Union
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of a Portfolio's Foreign Assets under
the 1940 Act would exercise. In particular, regardless of whether assets are
maintained in the custody of an Eligible Foreign Custodian or an Eligible
Securities Depository, First Union shall be liable to the Fund for the acts or
omissions of an Eligible Foreign Custodian where that Eligible Foreign Custodian
has not acted with reasonable care.
i. Direction of Eligible Foreign Custodians. The Fund may direct First
Union to place and maintain Foreign Assets with a particular Eligible Foreign
Custodian. In such event, First Union will have no duties under this Paragraph 8
with respect to such arrangement, except those included under Paragraph 8.g and
those that it may undertake specifically in writing.
j. Best Customer. If at any time First Union is or becomes a party to an
agreement to serve as Foreign Custody Manager to an investment company that
provides for either: (i) a standard of care with respect to the selection of
Eligible Foreign Custodians in any jurisdiction higher than that set
forth in Paragraph 8.a., or (ii) a standard of care with respect to exercise of
First Union's duties other than that set forth in Paragraph 8.b., First Union
agrees to notify the Fund of this fact and to raise the applicable standard of
care hereunder to the standard specified in such other agreement.
k. Condition Precedent. As a condition precedent to First Union's
performance under this Paragraph 8, the Fund shall deliver to First Union a
certificate from the Fund's secretary containing the resolution of the Board
regarding the Board's determination that it is reasonable to rely on First Union
to perform the responsibilities delegated pursuant to this Agreement to First
Union as Foreign Custody Manager of the Fund.
l. Limitations. First Union shall have only such duties as are expressly
set forth herein. In no event shall First Union be liable for any Country Risks
associated with investments in a particular country.
m. Representations with respect to Rule 17f-5. First Union represents to
the Fund that it is a U.S. Bank.
9. Eligible Securities Depositories; Compliance with Rule 17f-7. First Union
shall provide an analysis of the custody risks associated with maintaining the
Fund's Foreign Assets with each Eligible Securities Depository prior to the
initial placement of the Fund's Foreign Assets at such Depository and at which
any Foreign Assets of the Fund are held or are expected to be held. First Union
shall monitor the custody risks associated with maintaining the Fund's Foreign
Assets at each such Eligible Securities Depository on a continuing basis and
shall promptly notify the Fund and its advisers of any material changes in such
risks. First Union shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in this Paragraph. Based on the
information available to it in the exercise of the foregoing standard of care,
First Union shall determine the eligibility under Rule 17f-7 of each Depository
before including it on Exhibit B hereto and shall promptly advise the Fund (and
its investment adviser(s)) if any Eligible Securities Depository ceases to be
eligible and will withdraw the Fund's foreign assets from the depository as soon
as reasonably practical. For purposes of this Paragraph 9, the Fund (and its
investment adviser(s)) shall be deemed to have considered the Country Risk as is
incurred by placing and maintaining Foreign Assets in each country in which each
such Eligible Securities Depository operates. First Union's responsibilities
under this Paragraph 9 shall not include, or be deemed to include, any
evaluation of Country Risks associated with investment in a particular country.
10. Foreign Market Transactions. The Fund agrees that all settlements of Foreign
Assets transactions shall be transacted in accordance with the local laws,
customs, market practices and procedures to which Eligible Foreign Custodians
and Eligible Securities Depositories are subject in each Foreign Market,
including, without limitation, delivering Foreign Assets to the purchaser,
dealer, or an agent for such purchaser or dealer, with the expectation of
receiving later payment for the Foreign Assets from the purchaser, dealer, or
agent. First Union shall provide a report of settlement practices in Foreign
Markets as described in Exhibit A.
11. Pledge or Encumbrance of Securities or Cash. Except as provided in this
Agreement, First
Union may not pledge, assign, hypothecate or otherwise encumber Securities or
cash in any Account without the Fund's prior written consent.
12. Segregated Account. First Union shall upon receipt of Proper Instructions
establish and maintain a segregated account or accounts for and on behalf of the
Fund, into which account or accounts may be transferred cash and/or Securities,
including Securities that First Union maintains in an account pursuant to
Paragraph 6: (i) in accordance with the provisions of any agreement among the
Fund, First Union and a broker-dealer registered under the Securities Exchange
Act of 1934 (the "Exchange Act") and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act) relating to
compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with Fund
transactions, (ii) for purposes of segregating cash or government securities in
connection with options the Fund purchases, sells or writes or commodity futures
contracts or options thereon that the Fund purchases or sells, (iii) for the
purposes of the Fund's compliance with the procedures set out in 1940 Act
Release No. 10666, or any subsequent release or releases of the SEC relating to
registered investment companies' maintenance of segregated accounts; and (iv)
for other proper corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Proper Instructions, a certified copy of a resolution
of the Board or of the Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, setting forth the purpose
or purposes of the segregated account and declaring the purposes to be proper
corporate purposes.
13. Foreign Exchange.
a. For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide First Union with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in the currency of the
Fund's home jurisdiction to purchase the necessary foreign currency, or (ii)
sufficient applicable foreign currency to settle the transaction. First Union
shall provide the Fund with immediately available funds, which result from the
actual settlement of all sale transactions each day, based upon advices First
Union receives from the Fund's Eligible Foreign Custodians and Eligible
Securities Depositories. Such funds shall be in the currency of the Fund's home
jurisdiction or such other currency as the Fund may specify to First Union.
b. Any foreign exchange transaction First Union effects in connection with
this Agreement may be entered with First Union acting as principal or otherwise
through customary banking channels. The Fund may issue standing Proper
Instructions with respect to foreign exchange transactions but First Union may
establish rules or limitations concerning any foreign exchange facility made
available to the Fund. The Fund shall bear all risks of investing in Securities
or holding cash denominated in a foreign currency. In particular (and except to
the extent that this paragraph is inconsistent with paragraphs 8 or 9), the Fund
shall bear the risks that (i) a transfer to, by or for the account of the Fund
of Securities or cash held outside the Fund's jurisdiction or denominated in a
currency other than its home jurisdiction, or (ii) the conversion of cash from
one currency into another, may be prohibited, limited, or be subject
to burdens or costs, because of (w) Eligible Securities Depository rules or
procedures, (x) exchange controls, (y) asset freezes, or (z) other laws, rules,
regulations or orders. First Union shall not be obligated to substitute another
currency for a currency (including a currency that is a component of a composite
currency unit such as the Euro) whose transferability, convertibility or
availability has been affected by such law, regulation, rule or procedure. First
Union shall not be liable to the Fund of any loss resulting from any of the
foregoing events.
14. Lending of Securities.
a. Promptly after the Fund or its agent lends Securities in the Fund's
account, the Fund shall deliver or cause to be delivered to First Union a
certificate specifying (a) the name of the issuer and the title of the
Securities; (b) the number of shares or principal amount loaned; (c) the date of
the loan and delivery; (d) the total amount to be delivered to First Union
against the loan of the Securities, including the amount of the cash collateral
and the premium, if any, separately identified; and (e) the name of the
broker-dealer or financial institution to which the loan was made. First Union
shall not lend Securities except as the Fund or its agent instructs. First Union
shall deliver Securities so designated to the broker-dealer or financial
institution to which the loan was made upon the receipt of the total amount
designated as to be delivered against the loan of Securities. First Union may
accept payment in connection with a delivery otherwise than through the
Book-Entry System or a Depository only in the form of a certified or bank
cashier's check payable to the order of the Fund or First Union drawn on New
York Clearing House funds and may deliver Securities in accordance with the
customs prevailing among dealers in Securities.
b. Promptly after each termination of a loan of Securities, the Fund shall
deliver to First Union a certificate specifying (a) the name of the issuer and
the title of the Securities to be returned; (b) the number of shares or
principal amount to be returned; (c) the date of termination; (d) the total
amount First Union is to deliver, including the amount of the cash collateral
less any offsetting credits as described in the certificate; (e) the name of the
broker-dealer or financial institution from which the Securities will be
returned; and (f) whether the return is to be effected through the Book-Entry
System or a Depository. First Union shall receive all Securities returned from a
broker-dealer or other financial institution to which the Securities were
loaned, and upon receipt thereof shall pay the total amount payable upon the
return of the Securities as set forth in the certificate. Securities returned to
First Union shall be held as they were before the loan.
15. Overdrafts or Indebtedness. If First Union in its sole discretion advances
funds in any currency hereunder or if there shall arise for whatever reason an
overdraft in a Fund (including, without limitation, overdrafts incurred in
connection with the settlement of securities transactions, funds transfers or
foreign exchange transactions) or if the Fund is for any other reason indebted
to First Union, the Fund agrees to repay First Union on demand the amount of the
advance, overdraft or indebtedness plus accrued interest at a rate First Union
ordinarily charges to its institutional custody customers in the relevant
currency. To secure repayment of the Fund's and each third party's obligations
to First Union hereunder, the Fund hereby pledges and grants to First Union a
continuing lien and security interest in, and right of set off against, all of
the Fund's right, title and interest in and to (a) all accounts in the Fund's
name and the securities, money and other property now or hereafter held in such
accounts (including the
proceeds thereof), (b) each account in respect of which, or for whose benefit
the advance, overdraft or indebtedness relates and the securities, money and
other property now or hereafter held in such account (including the proceeds
thereof), and (c) any other property at any time First Union holds for the
account of the Fund. In this regard, First Union shall be entitled to all the
rights and remedies of a pledgee and secured creditor under applicable laws,
rules or regulations then in effect.
16. Use of Domestic Depository or the Book-Entry System.
a. The Fund shall deliver to First Union a certified resolution of the
Directors or Trustees of the Fund approving, authorizing and instructing First
Union on a continuous and ongoing basis, until First Union actually receives
Proper Instructions to the contrary, (i) to deposit in a Depository or the
Book-Entry System all Securities of the Fund eligible for deposit therein and
(ii) to use a Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation, settlements of the Fund's purchases and sales of Securities, and
deliveries and returns of securities collateral in connection with borrowings.
Without limiting the generality of this use, it is agreed that the following
provisions shall apply thereto:
b. Securities and any cash of the Fund deposited in a Securities
Depository or Book-Entry System or subcustodian will at all times (1) be
represented in an account of First Union in the Securities Depository or
Book-Entry System (the "Account") and (2) be segregated from any assets and cash
First Union controls in other than a fiduciary or custodian capacity but may be
commingled with other assets held in these capacities. Securities and cash First
Union deposits in a Depository or Book-Entry System will be held subject to the
rules, terms and conditions of the Depository or Book-Entry System. Securities
and cash held through subcustodians shall be held subject to the terms and
conditions of First Union's agreements with the subcustodians. First Union shall
identify on its books and records the Securities and cash belonging to the Fund,
whether held directly or indirectly through Depositories, the Book-Entry System,
or subcustodians. First Union shall not be responsible for Securities or cash
until actually received. First Union will effect payment for Securities and
receive and deliver Securities in accordance with accepted industry practices as
set forth in (c) below, unless the Fund has given First Union Proper
Instructions to the contrary.
c. First Union shall pay for Securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities Depository or Book-Entry
System that the Securities have been transferred to the Fund, and (ii) the
making of an entry on the records of First Union to reflect the payment and
transfer for the account of the Fund. Upon receipt of Proper Instructions, First
Union shall transfer Securities sold for the account of the Fund upon (i)
receipt of advice from the Securities Depository or Book-Entry System that
payment for the Securities has been transferred to the Account, and (ii) the
making of an entry on the records of First Union to reflect the transfer and
payment for the account of the Fund. Copies of all advices from the Securities
Depository or Book-Entry System of transfers of Securities for the account of
the Fund shall identify the Fund, and First Union shall maintain these copies
for the Fund and provide them to the Fund at its request.
d. First Union shall provide the Fund with any report First Union obtains
on the Securities
Depository or Book-Entry System's accounting system, internal accounting
controls and procedures for safeguarding Securities deposited in the Securities
Depository or Book-Entry System.
e. All books and records First Union maintains that relate to the Fund's
participation in a Securities Depository or Book-Entry System will at all times
during First Union's regular business hours be open to the inspection of the
Fund's duly authorized employees or agents, and the Fund will be furnished with
all information in respect of the services rendered to it as it may require.
f. Notwithstanding anything to the contrary in this Agreement, First Union
shall be liable to the Fund for any loss or damage to the Fund resulting from
any gross negligence, misfeasance or misconduct of First Union or any of its
agents or of any of its or their employees in connection with its or their use
of the Securities Depository or Book-Entry Systems or from failure of First
Union or any agent to enforce effectively the rights it may have against the
Securities Depository or Book-Entry System; at the election of the Fund on a
case by case basis , it shall be entitled to be subrogated to the rights of
First Union for any claim against the Securities Depository or Book-Entry System
or any other person that First Union may have as a consequence of any loss or
damage if and to the extent that the Fund has not been made whole for any loss
or damage.
17. Instructions Consistent With The Declaration, etc.
a. Unless otherwise provided in this Agreement, First Union shall act only
upon Proper Instructions. First Union may assume that any Proper Instructions
received hereunder are not in any way inconsistent with any provision of the
Declaration or By-Laws of the Fund or any vote or resolution of the Fund's
Trustees, or any committee thereof. First Union shall be entitled to rely upon
any Proper Instructions it actually receives pursuant to this Agreement and
which it reasonably believes an Authorized Person has given. The Fund agrees
that First Union shall incur no liability in acting in good faith upon Proper
Instructions that First Union reasonably believes an Authorized Person has given
to First Union. The Fund agrees to forward to First Union Proper Instructions
confirming oral instructions by the close of business of the same day that the
oral instructions are given to First Union. However, the Fund agrees that where
First Union does not receive confirming Proper Instructions or receives contrary
Proper Instructions, the validity or enforceability of transactions the oral
instructions authorize and which First Union carries out shall not be affected.
b. In accordance with instructions from the Fund, as accepted industry
practice requires or as First Union may elect in effecting Proper Instructions,
First Union shall be deemed to make a loan to the Fund, payable on demand,
bearing interest at a rate it customarily charges for similar loans, when First
Union advances cash or other Property, arising from the purchase, sale,
redemption, transfer or other disposition of Property of the Fund, or in
connection with the disbursement of funds to any party, or in payment of fees,
expenses, claims or liabilities the Fund owes to First Union, or to any other
party that has secured judgment in a court of law against the Fund which creates
an overdraft in the accounts or over-delivery of Property.
c. The Fund agrees that test arrangements, authentication methods or other
security devices to be used for Proper Instructions which the Fund may give by
telephone, telex, TWX, facsimile
transmission, bank wire or through an electronic instruction system, shall be
processed in accordance with terms and conditions for the use of the
arrangements, methods or devices as First Union may put into effect and modify
from time to time. The Fund shall safeguard any test keys, identification codes
or other security devices which First Union makes available to the Fund and
agrees that the Fund shall be responsible for any loss, liability or damage
First Union or the Fund incurs as a result of First Union's acting in accordance
with instructions from any unauthorized person using the proper security device
unless the loss, liability or damage was incurred as a result of First Union's
gross negligence or willful misconduct. First Union may, but is not obligated
to, electronically record any instructions given by telephone and any other
telephone discussions about the Account.
18. Transactions Not Requiring Instructions. First Union is authorized to take
the following action without Instructions:
a. Collection of Income and Other Payments. First Union shall:
i. collect and receive on a timely basis for the account of the
Fund, all income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items, included or to
be included in the Property of the Fund, and promptly advise the Fund of the
receipt and shall credit the income, as collected, to the Fund. Without limiting
the generality of the foregoing, First Union shall detach and present for
payment all coupons and other income items requiring presentation as and when
they become due and shall collect interest when due on Securities held
hereunder. Income due the Fund on Securities loaned pursuant to the provisions
of Paragraph 16 shall be the responsibility of the Fund. First Union will have
no duty or responsibility in connection therewith, other than to provide the
Fund with information or data as may be necessary to assist the Fund in
arranging for the timely delivery to First Union of the income to which the Fund
is properly entitled. From time to time, First Union may elect, but shall not be
so obligated, to credit the Account with interest, dividends or principal
payments on payable or contractual settlement date, in anticipation of receiving
the same from a payor, central depository, broker or other agent the Fund or
First Union employs. Any such crediting and posting shall be at the Fund's sole
risk, and First Union shall be authorized to reverse any advance posting in the
event First Union does not receive good funds from any payor, central
depository, broker or agent of the Fund;
ii. endorse and deposit for collection in the name of the Fund,
checks, drafts, or other orders for the payment of money on the same day as
received;
iii. receive and hold for the account of the Fund all Securities the
Fund receives as a result of a stock dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement or distribution of rights
or similar securities issued with respect to any Securities of the Fund First
Union holds hereunder;
iv. present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or otherwise
become payable on the date the Securities become payable;
v. take any action which may be necessary and proper in connection
with the collection and receipt of the income and other payments and the
endorsement for collection of checks, drafts and other negotiable instruments;
vi. effect an exchange of the shares where the par value of stock is changed,
and to surrender Securities at maturity or when advised of an earlier call for
redemption or when Securities otherwise become available, against payment
therefor in accordance with accepted industry practice. The Fund understands
that First Union subscribes to one or more nationally recognized services that
provide information on calls for redemption of bonds or other corporate actions.
First Union shall transmit promptly to the Fund written information with respect
to materials received by First Union (or its agent) via Eligible Foreign
Custodians from issuers of the foreign securities being held for the Fund (such
as pendency of calls and maturities of foreign securities and expirations of
rights in connection therewith). With respect to tender or exchange offers on
foreign securities, First Union shall transmit promptly to the Fund written
information with respect to materials so received by First Union from issuers of
the foreign securities whose tender or exchange is sought or from the party (or
its agents) making the tender or exchange offer. First Union will use reasonable
care in facilitating the exercise of voting and other shareholder rights by the
Fund, subject always to the laws, regulations and practical constraints that may
exist in the country where such securities are issued. The Fund acknowledges
that local conditions, including lack of regulation, onerous procedural
obligations, lack of notice and other factors may have the effect of severely
limiting the ability of the Fund to exercise shareholder rights. Subject to the
foregoing acknowledgement and the standard of care to which First Union is held
under this Agreement, First Union shall not be liable for any untimely exercise
of any tender, exchange or other right or power in connection with foreign
securities or other property of the Fund at any time held by it unless First
Union receives Proper Instructions from the Fund with regard to the exercise of
any such right or power at least two New York business days before the date on
which First Union is to take action to exercise such right or power.
First Union shall have no duty to notify the Fund of any rights,
duties, limitations, conditions or other information set forth in any Security
(including mandatory or optional put, call and similar provisions), but First
Union shall forward to the Fund any notices or other documents subsequently
received in regard to any security. When fractional shares of stock of a
declaring corporation are received as a stock distribution, unless specifically
instructed to the contrary in writing, First Union is authorized to sell the
fraction received and credit the Fund's account. Unless specifically instructed
to the contrary in writing, First Union is authorized to exchange Securities in
bearer form for Securities in registered form. If the Fund owns Property that is
registered in the name of a nominee of First Union and the issuer of any such
Property calls the Property for partial redemption, First Union is authorized to
allot the called portion to the beneficial holders of the Property in a manner
it deems fair and equitable in its sole discretion;
vii. forward to the Fund copies of all information or documents that
it may receive from an issuer of Securities which, in the opinion of First
Union, are intended for the Fund as the beneficial owner of Securities; and
viii. execute, as First Union, any certificates of ownership,
affidavits, declarations or
other certificates for all foreign governments, federal and state tax purposes
in connection with the collection or receipt of income, bond and note coupons,
or other payments from Securities or in connection with transfers of Securities.
b. Miscellaneous Transactions. First Union is authorized to deliver or
cause to be delivered Property against payment or other consideration or written
receipt therefor in the following cases:
i. for examination by a broker selling for the Account of the Fund
in accordance with street delivery custom;
ii. for the exchange of interim receipts or temporary Securities for
definitive securities; and
iii. for transfer of Securities into the name of the Fund or First
Union or a nominee of either, or to the issuer thereof for exchange of
Securities for a different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing the same
interest rate, maturity date and call provisions, if any; provided that, in any
case, the new Securities are to be delivered to First Union.
19. Transactions Requiring Instructions. In addition to the actions requiring
Proper Instructions set forth in this Agreement, upon receipt of Proper
Instructions and not otherwise, First Union, directly or through the use of a
Depository or the Book-Entry System, shall:
a. Execute and deliver to the persons as may be designated in Proper
Instructions, proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities may be exercised;
b. Deliver any Securities held for the Fund against receipt of other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
c. Deliver any Securities held for the Fund to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
corporation, against receipt of certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to evidence delivery;
d. Make transfers or exchanges of the assets of the Fund and take such
other steps as shall be stated in the instructions to effectuate any duly
authorized plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund;
e. Release Securities belonging to the Fund to any bank or trust company
for the purpose of pledge or hypothecation to secure any loan the Fund incurs;
provided, however, that securities shall be released only upon payment to First
Union of the monies borrowed or upon receipt of adequate
collateral as the Fund and First Union agree, which may be in cash or
obligations issued by the U.S. government, its agencies, or instrumentalities,
except that in cases where additional collateral is required to secure a
borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay the loan upon redelivery to
it of the securities pledged or hypothecated therefor and upon surrender of the
note or notes evidencing the loan;
f. Deliver Securities in accordance with the provisions of any agreement
among the Fund, First Union and a broker-dealer registered under the Exchange
Act and a member of the NASD relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities exchange,
or of any similar organization or organizations, regarding escrow or other
arrangements in connection with Fund transactions;
g. Deliver Securities in accordance with the provisions of any agreement
among the Fund, First Union and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
Fund transactions;
h. Surrender, in connection with their exercise, warrants, rights or
similar Securities, provided that in each case, the new Securities and cash, if
any, are to be delivered to First Union;
i. Deliver Securities upon receipt of payment for any repurchase agreement
the Fund enters into;
j. Deliver Securities pursuant to any other proper corporate purpose, but
only upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant Secretary,
specifying the Securities to be delivered, setting forth the purpose for which
the delivery is to be made, declaring the purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of the Securities
shall be made; and
k. Deliver Securities held for the Fund pursuant to separate security
lending agreements concerning the lending of the Fund's Securities into which
the Fund may enter, from time to time.
20. Purchase and Sale of Securities.
a. Promptly after the investment adviser (or any sub-adviser) purchases
Securities, the Fund shall deliver to First Union (as custodian) Proper
Instructions specifying for each purchase: (a) the name of the issuer and the
title of the Securities, (b) the number of shares or the principal amount
purchased and accrued interest, if any, (c) the dates of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
the purchase, (f) the name of the person from whom or the broker through whom
the purchase was made and (g) the Portfolio of the Fund for which the purchase
was made. First Union shall upon receipt of Securities purchased by or for the
Fund pay out of the
monies held for the account of the Fund the total amount payable to the person
from whom or the broker through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in Proper Instructions.
b. Promptly after the investment adviser (or any sub-adviser) sells
Securities, the Fund shall deliver to First Union (as Custodian) Proper
Instructions, specifying for each sale: (a) the name of the issuer and the title
of the security, (b) the number of shares or principal amount sold, and accrued
interest, if any, (c) the dates of sale and settlement, (d) the sale price per
unit, (e) the total amount payable to the Fund upon sale, (f) the name of the
broker through whom or the person to whom the sale was made and (g) the
Portfolio of the Fund for which the sale was made. First Union shall deliver the
Securities upon receipt of the total amount payable to the Fund upon sale,
provided that the same conforms to the total amount payable as set forth in
Proper Instructions. Subject to the foregoing, First Union may accept payment in
any form as shall be satisfactory to it, and may deliver Securities and arrange
for payment in accordance with the customs prevailing among dealers in
Securities.
c. The Fund understands that when First Union is instructed to deliver
Securities against payment, delivery of the Securities and receipt of payment
therefor may not be completed simultaneously. The Fund assumes full
responsibility for all credit risks involved in connection with First Union's
delivery of Securities pursuant to instructions of the Fund.
d. Upon the Fund's Proper Instructions, First Union shall purchase or sell
Securities and is authorized to use any broker or agent in connection with these
transactions, but shall use affiliates of First Union only as the Fund directs.
First Union shall not be liable for the acts or omissions of any broker or agent
(except an affiliate of First Union). Upon the Fund's Proper Instructions (which
may include standing instructions), First Union shall also invest cash balances
in certificates of deposit, savings accounts or other similar instruments First
Union issues or in money market or other mutual funds for which First Union or
an affiliate may serve as investment adviser, administrator, custodian,
shareholder servicing agent, or other capacity notwithstanding that First Union
or its affiliate collects fees from these mutual funds for providing the
services.
e. Except as otherwise provided by law, a cash account (including
subdivisions of accounts maintained in different currencies) shall constitute
one single and indivisible Account. Consequently, First Union has the right,
among others, to transfer the balance of any subaccount of a cash account to any
other subaccount at any time and without prior notice.
f.(i) For puts and calls traded on securities exchanges, Nasdaq, or
over-the-counter, First Union shall take action as to put options and call
options the Fund purchases or sells (writes) regarding escrow or other
arrangements in accordance with the provisions of any agreement entered into
upon receipt of Proper Instructions among First Union, any broker-dealer that is
a member of the NASD, and, if necessary, the Fund, relating to compliance with
rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations.
(ii) Unless another agreement requires it to do so, First Union shall be
under no obligation or duty to see that the Fund has deposited or is maintaining
adequate margin, if required, with any
broker in connection with any option, nor shall First Union be under any
obligation or duty to present the option to the broker for exercise unless it
receives Proper Instructions from the Fund. First Union shall have no
responsibility for the legality of any put or call option sold on the Fund's
behalf, the propriety of any purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or withdrawn
from any account. First Union specifically, but not by way of limitation, shall
not be under any obligation or duty to: (x) periodically check with or notify
the Fund that the amount of collateral a broker holds is sufficient to protect
the broker or the Fund against any loss; (y) effect the return of any collateral
delivered to a broker; or (z) advise the Fund that any option it holds has
expired or is about to expire, subject tot he requirement of Paragraph 5(b) to
promptly transmit notices. These obligations and duties shall be the Fund's sole
responsibility.
(iii) For puts, calls, and futures traded on commodities exchanges, First
Union shall take action as to put options and call options the Fund purchases or
sells (writes) regarding escrow or other arrangements in accordance with the
provisions of any agreement entered into upon receipt of Proper Instructions
among First Union, any futures commission merchant registered under the
Commodity Exchange Act, and the Fund, relating to compliance with rules of the
Commodity Futures Trading Commission and/or any Contract Market, or of any
similar organization or organizations, regarding account deposits for the Fund's
transactions.
(iv) First Union's responsibility as to futures, puts, and calls traded on
commodities exchanges, any futures commission merchant account, and any account
of the Fund shall be limited as set forth in subparagraph (f)(ii) of this
Paragraph 18 as if the subparagraph referred to futures commission merchants
rather than brokers, and futures and puts and calls thereon instead of options.
21. Records. The books and records pertaining to the Fund that are in the
possession of First Union shall be the property of the Fund. First Union shall
prepare and maintain these books and records as the 1940 Act and other
applicable federal securities laws and rules and regulations require. The Fund
or the Fund's authorized representatives shall have access to First Union's
books and records pertaining to the Fund at all times during First Union's
normal business hours, and First Union shall surrender these books and records
to the Fund promptly upon request. Upon reasonable request of the Fund, First
Union shall provide copies of any books and records to the Fund or the Fund's
authorized representative at the Fund's expense.
22. Cooperation with Accountants. First Union shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to assure that the necessary
information is made available to the accountants for the expression of their
unqualified opinion, including but not limited to the opinion included in the
Fund's Form N-1A, Form N-SAR, and other reports to the SEC and for any other
requirement of the SEC.
23. Reports to Fund by Independent Public Accountants. First Union shall provide
the Fund, at such times as the Fund may reasonably require, with reports from
First Union's independent public accountants on the accounting system, internal
accounting controls and procedures for safeguarding Securities, futures
contracts and options on futures contracts, including Securities deposited
and/or maintained in a Securities Depository or Book-Entry System, relating to
the services First Union
provides under this Agreement. These reports shall be of sufficient scope and in
sufficient detail as the Fund may reasonably require to provide reasonable
assurance that the examination would disclose any material inadequacies and, if
there are no material inadequacies, the reports shall so state.
24. Confidentiality. First Union agrees on behalf of itself and its employees to
treat confidentially and as the proprietary information of the Fund all records
and other information related to the Fund and its prior, present or potential
Shareholders, and to the investment adviser and its prior, present or potential
customers, and not to use these records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to the Fund and the Fund's written approval. The Fund shall
not unreasonably withhold this approval, and may not withhold its approval where
First Union may be exposed to civil or criminal contempt proceedings for failure
to comply, when duly constituted authorities request First Union to divulge this
information, or when the Fund so requests. Nothing contained herein, however,
shall prohibit First Union from advertising or soliciting the public generally
for other products or services, regardless of whether the advertisement or
solicitation may include prior, present or potential shareholders of the Fund.
25. Equipment.
a. First Union represents and warrants that each and every commercial and
noncommercial hardware, software, and firmware used with any services provided
under this Agreement shall, at no additional costs to the Fund, be able to store
and process accurately any and all date and date-related data (including, but
not limited to processing leap year calculations and processing any other dates
with unique digit arrangements such as, by way of example, 9/9/99). These
representations and warranties shall be in effect so long as First Union
provides the services under this Agreement for the Fund's benefit.
b. First Union shall notify the Fund of any errors, omissions or
interruptions in, or delay or unavailability of First Union's ability to
safeguard and hold Securities and cash in accordance with this Agreement as
promptly as practicable, and proceed to correct the same as soon as is
reasonably possible at no less or additional expense to the Fund.
c. In the event of equipment failures beyond First Union's control, First
Union shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions but shall not have liability with respect
thereto. First Union shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision for
back-up emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
26. Right to Receive Advice.
a. If First Union shall be in doubt as to any action it may take or omit
to take, it may request, and shall receive, from the Fund clarification or
advice. If First Union shall be in doubt as to any question of law involved in
any action it may take or omit to take, it may request advice at its own cost
from counsel of its own choosing (who may be counsel for the Fund or First
Union, at the option of First Union). If First Union receives conflicting advice
from the Fund and from counsel of its choosing,
First Union shall be entitled to rely on and follow the advice of its counsel,
and shall be fully protected for anything it does or omits to do in good faith
in conformity with this advice.
b. First Union shall be protected in any action or inaction which it takes
or omits to take in reliance on any directions or advice received pursuant to
subparagraph (a) of this Paragraph 28 which First Union, after receipt of any
directions or advice, in good faith believes to be consistent with these
directions or advice. However, nothing in this Paragraph shall be construed as
imposing upon First Union any obligation (i) to seek directions or advice, or
(ii) to act in accordance with directions or advice when received, unless, under
the terms or another provision of this Agreement, the same is a condition to
First Union's properly taking or omitting to take action. Nothing in this
subparagraph shall excuse First Union when an action or omission on the part of
First Union constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties under this Agreement.
27. Compensation.
As compensation for the services described in this Agreement that First
Union shall provide during the term of this Agreement, the Fund will pay to
First Union (a) monthly fees as outlined in Attachment A, and (b) out-of-pocket
expenses, including but not limited to all costs associated with the conversion
of the Fund's Securities to First Union's systems hereunder and the transfer of
Securities and records kept in connection with this Agreement, reimbursement of
any taxes or other charges which may be imposed upon the Fund or its income and
fees, or on First Union in connection with any acquisition, holding, sale,
transfer, delivery, or receipt of Securities or cash under this Custody
Agreement (other than income or other taxes imposed upon First Union in
connection with its provision of the custodial services contemplated hereunder);
and expenses of third parties providing services to the Fund (other than
services of third parties as are already compensated as described in this
Agreement), including the services of legal counsel (other than as described in
Paragraph 28) and independent accountants, appraisers, and brokers. These fees
and charges will be payable quarterly in arrears.
28. Representations.
a. The Fund hereby represents to First Union that (i) this Agreement has
been duly authorized, executed and delivered by the Fund, constitutes a valid
and legally binding obligation of the Fund enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
the Fund prohibits the Fund's execution or performance under this Agreement.
First Union hereby represents to the Fund that (i) it is a U.S. bank with the
full power to carry on its businesses as now conducted, and to enter into this
Agreement and to perform its obligations hereunder; and (ii) this Agreement has
been duly authorized, executed and delivered by First Union, constitutes a valid
and legally binding obligation of First Union enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
First Union prohibits First Union's execution or performance of this Agreement;
and (iii) First Union has established, and agrees to maintain during the term of
this Agreement, the Monitoring System.
b. First Union hereby represents and warrants that each and every
commercial and noncommercial hardware, software, firmware, mechanical, or
electrical product ("Products") used, created, assembled, manufactured,
developed, or modified in connection with any goods or services offered or
provided under this Agreement shall, at no additional costs to the Fund, be able
to store and process accurately any and data reflected in the currency unit of
the European Monetary Union, the Euro, and related to the Euro (including, but
not limited to, calculating, comparing, storing, processing, recording, valuing,
recognizing, validating, presenting and sequencing). The Fund may, at no
additional cost, require First Union to demonstrate compliance and/or compliance
techniques and test procedures it intends to follow or evidence of compliance by
First Union and relevant third party vendors, consistent with the Euro related
representations, warranties and obligations contained herein. These
representations and warranties shall be in effect so long as the service(s) or
Product(s) provided under this Agreement are used by First Union or provided by
First Union for the benefit of the Fund.
29. Performance of Duties and Standard of Care.
a. Except as stated in Paragraphs 8 and 9 of this Agreement, in the
performance of its duties hereunder, First Union shall be obligated to exercise
care and diligence and act in good faith to ensure the accuracy and completeness
of all services performed under this Agreement.
b. First Union shall be under no duty to take any action on behalf of the
Fund except as specifically set forth herein or as First Union may specifically
agree to in writing.
c. First Union may enter into subcontracts, agreements and understandings
with affiliates, whenever and on any terms and conditions as it deems necessary
or appropriate to perform its services under this Agreement, consistent with the
1940 Act and other applicable law. No subcontract, agreement or understanding
shall discharge First Union from its obligations under this Agreement.
d. First Union shall not be obligated to execute any of the Fund's Proper
Instructions if First Union believes that to do so will or may contravene any
law or regulation, any relevant market practice, or First Union's general
practice in performing custody services. The Fund hereby agrees to hold First
Union harmless from loss, claims, liability or expense asserted against First
Union as a result of any contravention undertaken at the Fund's request.
e. Except as stated in Paragraphs 8 and 9 of this Agreement, First Union
shall be responsible for its own grossly negligent failure or that of any
subcustodian it shall appoint to perform its duties under this Agreement but to
the extent that duties, obligations and responsibilities are not expressly set
forth in this Agreement, First Union shall not be liable for any act or
commission that does not constitute willful misfeasance, bad faith, or gross
negligence on the part of First Union or any subcustodian it appoints or
reckless disregard of such duties, obligations and responsibilities. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, First Union in connection with its duties under this Agreement, so
long as and to the extent it is in the exercise of reasonable care, shall not be
under any duty or obligation to inquire into and shall not be liable for or in
respect of (i) the validity or invalidity or authority or lack thereof of any
advice, direction, notice or other instrument which conforms to the applicable
requirements of this Agreement, if any, and which First
Union reasonably believes to be genuine, (ii) the validity of the issue of any
Securities the Fund purchases or sells, the legality of the purchase or sale
thereof or the propriety of the amount paid or received therefor, (iii) the
legality of the issue or sale of any Shares, or the sufficiency of the amount to
be received therefor, (iv) the legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor, (v) the legality of the declaration
or payment of any dividend or distribution on Shares, or (vi) delays or errors
or loss of data occurring by reason of circumstances beyond First Union's
control, including acts of civil or military authority, acts of terrorism,
national emergencies, labor difficulties, fire, mechanical breakdown (except as
provided in Paragraph 23), flood or catastrophe, acts of God, insurrection, war,
riots, or failure of the mail, transportation systems, communication systems or
power supply.
f. The Fund assumes full responsibility for insuring that the contents of
each Registration Statement of the Fund complies with all applicable
requirements of the 1933 Act, the 1940 Act, and any laws, rules and regulations
of governmental authorities having jurisdiction.
30. Indemnification. The Fund, as sole owner of the Property, agrees to
indemnify and hold harmless First Union and its nominees from all taxes,
charges, assessments, claims, and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, and any
state and foreign securities and blue sky laws, all as or to be amended from
time to time) and expenses, including (without limitation) attorney's fees and
disbursements, arising directly or indirectly from any action or thing which
First Union takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Fund given in accordance with
the terms of this Agreement, or (ii) upon Proper Instructions; provided,
however, that neither First Union nor any of its nominees or subcustodian shall
be indemnified against any liability to the Fund or to its Shareholders (or any
expenses incident to this liability) arising out of (x) First Union's or its
nominee's or subcustodian's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties under this Agreement or any agreement
between First Union and any nominee or subcustodian or (y) First Union's own
negligent failure to perform its duties under this Agreement. First Union
similarly agrees to indemnify and hold harmless the Fund from all liabilities
and expenses arising directly or indirectly from First Union's or its nominee's
or sub-custodian's willful misfeasance, bad faith, gross negligence or reckless
disregard in performing its duties under this agreement. If First Union advances
any cash for any purpose resulting from Proper Instructions, or if First Union
or its nominee or subcustodian shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except as may arise from its or its nominee's or
subcustodian's own negligent action, negligent failure to act, willful
misconduct, or reckless disregard of its duties under this Agreement or any
agreement between First Union and any nominee or subcustodian, the Fund shall
promptly reimburse First Union for the advance of cash or taxes, charges,
expenses, assessments, claims or liabilities.
31. Effective Period; Termination and Amendment. This Agreement shall become
effective as of its execution and shall continue in full force and effect until
terminated as hereinafter provided. The parties may mutually agree to amend this
Agreement at any time. Either party may terminate this Agreement by an
instrument in writing delivered or mailed, postage prepaid to the other party,
the termination to take effect not sooner than sixty (60) days after the date of
delivery or mailing; provided, however, that First
Union shall not act under Paragraph 18 in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of the
Fund has approved the initial use of a particular Securities Depository or
Book-Entry System and the receipt of an annual certificate of the Secretary or
an Assistant Secretary that the Board has reviewed the Fund's use of the
Securities Depository and/or Book-Entry System, as Rule 17f-4 under the 1940 Act
requires, nor shall First Union act under Paragraph 8 in the absence of receipt
of a certificate from the Fund's secretary containing the resolution of the
Board regarding the Board's determination that it is reasonable to rely on First
Union to perform the responsibilities delegated pursuant to this Agreement to
First Union as Foreign Custody Manager of the Fund, provided further, however,
that the Fund shall not amend or terminate this Agreement in contravention of
any applicable federal or state regulations, or any provision of the Declaration
of Trust, and further provided, that the Fund may at any time by action of its
Board (i) substitute another bank or trust company for First Union by giving
notice as described above to First Union or (ii) immediately terminate this
Agreement in the event the Comptroller of the Currency appoints a conservator or
receiver for First Union or upon the happening of a like event at the direction
of an appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, the Fund shall pay to First Union all compensation
as may be due as of the date of termination and shall likewise reimburse First
Union for its costs, expenses and disbursements.
32. Successor Custodian. If the Board shall appoint a successor custodian, First
Union shall, upon termination, deliver to the successor custodian at the office
of the custodian, duly endorsed and in the form for transfer, all Securities it
then holds under this Agreement and shall transfer to an account of the
successor custodian all of the Fund's Securities held in a Securities
Depository, Book-Entry System, Eligible Securities Depository, or Eligible
Foreign Custodian. If the Fund does not deliver to First Union a written order
designating a successor custodian or certified copy of a vote of the Board on or
before the date when the termination shall become effective, First Union shall
have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in New York, New York, of its own
selection, having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not less than $25,000,000, all Securities,
monies, and other Property First Union holds and all instruments First Union
holds relative thereto and all other Property it holds under this Agreement and
to transfer to an account of the successor custodian all of the Fund's
Securities held in any Securities Depository, Book-Entry System, Eligible
Securities Depository, or Eligible Foreign Custodian. Thereafter, that bank or
trust company shall be the successor of First Union under this Agreement. If
Property of the Fund remains in the possession of First Union after the date of
termination of this Agreement owing to the Fund's failure to procure the
certified copy of the vote referred to or of the Board to appoint a successor
custodian, First Union shall be entitled to fair compensation for its services
during the period First Union retains possession of the Property and the
provisions of this Agreement relating to the duties and obligations of First
Union shall remain in full force and effect.
33. Notices. All notices and other communications ("Notice" or "Notices" in this
Paragraph) hereunder shall be in writing and shall first be sent by telegram,
cable, telex, or facsimile sending device, and thereafter by overnight mail for
delivery on the next business day. Notices shall be addressed (a) if to First
Union, at First Union's address, 000 X. Xxxxx Xxxxxx, XX0000, Xxxxxxxxxxxx, XX
00000; (b) if to the Fund, at the address of the Fund; or (c) if to neither of
the foregoing, at another address as shall
have been notified to the sender of any such Notice or other communication. If
the location of the sender of a Notice and the address of the addressee thereof
are, at the time of sending, more than 100 miles apart, the Notice may be sent
by first-class mail, in which case it shall be deemed to have been given three
days after it is sent, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately,
and, if the location of the sender of a Notice and the address of the addressee
thereof are, at the time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given two days after it is sent, of if sent by messenger, it shall be deemed to
have been given on the day it is delivered, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. The sender shall pay all postage, cable, telegram, telex and
facsimile sending device charges arising from the sending of a Notice.
34. Further Actions. Each party agrees to perform further acts and execute
further documents as are necessary to effectuate the purposes of this Agreement.
35. Additional Portfolios. In the event that the Fund establishes one or more
portfolios of a Fund in addition to the Portfolios listed on Attachment C, for
which it desires First Union to render services as custodian under the terms
hereof, it shall so notify First Union in writing, and if the Custodian agrees
in writing to provide these services, the portfolios shall become a Portfolio
hereunder.
36. Miscellaneous. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the parties hereto. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall together,
constitute only one instrument. This Agreement shall be deemed to be a contract
made in Pennsylvania and governed by Pennsylvania law. If a court decision,
statute, rule or otherwise holds or invalidates any provision of this Agreement,
the remainder of this Agreement shall not be affected. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors. The Fund's Articles of Incorporation or Declaration of Trust is on
file with the Secretary of the [State/Commonwealth of Delaware]. The Fund's
officers have executed this Agreement on behalf of the Fund as officers and not
individually and the obligations this Agreement imposes upon the Fund are not
binding upon any of the Fund's Directors or Trustees, officers or shareholders
individually but are binding only upon the assets and Property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused their officers
designated below to execute this Agreement as of the day and year first above
written.
PBHG Insurance Series Fund
Attest:/s/ By: /s/ Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Chief Financial Officer
FIRST UNION NATIONAL BANK
Attest:/s/ By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
ATTACHMENT A
Fees
For the services described in the Agreement, the Fund shall pay a custody
safekeeping fee and custody transaction fees as follows, monthly in arrears:
Domestic Custody Safekeeping Fees
..25 basis points on the average daily net assets of all the Fund's Portfolios,
computed and payable monthly. There is no minimum fee for a Portfolio.
Domestic Custody Transaction Fees
$4.00 per transaction through Depository Trust Company.
$10.00 per transaction through Federal Reserve.
$30.00 per transaction for GIC contracts / Physical Securities / Private
Placements.
$10.00 per transaction through Participants Trust Company.
$15.00 per option contract.
$4.00 per paydowns on mortgage backed securities.
$5.50 Fed wire charge on Repo collacteral in / out.
$5.50 per incoming cash wire transfers.
$7.50 per outgoing cash wire transfers.
$5.50 dividend reinvestment.
$2.50 per Federal Reserve charge for sale/return of collateral.
$8.00 futures contracts.
ATTACHMENT B: AUTHORIZED PERSONS
Employees of SEI Investments - Mutual Fund Services
Xxxxx XxXxxxxxx Xxxxx X. Xxxxxxxx Xxxxx Xxxx
Xxxxx X. Xxxxx Xxxxx Xxxxxx Xxxx Xxxxxxxxx
Xxxxx Xxxxx Xxxxxxxx X. Xxxxxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxxxx Xxx Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxx X. Xxxxxx Xxxxx Xxxxx Xxxx X. Xxxxxx
Xxx Xxxxxxx
Employees of Pilgrim Xxxxxx & Associates, Ltd. and/or PBHG Fund Services
Xxxxxx X. Xxxxxx Xxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxx Xxxx X. Xxxx Xxxxxx X. Xxxxxx
Xxxxxxx Xxxxxx Xxxxxxxx X. Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxxxx Xxxx Xxxxxxx Xxx X. Xxxxxxxx
Xxxxxxx Xxxxxx
Employees of DST Systems, Inc.
Xxxxx Xxxx Xxxxx Xxxxxxxx Xxxxxxxx Xxxxx
Employees of Xxxxxx Asset Management Company
Xxxxx Xxxxx Xxxx Xxxx Xxxxx Xxxxx
Xxxxx Xxxxxxx Xxxxx Xxxx Xxxx Xxxxxx
Xxxxxx Xxxxxxxx Xxxxxxx Xxxx
Employees of Analytic Investors, Inc.
Xxxx XxXxxxxx Xxxxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx Xxx Xxx Xxxxxx XxXxxxx
Xxxxx Xxxxxx Xxxxx Xxxxxxxxx
Employees of NWQ Investment Management Company, Inc.
Xxx Xxxxx Xxxxx Xxxxxx Xxxx Xxxxxxxxx
Xxxxx X.Xxxxx Xxxxx Xxxxxx Xxxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxxx Xxxxx Xxxxxx
Employees of Xxxxxxx/PRA Securities Advisers LLC
Xxxxxxx X. Xxxx Xxxxx X. X'Xxxxxxx
Xxxxx X. Xxxx Xxxx Xxxxxx
Alexa X. Xxxxxxx
Employees of Pacific Financial Research, Inc.
Xxxxxxx Xxxxx Xxxxx X. Xxxxx Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxx
Xxxxxxx X. Grey Nugroho Soeharto
ATTACHMENT C: PORTFOLIOS OF THE FUND
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
PBHG Mid-Cap Value Portfolio
PBHG Select 20 Portfolio
PBHG Select Value Portfolio
PBHG Small Cap Growth Portfolio
PBHG Small Cap Value Portfolio
PBHG Technology & Communications Portfolio
Exhibit A
Provision of Additional Information
For purposes of Paragraph 8 of the Agreement, the Fund (or its investment
adviser(s)) shall be deemed to have considered the Country Risk as is incurred
by placing and maintaining Foreign Assets in each country for which First Union
is serving as Foreign Custody Manager of the Fund. To aid the Fund (and its
investment adviser(s)) in monitoring Country Risk, however, First Union shall
provide the Fund (or its investment adviser(s)) the following information with
respect to the foreign countries of Eligible Foreign Custodians that First Union
selects pursuant to Paragraph 8.b of the Agreement: (a) opinions of local
counsel or reports concerning whether applicable foreign law would restrict the
access afforded to the Fund's independent public accountants to books and
records kept by an Eligible Foreign Custodian located in that country; whether
applicable foreign law would restrict the Fund's ability to recover its Foreign
Assets and cash in the event of the bankruptcy of an Eligible Foreign Custodian
located in that country; whether applicable foreign law would restrict the
Fund's ability to recover Foreign Assets that are lost while under the control
of an Eligible Foreign Custodian located in the country; and (b) periodic market
reports with respect to securities settlement and registration, taxation, and
depositories (including depository evaluation), if any.
First Union will also periodically provide the Fund (or its investment
adviser(s)) the following information relating to Country Risk with respect to
the foreign countries of Eligible Foreign Custodians that First Union selects
pursuant to Paragraph 8.b of the Agreement, or eligible securities depositories
pursuant to Paragraph 9, as First Union receives this information: (y) written
information concerning each foreign country's practices with regard to
expropriation, nationalization, freezes, or confiscation of financial assets; or
whether difficulties in converting the Fund's cash and cash equivalents to U.S.
dollars are reasonably foreseeable; (z) market reports with respect to each
foreign country's securities regulatory environment, foreign ownership
restrictions, or foreign exchange practices. The Fund hereby acknowledges that:
(i) this information is solely designed to inform the Fund (or its investment
adviser(s)) of market conditions and procedures and is not intended to be
considered comprehensive or as a recommendation to invest or not invest in
particular markets; and (ii) First Union is not the primary source of the
information and has gathered the information from sources it considers reliable,
but that First Union shall have no responsibility for inaccuracies or incomplete
information.
To aid the Fund or its delegate in its consideration of Country Risks, First
Union shall furnish the Fund annually and prior to the initial placing of
Foreign Assets into a country, the following information:
(i) securities settlement and registration, (ii) taxation, and (iii) compulsory
depositories.
First Union shall furnish additional information customarily provided to other
investment companies registered under the Investment Company Act of 1940 for
which First Union provides foreign custody services.
First Union shall furnish additional information regarding Country Risks as the
Fund may reasonably request from time to time.
Exhibit B
List of Eligible Securities Depositories
-----------------------------------------------------------------------------------------------------------------------------------
Depository Safekeeping Assessments(SM) have been designed to assist Eligi- Eligi- Eligi- Eligi- Eligi- Eligi
U.S. Mutual Fund Boards of Directors to comply with SEC rule 17f-7 Eligible bility bility bility bility bility bilit
and are intended to serve as the depository risk analysis referred to Depository Cri- Cri- Cri- Cri- Cri- Cri-
in the rule. The Depository Safekeeping Assessments(SM) are meant to under SEC teria teria teria teria teria teria
augment, rather than substitute for, investor due diligence. rule 17f-7? (i) (ii) (iii) (iv) (v) (vi)
--------------------------------------------------------------------- ------------------------------------------------------------
COUNTRY DEPOSITORY NAME ACRONYM TYPE SEC Rule 17-f7 Eligibility Criteria
--------------------------------------------------------------------- ------------------------------------------------------------
ARGENTINA Central de Registracion y CRYL B Y Y Y Y Y Y Y
Liquidacion de Instrumentos
de Endeudamiento Publico
--------------------------------------------------------------------- ------------------------------------------------------------
ARGENTINA Caja de Valores S.A. CVSA C X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXXX Reserve Bank of
Australia/Reserve Bank
Information and Transfer
System RITS A X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXXX Austraclear Limited Austraclear A X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXXX Clearing House Electronic
Subregister System CHESS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
AUSTRIA Oesterreichische
Kontrollbank AG OeKB B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Xxxxxxxx Xxxx xx Xxxxxxx XXX B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Caisse Interprofessionnelle
de Depots et de Virements
de Titres S.A. CIK B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
BRAZIL Companhia Brasileira de
Liquidacao e Custodia CBLC B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
BRAZIL Central de Custodia e
Liquidacao Financeira de
Titulos Privados CETIP B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
BRAZIL Sistema Especial de
Liquidacao e Custodia SELIC B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXX Bulgarian National Bank BNB A X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXX Central Depository A.D. CDAD B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXX Canadian Depository for
Securities Limited CDS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
CHILE Deposito Central de Valores
S.A. DCV C X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXX Shanghai Securities Central
Clearing and Registration
Corporation SSCCR B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
CHINA Shenzhen Securities Central
Clearing Company, Limited SSCC B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXX Deposito Central de Valores DCV A X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXXX Deposito Centralizado de
Valores de Colombia S.A. DECEVAL C Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
CROATIA Central Depository Agency
Inc. (Stredisnja
depozitarna agencija d.d.) SDA X X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Croatian National Bank CNB C Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
CROATIA Ministry of Finance of
Republic of Croatia N/A** X X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXX XXXXXXXX Czech National Bank CNB B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXX XXXXXXXX Stredisko cennych papiru -
Ceska republica XXX X X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Vaerdipapircentralen A/S
(VP) VP B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
EGYPT Misr for Clearing,
Settlement and Depository,
S.A.E. MCSD X/X* X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Estonian Central Depository
for Securities Limited
(Eesti Vaartpaberite
Keskdepositoorium) ECDS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
FINLAND Finnish Central Securities
Depository Limited APK A/B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXX Euroclear France Euroclear France A/B X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXXX Clearstream Banking AG Clearstream X X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXX Bank of Greece BoG A X X X X X X X
--------------------------------------------------------------------- ------------------------------------------------------------
XXXXXX Central Securities
Depository S.A. CSD B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
HONG KONG Central Moneymarkets Unit
(CMU) CMU B Y Y Y Y Y Y Y
--------------------------------------------------------------------- ------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Regul- Asset
atory Partic- Segre-
Deposit- Super- Deposit- ipant System Busi- gation Report- Asset
ory/ vision/ ory Default Security/ ness /Account ing/ Safe-
Author- Examin- Liability/ Protec- Internal Re- Struc- Record keeping
ity ation Insurance tions Controls covery ture Keeping Average
--------------------------------------------------------------------------------------------- --------
COUNTRY Asset Safekeeping Core Competencies --
--------------------------------------------------------------------------------------------- --------
ARGENTINA 1 1 2 2 2 2 1 2 1.63
--------------------------------------------------------------------------------------------- --------
ARGENTINA 1 1 1 1 1 1 1 1 1.00
--------------------------------------------------------------------------------------------- --------
AUSTRALIA
1 1 2 1 1 1 2 1 1.25
--------------------------------------------------------------------------------------------- --------
AUSTRALIA 1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
AUSTRALIA
1 2 2 1 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
AUSTRIA
1 1 1 1 1 2 3 1 1.38
--------------------------------------------------------------------------------------------- --------
BELGIUM 1 2 2 1 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
BELGIUM
1 1 1 2 1 2 2 1 1.38
--------------------------------------------------------------------------------------------- --------
BRAZIL
1 1 3 1 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
BRAZIL
1 1 3 3 1 3 1 3 2.00
--------------------------------------------------------------------------------------------- --------
BRAZIL
1 2 2 2 1 2 1 1 1.50
--------------------------------------------------------------------------------------------- --------
BULGARIA 1 1 3 1 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
BULGARIA 1 1 2 2 1 1 1 2 1.38
--------------------------------------------------------------------------------------------- --------
CANADA
1 2 1 1 1 1 2 1 1.25
--------------------------------------------------------------------------------------------- --------
CHILE
1 1 1 3 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
CHINA
1 1 2 2 2 2 1 1 1.50
--------------------------------------------------------------------------------------------- --------
CHINA
1 1 2 2 2 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
COLOMBIA 1 1 3 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
COLOMBIA
3 1 1 3 1 3 1 1 1.75
--------------------------------------------------------------------------------------------- --------
CROATIA
1 3 3 2 1 2 1 1 1.75
--------------------------------------------------------------------------------------------- --------
CROATIA 1 2 2 3 3 N/R 3 3 2.43*N/R
--------------------------------------------------------------------------------------------- --------
CROATIA
1 2 2 3 N/R 3 2 3 2.29*N/R
--------------------------------------------------------------------------------------------- --------
CZECH REPUBLIC 1 1 2 2 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
CZECH REPUBLIC
1 2 2 1 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
DENMARK
1 1 1 2 1 1 2 1 1.25
--------------------------------------------------------------------------------------------- --------
EGYPT
1 1 2 2 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
ESTONIA
1 3 1 2 1 3 1 1 1.63
--------------------------------------------------------------------------------------------- --------
FINLAND
1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
FRANCE 1 2 2 1 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
GERMANY 1 1 2 2 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
GREECE 1 2 2 1 1 2 1 2 1.50
--------------------------------------------------------------------------------------------- --------
GREECE
1 1 1 1 1 2 1 1 1.13
--------------------------------------------------------------------------------------------- --------
HONG KONG
1 1 3 2 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
January 2001
Exhibit B
Depository Safekeeping Assessments(SM) Summary
------------------------------------------------------------------------------------------------------------------------------------
Depository Safekeeping Assessments(SM) have been designed to assist Eligi- Eligi- Eligi- Eligi- Eligi- Eligi-
U.S. Mutual Fund Boards of Directors to comply with SEC rule 17f-7 Eligible bility bility bility bility bility bility
and are intended to serve as the depository risk analysis referred to Depository Cri- Cri- Cri- Cri- Cri- Cri-
in the rule. The Depository Safekeeping Assessments(SM) are meant to under SEC teria teria teria teria teria teria
augment, rather than substitute for, investor due diligence. rule 17f-7? (i) (ii) (iii) (iv) (v) (vi)
--------------------------------------------------------------------- -------------------------------------------------------------
COUNTRY DEPOSITORY NAME ACRONYM TYPE SEC Rule 17-f7 Eligibility Criteria
--------------------------------------------------------------------- -------------------------------------------------------------
HONG KONG Hong Kong Securities
Clearing Company Limited HKSCC B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXX Central Depository and
Clearing House (Kozponti
Elszamolohaz es Ertektar
(Budapest) Rt.) KELER X/X* X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX National Securities
Depository Limited NSDL C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
INDIA Central Depository Services
(India) Limited CDSL C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
INDIA Reserve Bank of India RBI A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXXX PT Kustodian Sentral Efek
Indonesia KSEI B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXX CRESTCo Limited CREST B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
ISRAEL Tel Aviv Stock Exchange
Clearing House TECH B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX Monte Titoli S.p.A. Monti
Titoli X.x.X X/X* X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
IVORY COAST Le Depositaire Central /
Banque de Reglement DCBR X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXX Xxxxxxx Central Securities
Depository JCSD C X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX Xxxxx Securities Depository
Center JASDEC C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
JAPAN Bank of Japan BoJ X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX Central Bank of Kenya CBCD B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
KAZAKHSTAN Central Securities
Depository CJSC CSD C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
LATVIA Latvian Central Depository LCD B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
LEBANON Custodian and Clearing
Centre of Financial
Instruments for Lebanon and
the Middle East X.X.X. Midclear B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
LITHUANIA Central Securities
Depository of Lithuania CSDL B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXXXX Clearstream Banking
Luxembourg S.A. CBL A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXX Malaysian Central
Depository Sdn. Bhd. MCD C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
MALAYSIA Bank Negara Malaysia XXX X/X* X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
MAURITIUS Central Depository and
Settlement Company Limited CDS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
MEXICO S.D. Indeval, S.A. de C.V. INDEVAL B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
MOROCCO Maroclear Maroclear X/X* X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXXXXX Xxxxxxxxxx Centraal
Instituut voor Giraal
Effectenverkeer B.V. NEGICEF B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXX XXXXXXX New Zealand Central
Securities Depository NZCSD A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXX Central Securities Clearing
System Limited CSCS X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX Verdipapirsentralen VPS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
OMAN Muscat Depository and
Securities Registration
Company (S.A.O.C.) MDSCR C X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXX Central Depository Company
of Pakistan Limited CDC C X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXX State Bank of Pakistan SBP X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXX CAVALI ICLV S.A. CAVALI B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
PHILIPPINES Philippine Central
Depository, Inc. PCD C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Regul- Asset
atory Partic- Segre-
Deposit- Super- Deposit- ipant System Busi- gation Report- Asset
ory/ vision/ ory Default Security/ ness /Account ing/ Safe-
Author- Examin- Liability/ Protec- Internal Re- Struc- Record keeping
ity ation Insurance tions Controls covery ture Keeping Average
--------------------------------------------------------------------------------------------- --------
COUNTRY Asset Safekeeping Core Competencies --
--------------------------------------------------------------------------------------------- --------
HONG KONG
1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
HUNGARY
1 2 1 1 1 2 1 1 1.25
--------------------------------------------------------------------------------------------- --------
INDIA
2 2 1 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
INDIA
2 2 1 3 1 2 1 1 1.63
--------------------------------------------------------------------------------------------- --------
INDIA 1 2 2 1 3 3 1 2 1.88
--------------------------------------------------------------------------------------------- --------
INDONESIA
1 2 1 2 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
IRELAND 2 1 2 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
ISRAEL
1 1 2 2 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
ITALY
1 2 1 1 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
IVORY COAST
1 1 3 2 3 2 1 2 1.88
--------------------------------------------------------------------------------------------- --------
JAMAICA
1 1 2 2 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
JAPAN
1 1 2 2 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
JAPAN 1 1 3 2 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
KENYA 3 1 3 3 3 2 2 2 2.38
--------------------------------------------------------------------------------------------- --------
KAZAKHSTAN
1 2 3 2 2 2 2 1 1.88
--------------------------------------------------------------------------------------------- --------
LATVIA 1 2 2 2 1 3 1 1 1.63
--------------------------------------------------------------------------------------------- --------
LEBANON
1 1 1 2 2 2 2 2 1.63
--------------------------------------------------------------------------------------------- --------
LITHUANIA
1 2 1 2 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
LUXEMBOURG
1 1 3 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
MALAYSIA
1 2 2 2 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
MALAYSIA 1 2 3 2 1 1 1 1 1.50
--------------------------------------------------------------------------------------------- --------
MAURITIUS
1 2 2 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
MEXICO 1 1 1 1 1 1 1 1 1.00
--------------------------------------------------------------------------------------------- --------
MOROCCO 2 2 3 3 2 2 1 2 2.13
--------------------------------------------------------------------------------------------- --------
NETHERLANDS
1 2 1 1 1 2 3 1 1.50
--------------------------------------------------------------------------------------------- --------
NEW ZEALAND
1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
NIGERIA
2 1 3 2 1 2 2 2 1.88
--------------------------------------------------------------------------------------------- --------
NORWAY 1 1 1 1 1 1 1 1 1.00
--------------------------------------------------------------------------------------------- --------
OMAN
1 1 1 2 2 2 1 2 1.50
--------------------------------------------------------------------------------------------- --------
PAKISTAN
1 2 1 3 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
PAKISTAN 1 2 3 2 1 3 1 3 2.00
--------------------------------------------------------------------------------------------- --------
PERU 1 1 1 2 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
PHILIPPINES
2 2 1 2 1 1 2 1 1.50
--------------------------------------------------------------------------------------------- --------
January 2001
Exhibit B
Depository Safekeeping Assessments(SM) Summary
------------------------------------------------------------------------------------------------------------------------------------
Depository Safekeeping Assessments(SM) have been designed to assist Eligi- Eligi- Eligi- Eligi- Eligi- Eligi-
U.S. Mutual Fund Boards of Directors to comply with SEC rule 17f-7 Eligible bility bility bility bility bility bility
and are intended to serve as the depository risk analysis referred to Depository Cri- Cri- Cri- Cri- Cri- Cri-
in the rule. The Depository Safekeeping Assessments(SM) are meant to under SEC teria teria teria teria teria teria
augment, rather than substitute for, investor due diligence. rule 17f-7? (i) (ii) (iii) (iv) (v) (vi)
--------------------------------------------------------------------- -------------------------------------------------------------
COUNTRY DEPOSITORY NAME ACRONYM TYPE SEC Rule 17-f7 Eligibility Criteria
--------------------------------------------------------------------- -------------------------------------------------------------
PHILIPPINES Bangko Sentral ng Pilipinas
/ Register of Scripless
Securities XXXX X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX Central Registry of
Xxxxxxxx-Xxxxx XXX X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
POLAND National Depository for
Securities S.A. NDS B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
PORTUGAL Sociedade Gestora de
Sistemas de Liquidacao e de
Sistemas Centralizados de
Valores Mobiliarios, S.A. INTERBOLSA B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
ROMANIA Bucharest Stock Exchange BSE A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXX National Company for
Clearing, Settlement and
Depository for Securities SNCDD B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
RUSSIA Vneshtorgbank VTB B*/C X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX National Depository Centre NDC X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXXX Monetary Authority of
Singapore MAS A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXXX The Central Depository
(Pte) Limited CDP X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX
XXXXXXXX National Bank of Slovakia NBS C Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
SLOVAK Stredisko cennych papierov
REPUBLIC SR Bratislava, a.s. XXX X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
SLOVENIA Centralna klirinsko depotna
xxxxxx x.x. XXX X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX XXXXXX Central Depository (Pty)
Limited CDL B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX XXXXXX Share Transactions Totally
Electronic STRATE B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
SOUTH KOREA Korea Securities Depository KSD X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX Banco de Espana / Central
Book Entry Office CBEO A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXX Servicio de Compensacion y
Liquidacion de Valores,
S.A. SCLV B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXX XXXXX Central Depository System
(Private) Limited SDCDS X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX Vardepapperscentralen A.B. VPC B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
SWITZERLAND SIS SegaInterSettle AG SIS A X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX Xxxxxx Securities Central
Depository Co., Ltd. TSCD X X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXXXX Thailand Securities
Depository Company Limited TSDC B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
TRANSNATIONAL Clearstream Banking
Luxembourg S.A. (for Euro
Issues) CBL A Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
TRANSNATIONAL Euroclear (for Euro Issues) Euroclear A Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
TUNISIA Societe Tunisienne
Interprofessionnelle pour
la Compensation et les
Depots des Valeurs
Mobilieres STICODEVAM B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
TURKEY IMKB Takas ve Saklama
Bankasi A.S. Takasbank X/X* X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XXXXXXX Central Moneymarkets Office CMO B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XXXXXXX CRESTCo Limited CREST B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XXXXXX Depository Trust Company DTC B X/X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XXXXXX The Federal Reserve
Book-Entry System FED A X/X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XXXXXX Participants Trust Company
(see DTC) PTC (see DTC) N/A -- -- -- -- -- --
--------------------------------------------------------------------- -------------------------------------------------------------
VENEZUELA Banco Central de Venezuela BCV B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
VENEZUELA Caja Venezolana de Valores
CA CVV C X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX Bank of Zambia BoZ A/B X X X X X X X
--------------------------------------------------------------------- -------------------------------------------------------------
XXXXXX XxXX Central Shares
Depository Limited CSD B Y Y Y Y Y Y Y
--------------------------------------------------------------------- -------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Regul- Asset
atory Partic- Segre-
Deposit- Super- Deposit- ipant System Busi- gation Report- Asset
ory/ vision/ ory Default Security/ ness /Account ing/ Safe-
Author- Examin- Liability/ Protec- Internal Re- Struc- Record keeping
ity ation Insurance tions Controls covery ture Keeping Average
--------------------------------------------------------------------------------------------- --------
COUNTRY Asset Safekeeping Core Competencies --
--------------------------------------------------------------------------------------------- --------
PHILIPPINES
1 1 3 2 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
POLAND
1 2 3 1 2 2 1 2 1.75
--------------------------------------------------------------------------------------------- --------
POLAND
1 1 3 1 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
PORTUGAL
1 1 1 2 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
ROMANIA 1 2 3 1 1 2 1 1 1.50
--------------------------------------------------------------------------------------------- --------
ROMANIA
2 1 3 2 2 1 1 1 1.63
--------------------------------------------------------------------------------------------- --------
RUSSIA 2 1 2 3 1 2 2 2 1.88
--------------------------------------------------------------------------------------------- --------
RUSSIA 2 1 2 1 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
SINGAPORE
1 1 3 1 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
SINGAPORE
1 2 1 1 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
XXXXXX
XXXXXXXX 0 0 0 0 0 0 1 3 2.00
--------------------------------------------------------------------------------------------- --------
XXXXXX
XXXXXXXX 0 0 0 0 0 0 1 2 1.50
--------------------------------------------------------------------------------------------- --------
SLOVENIA
1 1 3 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
SOUTH AFRICA
1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
SOUTH AFRICA
1 2 1 2 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
SOUTH KOREA 1 2 2 2 1 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
SPAIN
1 1 2 1 1 2 1 1 1.25
--------------------------------------------------------------------------------------------- --------
SPAIN
1 1 1 1 1 1 1 1 1.00
--------------------------------------------------------------------------------------------- --------
SRI LANKA
1 2 2 1 2 1 1 1 1.38
--------------------------------------------------------------------------------------------- --------
SWEDEN 1 1 2 2 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
SWITZERLAND 1 1 1 1 1 1 2 1 1.13
--------------------------------------------------------------------------------------------- --------
TAIWAN
1 1 1 2 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
THAILAND
1 2 1 1 1 1 2 1 1.25
--------------------------------------------------------------------------------------------- --------
TRANSNATIONAL
1 1 3 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
TRANSNATIONAL 1 1 3 1 1 1 2 1 1.38
--------------------------------------------------------------------------------------------- --------
TUNISIA
1 2 2 2 2 3 1 2 1.88
--------------------------------------------------------------------------------------------- --------
TURKEY
1 1 1 2 1 2 2 1 1.38
--------------------------------------------------------------------------------------------- --------
UNITED KINGDOM 1 1 2 3 1 1 2 1 1.50
--------------------------------------------------------------------------------------------- --------
UNITED KINGDOM 2 1 2 1 1 1 1 1 1.25
--------------------------------------------------------------------------------------------- --------
UNITED STATES 1 1 2 1 1 1 2 1 1.25
--------------------------------------------------------------------------------------------- --------
UNITED STATES
1 1 2 1 1 1 1 1 1.13
--------------------------------------------------------------------------------------------- --------
UNITED STATES
S E E -- D T C -- 0.00
--------------------------------------------------------------------------------------------- --------
VENEZUELA 1 2 3 2 1 3 1 1 1.75
--------------------------------------------------------------------------------------------- --------
VENEZUELA
1 1 1 3 1 2 1 1 1.38
--------------------------------------------------------------------------------------------- --------
ZAMBIA 1 1 2 2 2 2 1 2 1.63
--------------------------------------------------------------------------------------------- --------
ZAMBIA
3 1 3 2 3 1 1 2 2.00
--------------------------------------------------------------------------------------------- --------
Exhibit C
List of Foreign Markets
ARGENTINA XX Xxxxxx Xxxxx Bank
Buenos Aires
Acct: Chase Manhattan London
AUSTRALIA Australia and New Zealand Banking Group Ltd.
Melbourne
BIC: XXXXXX0X
Acct: Chase Manhattan London
Statement #: 218032/00001
AUSTRIA X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
BAHRAIN National Bank of Bahrain
Manama
Acct: Chase Manhattan London
BANGLADESH Standard Chartered Bank
Dhaka
Acct: Chase Manhattan London
BELGIUM X.X. Xxxxxx AG
Frankfurt
Acct: Chase Manhattan London
Acct #: 6231400604
BERMUDA The Bank of Bermuda Ltd
Xxxxxxxx
Acct: Chase Manhattan London
BOTSWANA Barclays Bank of Botswana Ltd
Gaborone
Acct: Chase Manhattan London
BRAZIL BankBoston, N.A.
Sao Paulo
Acct: Chase Manhattan London
BULGARIA ING Bank N.V.
Sofia
Acct: Chase Manhattan London
CANADA Royal Bank of Canada
Toronto
For: Chase Manhattan Bank London
CHILE Citibank, X.X.
Xxxxxxxx
Acct: Chase Manhattan London
CHINA - SHANGHAI Citibank, N.A.
New York
Acct: Chase Manhattan London
CHINA - SHENZHEN The Chase Manhattan Bank
Hong Kong
Acct: Chase Manhattan London
COLOMBIA Cititrust Colombia S.A. Sociedad Fiduciaria
Santa Fe de Bogota
Acct: Chase Manhattan London
CROATIA Privredna banka Zagreb d.d.
Zagreb
Acct: Chase Manhattan London
CYPRUS Cyprus Popular Bank
Nicosia
Acct: Chase Manhattan London
CZECH REPUBLIC Ceskoslovenska Obchodni Banka, A.S
Prague
Acct: Chase Manhattan London
DENMARK Nordea Bank Denmark A/S
Copenhagen
Acct: Chase Manhattan London
ECUADOR Citibank, N.A.
Quito
Acct: Chase Manhattan London
EGYPT Citibank, N.A.
Cairo
Acct: Chase Manhattan London
ESTONIA Esti Uhispank
Tallinn
Acct: Chase Manhattan London
FINLAND X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
FRANCE X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
GERMANY X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
GHANA Barclays Bank of Ghana Ltd
Accra
Acct: Chase Manhattan London
GREECE X.X. Xxxxxx AG
Frankfurt, Germany
BIC:XXXXXXXX
Acct #: 6231400604
Acct: Chase Manhattan Bank London
HONG KONG XX Xxxxxx Xxxxx Bank
Hong Kong
Acct: Chase Manhattan London
HUNGARY ING Bank Rt.
Budapest
Acct: Chase Manhattan Bank London
ICELAND Islandsbanki - FBA
Reykjavik
Acct: Chase Manhattan Bank London
INDONESIA Standard Chartered Bank
Jakarta
Acct: Chase Manhattan Bank
IRELAND X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
ISRAEL Bank Leumi Le-Israel B.M.
Tel Aviv
Acct: Chase Manhattan Bank London
ITALY X.X. Xxxxxx AG
Frankfurt
For Chase Manhattan London
Further a/c 6231400604
IVORY COAST Societe Generale
Paris
Acct: Chase Manhattan Bank London
JAMAICA CIBC Trust and Merchant Bank
Jamaica Limited
Kingston
Acct: Chase Manhattan Bank London
JAPAN XX Xxxxxx Xxxxx Bank
Tokyo
Acct: Chase Manhattan Bank London
JORDAN Arab Bank Plc
Amman
Acct: Chase Manhattan Bank London
KAZAKHSTAN ABN AMRO Bank Kazakhstan
Almaty
Acct: Chase Manhattan Bank London
KENYA Barclays Bank of Kenya Ltd
Nairobi
Acct: Chase Manhattan Bank London
LATVIA Hansabanka
Riga
Acct: Chase Manhattan Bank London
LEBANON XX Xxxxxx Xxxxx Bank
New York
Acct: Chase Manhattan Bank London
LITHUANIA Vilniaus Bankas AB
Vilnius
Acct: Chase Manhattan Bank London
LUXEMBOURG X.X. Xxxxxx AG
Frankfurt
Chase Manhattan London
Further a/c 6231400604
MALAYSIA X.X. Xxxxxx Xxxxx Bank Berhad
Kuala Lumpur
Acct: Chase Manhattan Bank London
MAURITIUS The Hong Kong and Shanghai Banking
Corporation Limited
Port Louis
Acct: Chase Manhattan Bank London
MEXICO Banco X.X. Xxxxxx
Mexico, X.X
XXXXX: XXXXXXXX
Acct: Chase London
Acct: 11004
MOROCCO Banque Commerciale du Maroc S.A.
Casablanca
Acct: Chase Manhattan Bank London
NAMIBIA Standard Corporate & Merchant Bank
Johannesburg
Acct: Chase Manhattan Bank London
NETHERLANDS X.X. Xxxxxx AG
Frankfurt
Chase Manhattan London
Further a/c 6231400604
NEW ZEALAND National Bank of New Zealand
Wellington
Acct: Chase Manhattan Bank London
NORWAY Den norske Bank ASA
Oslo
Acct: Chase Manhattan Bank London
OMAN Oman Arab Bank
Muscat
Acct: Chase Manhattan Bank London
PAKISTAN Standard Chartered Bank
Karachi
Acct: Chase Manhattan Bank London
PERU Banco de Credito del Peru
Lima
Acct: Chase Manhattan Bank London
PHILIPPINES The Hong Kong and Shanghai Banking
Corporation Limited
Manila
Acct: Chase Manhattan Bank London
POLAND . Bank Rozwoju Eksportu S.A.
Warsaw
Acct: Chase Manhattan Bank London
PORTUGAL X.X. Xxxxxx AG
Frankfurt
Chase Manhattan London
Further a/c 6231400604
ROMANIA ABN AMRO Bank (Romania) S.A.
Bucharest
Acct: Chase Manhattan Bank London
SINGAPORE Oversea-Chinese Banking Corporation
Singapore
Acct: Chase Manhattan Bank London
SLOVAK REPUBLIC Ceskoslovenska Obchodni Banka, A.S.
Bratislava
Acct: Chase Manhattan Bank London
SLOVENIA Bank Austria Creditanstalt d.d. Ljubljana
Ljubljana
Acct: Chase Manhattan Bank London
SOUTH AFRICA Standard Corporate & Merchant Bank
Johannesburg
Acct: Chase Manhattan Bank London
SOUTH KOREA Standard Chartered Bank
Seoul
Acct: Chase Manhattan Bank London
SPAIN X.X. Xxxxxx AG
Frankfurt
Chase Manhattan London
Further a/c 6231400604
SRI LANKA The Hong Kong and Shanghai Banking
Corporation Limited
Colombo
Acct: Chase Manhattan Bank London
SWEDEN Svenska Handelsbanken
Stockholm
Acct: Chase Manhattan Bank London
SWITZERLAND UBS AG
Zurich
Acct: Chase Manhattan Bank London
TAIWAN The Hong Kong and Shanghai Banking Corporation Limited
Taipei
Acct: Chase Manhattan Bank London
THAILAND Standard Chartered Bank
Bangkok
Acct: Chase Manhattan Bank London
TUNISIA Banque Internationale Arabe de Tunisie, X.X.
Xxxxx
Acct: Chase Manhattan Bank London
TURKEY XX Xxxxxx Xxxxx Bank
Istanbul
Acct: Chase Manhattan Bank London
U.K. National Westminster Bank
London
Sort Code: 60-92-42
Acct: Chase Manhattan Bank London
URUGUAY BankBoston, N.A.
Montevideo
Acct: Chase Manhattan Bank London
VENEZUELA Citibank, N.A.
Caracas
Acct: Chase Manhattan Bank London
ZAMBIA Barclays Bank of Zambia Ltd
Lusaka
Acct: Chase Manhattan Bank London
ZIMBABWE Barclays Bank of Zimbabwe Ltd
Harare
Acct: Chase Manhattan Bank London
