Exhibit 8(j)
CITIBANK SECURITIES SERVICES
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[7/30/92-L]
SUBCUSTODIAL SERVICES AGREEMENT
SUBCUSTODIAL SERVICES AGREEMENT, dated as of October 1, 1996, between CITIBANK,
N.A., a national banking association, having an office at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000 and acting through such office in New York (the "Bank"),
CITICORP, a corporation organized under the laws of the State of Delaware,
having an office at Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and PNC BANK, National Association, a national banking association,
having an office at _____________________________________________________ (the
_________________________________________________________________________
__________________________________________"Customer").
W I T N E S S E T H :
THAT WHEREAS, the Customer represents that it is authorized to (a) open and
maintain a custody account (the "Subcustody Account") with the Bank to hold
certain property ("Property") including, but not limited to, stocks, bonds, or
other securities ("Securities"), funds and other property owned or held by the
Customer, (b) enter into this Agreement, and (c) direct all actions and
transactions contemplated hereunder. The Customer further represents that it is
duly incorporated, organized or associated and in good standing under the laws
of the state or country of its incorporation, organization or association and
the consummation of transactions contemplated hereby or directed by it hereunder
will not violate any applicable laws, regulations or orders;
WHEREAS, the Securities and Exchange Commission issued on June 19, 1995, and may
in the future issue, an order or orders (the "Exemptive Orders") which, among
other things, exempt certain indirect subsidiaries of Citicorp (the "Exempt
Subsidiaries") from the shareholders' equity requirements of Rule 17f-5
promulgated under the Investment Company Act of 1940, as amended (the
"Investment Company Act");
NOW, THEREFORE, in consideration of the premises and of the agreements
hereinafter set forth, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE.
The Customer hereby appoints the Bank as subcustodian of the Property
and as its agent hereunder, and the Bank agrees to act as such upon the terms
and conditions hereinafter provided.
2. DELIVERY; SAFEKEEPING.
The Customer has heretofore delivered, or will deliver or cause to be
delivered, Property to the Bank, which Property the Bank agrees to keep safely
as subcustodian for the Customer. The Bank shall not surrender possession of
Property except upon properly authorized Instructions (as hereinafter defined)
of the Customer or as may be required by due process of applicable law.
3. IDENTIFICATION AND SEGREGATION OF ASSETS.
With respect to Property in the Custody Account:
(a) Except as otherwise provided in this Agreement, the Bank will
separately identify on its books and, to the extent practicable, segregate all
Property held pursuant to this Agreement by the Bank or any other entity
authorized to hold Property in accordance with Section 6 or 7 hereof.
(b) The Bank shall supply to the Customer from time to time as
mutually agreed upon a written statement with respect to all Property in the
Subcustody Account. In the event that the Customer does not inform the Bank in
writing of any exceptions or objections within thirty (30) days after the date
of such statement, the Customer shall be deemed to have approved such statement.
4. STANDARD OF CARE.
The Bank shall exercise the same standard of care that it exercises
over its own assets in the safekeeping, handling, servicing and disposition of
Property in accordance with this Agreement. The Bank will exercise the due care
expected of a professional custodian for hire with respect to Property in its
possession or control. The Bank shall not be responsible for any loss or damage
suffered by the Customer as a result of the performance of the Bank's duties
hereunder unless such loss or damage results from an act of negligence or
willful misconduct on the part of the Bank or on the part of a branch, affiliate
or subsidiary of the Bank acting as its agent or as a Foreign Custodian (as
hereinafter defined) pursuant to the terms of this Agreement; PROVIDED THAT, the
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liability of the Bank in connection with any Property shall not exceed the
Market Value of the Property, to which such loss or damage relates, at the time
of such negligence or willful misconduct. In no event shall the Bank be liable
to the Customer for indirect, special, consequential or general damages.
CITIBANK SECURITIES SERVICES
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The Bank shall be responsible for the acts or omissions of any Exempt
Subsidiary acting as a foreign subcustodian pursuant to an Exemptive Order to
the same extent as if the act or omission of such Exempt Subsidiary were that of
the Bank.
Except as otherwise provided above, the Bank shall use reasonable care
in selecting, and shall be responsible only for the proper selection of, any
foreign subcustodian or foreign depository.
Notwithstanding the above, neither the Bank nor its parent nor any of
its branches, subsidiaries or affiliates is responsible for any losses or
damages resulting from (a) reasons or causes beyond its control, including,
without limitation, nationalization, expropriation, currency restrictions, acts
of war, terrorism, insurrection, revolution, civil unrest, riots or strikes,
nuclear fusion or fission or acts of God and (b) other risk of loss for which
neither the Bank nor any foreign subcustodian would be liable under Rule 17f-5
promulgated under the Investment Company Act.
In the event the Customer enters into triparty repurchase agreements
pursuant to which collateral therefor is to be held by a custodian other than
the Bank and the Customer instructs the Bank to deliver Property to such
custodian, the Bank shall be under no duty to determine whether such custodian
satisfies the requirements of Section 17(f) of the Investment Company Act or the
Rules promulgated thereunder. Citibank shall have no further duties or
obligations under this Agreement with respect to such Property.
The Bank is not under any duty to supervise the investments of the
Customer, or to advise or make any recommendation to the Customer with respect
to the purchase or sale of any Securities or the investment of any funds. The
Customer shall have the sole and exclusive responsibility for the investment of
Property held hereunder.
5. PERFORMANCE BY THE BANK.
(a) General:
The Bank's performance of its duties hereunder and the day-to-day
operations of the Custody Account shall be in accordance with written service
standards as may be furnished to the Customer by the Bank from time to time.
Such service standards, as may be amended from time to time, are incorporated
herein by reference.
(b) Receipt, Delivery and Disposal of Securities:
The Bank shall, or shall instruct any other entity authorized to hold
Property in accordance with Section 6 or 7 hereof to, receive or deliver
Securities and credit or debit the Subcustody Account, in accordance with
properly authorized Instructions from the Customer. The Bank or such authorized
entity shall also receive in custody all stock dividends, rights and similar
securities issued in connection with Securities held hereunder, shall surrender
for payment, in a timely manner, all items maturing or called for redemption and
shall take such other action as the Customer may direct in properly authorized
Instructions.
(c) Trade Execution:
The Customer may from time to time place orders with the Bank to buy
or sell Securities. The Bank or any entity authorized to hold Property in
accordance with Section 7 hereof may, unless otherwise specified, refer each
such order to any broker or sub-agent of its choice, including an affiliate of
the Bank, and shall have no liability or responsibility whatsoever for any
error, neglect, or default of any such broker or sub-agent or for mutilations,
interruptions, omissions, errors or delays occurring in the mails, or on the
part of any telegraph, cable or wireless company, or any employee of such
company, or by reason of any cause beyond the Bank's control. In placing such
orders, the Customer may from time to time place special orders with the Bank
which will, as agent, undertake the purchase or sale of Securities as set out
above; provided that if the order is for the purchase or sale of obligations of
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the United States Government or its agencies, or state or municipal bonds, the
Bank may act as principal. The Customer agrees to provide specific Instructions
regarding the deposit or delivery of all such Securities to the Custody Account.
(d) Registration:
Securities held hereunder may be registered in the name of the Bank,
any entity authorized to hold Property in accordance with Section 6 or 7 hereof
or a nominee of the Bank or any such authorized entity, and the Customer shall
be informed upon request of all such registrations. Securities in registered
form will be transferred upon request of the Customer into such names or
registrations as it may specify in properly authorized Instructions.
(e) Cash Accounts:
(i) All cash received or held by the Bank or by any entity authorized
to hold Property in accordance with Section 7 hereof as interest, dividends,
proceeds from transfer, and other payments for or with respect to Securities
shall be (x) held in a cash account in accordance with properly authorized
Instructions of the Customer received by the Bank or (y) if specified in the
Customer's Instructions, converted to or from U.S. dollars and remitted to the
Customer. The Customer shall bear any foreign exchange risk in connection with
such conversion. In effecting any currency conversions hereunder, the Bank or
such entity may use such methods or agencies as it may see fit including the
Bank's facilities at customary rates.
(ii) The Customer agrees, with respect to the payment for all
purchases of Securities to be deposited in the Subcustody Account, that funds
for settlement will be on deposit by the settlement date at the location of
settlement, in good available funds and in the currency of settlement. The
Customer acknowledges that nothing in this Agreement shall obligate the Bank to
extend credit, grant financial accommodation or otherwise advance moneys to the
Customer for the purpose of making any such payments or part thereof or
otherwise carrying out any Instructions.
(iii) The Customer authorizes the Bank from time to time to cause the
branch of the Bank located in London, England ("Citibank London") to establish a
multicurrency cash account reflecting cash received by any Foreign Custodian on
the Customer's behalf. Citibank London will maintain such cash account in
accordance with the requirements of Section 7 hereof applicable to an entity
authorized to hold Property hereunder.
(f) Reports:
(i) If the Bank has in place a system for providing telecommunication
access or other means of electronic access by customers to the Bank's reporting
system for Property in the Subcustody Account, then, at the Customer's election,
the Bank may agree to provide the Customer with such instructions and passwords
as may be necessary in order for the Customer to have such direct access through
the Customer's terminal device. Such electronic access shall be restricted to
information relating to the Subcustody Account. If electronic access
to such reporting system is requested by the Customer, the Customer agrees to
assume full responsibility for the consequences of the use, including any misuse
or unauthorized use of the terminal device, instructions or passwords referred
to above and agrees to defend and indemnify the Bank and hold the Bank
CITIBANK SECURITIES SERVICES
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harmless from and against any and all liabilities, losses, damages, costs,
counsel fees, and other expenses of every nature suffered or incurred by the
Bank by reason of, or in connection with, such use by the Customer or others of
such terminal device, unless such liabilities, losses, damages, costs, counsel
fees and other expenses can be shown to be the result of negligent or wrongful
acts of the Bank. Further, in the event the Customer elects to have electronic
access, the Bank shall provide the Customer on each business day a report of the
preceding business day's transactions relating to the Subcustody Account and of
the closing or net balances of each business day. If the Customer should not
choose to have electronic access, the Bank shall provide the Customer with such
reports of transactions in the Subcustody Account by such means as may be
mutually agreed upon.
(ii) The Bank agrees to use reasonable efforts to furnish the Customer
with such information regarding Property held hereunder as the Customer may
reasonably request in connection with its complying with requests of any
regulatory authorities having jurisdiction over the Customer.
(iii) The Bank shall also, subject to restrictions under applicable
law, seek to obtain from any entity with which the Bank maintains the physical
possession of any Property in the Subcustody Account such records of such entity
relating to the Subcustody Account as may be required by the Customer or its
agents in connection with an internal examination by the Customer of its own
affairs. Upon a reasonable request from the Customer, the Bank shall use its
best efforts to furnish to the Customer such reports (or portions thereof) of
the external auditors of each such entity as relate directly to such entity's
system of internal accounting controls applicable to its duties under its
agreement with the Bank.
(g) Access:
During the Bank's regular banking hours and upon receipt of reasonable
notice directly from the Customer, any officer or employee of the Customer, any
independent accountant(s) selected by the Customer, and any person designated by
any regulatory authority having jurisdiction over the Customer shall be entitled
to examine on the Bank's premises Property held by the Bank on its premises and
the Bank's records regarding Property held hereunder or deposited with entities
authorized to hold Property in accordance with Section 6 or 7 hereof, but only
upon furnishing the Bank with properly authorized Instructions to that effect,
provided, such examination shall be consistent with the Bank's obligations of
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confidentiality to other parties.
The Bank's costs and expenses in facilitating such examinations shall
be borne by the Customer, provided that such costs and expenses shall not be
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deemed to include the Bank's costs in providing to the Customer: (i) the
"single audit report" of the independent certified public accountants engaged by
the Bank and (ii) such reports and documents as this Agreement contemplates that
the Bank shall furnish routinely to the Customer.
(h) Voting and Other Action:
(i) The Bank will transmit to the Customer upon receipt, and will
instruct any entities authorized to hold Property in accordance with Section 6
or 7 hereof to transmit to the Customer upon receipt, all financial reports,
stockholder communications, notices, proxies and proxy soliciting materials
received from issuers of Securities, and all information relating to exchange or
tender offers received from offerors with respect to Securities. Proxies will
be executed by the registered holder if the registered holder is other than the
Customer, but the manner in which the Securities are to be voted will not be
indicated. Neither the Bank nor any such authorized entity shall vote any
Securities or authorize the voting of any Securities or give any consent or take
any other action with respect thereto, except as otherwise provided herein.
(ii) In the event of tender offers, the Customer shall hand deliver,
telecopy or transmit via tested telex Instructions to the Bank as to the action
to be taken with respect thereto designating such Instructions as being related
to a tender offer. The Customer shall hold the Bank harmless from any adverse
consequences of the Customer's use of any other method of transmitting
Instructions relating to a tender offer.
(iii) The Customer agrees that if it gives an Instruction for the
performance of an act on the last permissible date of a period established by
the tender offer or to otherwise act, the Customer shall hold the Bank harmless
from any adverse consequences in connection with acting upon or failing to act
upon such Instructions.
(iv) The Bank is authorized to accept and open on the Customer's
behalf all mail or communications received by it or directed in its care.
6. AUTHORIZED USE OF U.S. DEPOSITORIES.
The Customer authorizes the Bank, for any Securities held
hereunder, to use the services of any United
States central securities depository permitted to perform such services for
registered investment companies and their custodians under Rule 17f-4
promulgated under the Investment Company Act, it deems appropriate, including,
but not limited to, The Depository Trust Company, the Participants Trust Company
and the Federal Reserve Book Entry System ("U.S. Depositories"). The Bank will
deposit Securities held hereunder with a U.S. Depository only in an account
which holds exclusively the assets of customers of the Bank.
7. AUTHORIZED USE OF FOREIGN CUSTODIANS.
(a) Authorization:
The Bank may cause Securities which are foreign securities within the
meaning of Rule 17f-5(c)(1) promulgated under the Investment Company Act
("Foreign Securities") and other Property in the Subcustody Account to be held
in such country or other jurisdiction as the Customer shall direct in properly
authorized Instructions. Subject to prior approval by the Customer, the Bank
may hold such Foreign Securities and other Property in subcustody accounts,
which shall be deemed part of the Subcustody Account and which have been
established by the Bank with (x) branches of "Qualified U.S. Banks", as defined
in Rule 17f-5(c)(3) promulgated under the Investment Company Act ("Branches"),
or (y) foreign custodians which satisfy the provisions of Rule 17f-5(c)(2)(i) or
(ii) promulgated under the Investment Company Act, or Exempt Subsidiaries or
other foreign custodians ("Exempt Foreign Custodians") which are exempt from
such provisions under an Exemptive Order or any other order or release issued by
the Securities and Exchange Commission, respectively (such Branches, Exempt
Foreign Custodians and Exempt Subsidiaries, collectively, "Eligible Foreign
Custodians"). Subject to prior approval by the Customer, the Bank or an Eligible
Foreign Custodian is authorized to hold Foreign Securities in an account with
any foreign securities depository or foreign clearing agency which in the Bank's
judgment satisfies the provisions of Rule 17f-5(c)(iii) or (iv) promulgated
under the Investment Company Act or which is exempt from such provisions under
an order, no-action letter or release issued by the Securities and Exchange
Commission ("Eligible Foreign Securities Depository"). Any Property held by an
Eligible Foreign Custodian or Eligible Foreign Securities Depository shall be
subject to applicable laws, regulations, decrees, orders, government acts,
restrictions, customs, procedures and market practices (the "Laws") (i) to which
such Eligible Foreign Custodian or Eligible Foreign Securities Depository is
subject (ii) as exist in the country
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in which such Property is held and (iii) of the country of the currency in which
the Property is denominated. In the event that the laws change in a way that
would prevent or limit the performance of duties and obligations by an Eligible
Foreign Custodian or Eligible Foreign Securities Depository, such duties and
obligations shall be superseded and neither the Bank nor its parent nor any
other of its branches, subsidiaries or affiliates shall be liable therefor or
for any damages in any way resulting from such prevented or limited performance.
The Customer acknowledges that, as is normally the case with respect to deposits
outside the United States, deposits with Citibank London and any other entity
authorized to hold Property pursuant to this Agreement are not insured by the
Federal Deposit Insurance Corporation.
(b) Provision of Information Regarding Foreign Custodians and
Securities Depositories:
The Bank shall use its best efforts to assist the Customer in
obtaining the following: (a) As to each country in which Property is held,
information concerning whether, and to what extent, applicable foreign law would
restrict the access afforded the Customer's independent public accountants to
books and records kept by a foreign custodian or foreign securities depository
used in that country; (b) As to each country in which Property is held,
information concerning whether, and to what extent, applicable foreign law would
restrict the Customer's ability to recover its assets in the event of the
bankruptcy of a foreign custodian or foreign securities depository used in that
country; (c)As to each country in which Property is held, information concerning
whether, and to what extent, applicable foreign law would restrict the Fund's
ability to recover assets that are lost while under the control of a foreign
custodian or foreign securities depository used in that country; (d) As to each
country in which Property is held, information concerning whether under
applicable foreign currency exchange regulations the Customer's cash and cash
equivalents held in that country are readily convertible to U.S. dollars; (e)
Information relating to whether each foreign custodian or foreign securities
depository used would provide a level of safeguards for maintaining the
Customer's Securities not materially different from that provided by the Bank in
maintaining the Securities in the United States; (f)Information concerning
whether each foreign custodian or foreign securities depository used has offices
in the United States in order to facilitate the assertion of jurisdiction over
and enforcement of judgments against such custodian or depository; and (g) As to
each foreign securities depository used, information concerning the number of
participants in, and operating history of, such depository. During the term of
this Agreement, the Bank shall use its best efforts to provide the Customer with
prompt notice of any material changes in the facts or circumstances upon which
any of the foregoing information or statements were based. Notwithstanding any
of the foregoing provisions of this subsection (b) of this Section 7, the Bank's
undertaking to assist the Customer in obtaining the information referred to in
this subsection (b) of this Section 7 shall neither increase the Bank's duty of
care nor reduce the Customer's responsibility to determine for itself the
prudence of entrusting its assets to any particular foreign custodian or foreign
securities depository.
(c) Segregation and Identification of Assets:
The Bank will deposit Property of the Customer with an Eligible
Foreign Custodian or Eligible Foreign Securities Depository only in an account
which holds exclusively the assets of customers of the Bank. In the event that
the Bank authorizes an Eligible Foreign Custodian to hold any Foreign Securities
placed in its care in an Eligible Foreign Securities Depository pursuant to the
provisions of subsection (a) of this Section 7, the Bank will direct such
Eligible Foreign Custodian to identify on its books such Foreign Securities as
being held for the account of the Bank as custodian for its customers.
(d) Instructions to Eligible Foreign Custodians and Eligible
Foreign Securities Depositories:
Any Property in the Subcustody Account deposited by the Bank with an
Eligible Foreign Custodian or Eligible Foreign Securities Depository will be
subject only to the instructions of the Bank or its agents; and any Foreign
Securities held in an Eligible Foreign Securities Depository for the account of
an Eligible Foreign Custodian will be subject only to the instructions of such
Eligible Foreign Custodian as subcustodian for the Bank.
(e) Contracts between the Bank and Exempt Subsidiaries
The Bank's contract with each Exempt Subsidiary provides: (i) an
acknowledgment by such Exempt Subsidiary that it is acting as a foreign
custodian for U.S. Investment Companies or their custodians pursuant to the
terms of the applicable Exemptive Order; and (ii) that the Customer is entitled
to enforce the terms of the subcustodian agreement between the Bank and the
Exempt Subsidiary and is entitled to seek relief directly against the Exempt
Subsidiary.
(f) Contracts between the Bank and Exempt Foreign Custodians.
The Bank's contract with each Exempt Foreign Custodian provides: (i)
an acknowledgment by such Exempt Foreign Custodian that it is acting as a
foreign custodian for U.S. Investment Companies or their custodians pursuant to
the terms of the applicable order or release issued by the Securities and
Exchange Commission; and (ii) a representation by such Exempt Foreign Custodian
that it is, and during the term of the contract will continue to be, in
compliance with the terms of the applicable order or release issued by the
Securities and Exchange Commission.
8. CITICORP GUARANTEE
Citicorp agrees that it shall be liable, in accordance with the terms
of a guarantee issued by it in compliance with the conditions of the Exemptive
Orders, for losses of Foreign Securities and cash incurred by the Customer
resulting from bankruptcy or insolvency of Exempt Subsidiaries operating
pursuant to the terms of the Exemptive Orders. Citicorp's obligations
hereunder, and under the guarantee shall terminate automatically with respect to
an Exempt Subsidiary at such time as such obligations are no loner required by
the conditions of the Exemptive Order. Obligations arising prior to the date of
such termination shall survive the termination.
9. USE OF AGENTS.
The Bank may, subject to applicable laws, rules and regulations,
appoint agents, whether in its name or that of the Customer, to perform any of
the duties of the Bank hereunder, and the Bank may delegate to any such agent so
appointed any of its functions under this Agreement.
10. INSTRUCTIONS.
(a) The Bank is authorized to rely and act upon written instructions
("Instructions") which are signed by persons ("Authorized Persons") named in a
list provided to the Bank from time to time, which list must be certified by the
Customer's Secretary or Assistant Secretary and include authenticated specimen
signatures of all Authorized Persons. Such list shall separately designate
those
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Authorized Persons who may authorize the withdrawal of Securities free of
payment, those Authorized Persons who may authorize the unconditional transfer
of funds and those Authorized Persons who may give Instructions by electronic
access as provided hereunder.
(b) The Customer agrees that the Bank is authorized to rely and act
upon such Instructions in accordance with this Section 10 and the Manual
Transmission Authorization attached hereto and incorporated herein by reference
(including each Manual Transmission Procedures attached thereto) to this
Agreement and to debit or credit the applicable account(s) of the Customer
accordingly and that such Manual Transmission Authorization and method(s) of
transmission are commercially reasonable.
(c) The Bank shall be entitled to rely upon the continued authority
of any Authorized Person to give Instructions until the Bank receives notice
from the Customer to the contrary; and the Bank shall be entitled to rely upon
any Instructions it believes in good faith to have been given by an Authorized
Person.
(d) The Bank is further authorized to rely upon any Instructions
received by any other means and identified as having been given or authorized by
any Authorized Person, regardless of whether such Instructions shall in fact
have been authorized or given by any of such Authorized Persons, provided that
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the Bank and the Customer shall have agreed upon the means of transmission and
the method of identification for such Instructions. Instructions received by
any other means shall include but shall not be limited to verbal Instructions
only in connection with delivery against payment or receipt against payment
transactions and transfers from one account within the Subcustody Account to
another account within the Subcustody Account and provided that such verbal
Instructions are promptly confirmed in writing by the Customer. Notwithstanding
the foregoing in the event that verbal Instructions are not subsequently
confirmed in writing as provided above, the Customer agrees to hold the Bank
harmless and without liability for any claims or losses in connection with such
verbal Instructions.
(e) The Customer agrees to be bound by any Instruction, whether or not
authorized, given to the Bank in its name and accepted by the Bank in accordance
with the provisions hereof (including but not limited to the Funds Transfer
Procedures and each Schedule A hereto) and further agrees to indemnify and hold
the Bank harmless from and against any loss, liability, claim or expense
(including legal fees and expenses) associated with the Bank's acting upon such
Instructions as provided herein, except such as may arise from the Bank's own
negligence, bad faith or willful misconduct.
(f) The Customer may appoint one or more investment managers
("Investment Managers") with respect to the Custody Account. The Bank is
authorized to act upon instructions received from any Investment Manager to the
same extent that the Bank would act upon the Instructions of an Authorized
Person, provided that the Bank has received written evidence of the Investment
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Manager's appointment, written confirmation from the Investment Manager
evidencing his acceptance of such appointment and written certification from the
Investment Manager of the names of individuals together with specimen signatures
of those authorized to give Instructions hereunder.
(g) If the Customer should choose to have telecommunication or other
means of electronic access to the Bank's reporting system for Property in the
Subcustody Account, pursuant to paragraph (f) of Section 5, the Bank is also
authorized to rely and act upon any Instructions received by it through a
terminal device, provided that such Instructions are accompanied by code words
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which the Bank has furnished to the Customer or an Authorized Person by any
method mutually agreed to by the Bank and the Customer, and provided that the
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Bank has not been notified by the Customer or any such Authorized Person to
cease to recognize such code words, regardless of whether such Instructions
shall in fact have been given or authorized by the Customer or any such
Authorized Person.
11. FEES AND EXPENSES.
Fees and expenses for the services rendered under this Agreement shall
be mutually agreed upon by the parties in writing. The Bank shall be entitled
to debit the Subcustody Account for such fees and expenses.
12. LIENS.
The Bank shall have a lien on the Property in the Subcustody Account
to secure payment of such fees and expenses for the services rendered under this
Agreement. If the Bank advances cash or Securities to the Customer for any
purpose or in the event that the Bank or its nominee shall incur or be assessed
any taxes, charges, expenses, assessments, claims or liabilities in connection
with the performance of its duties hereunder, except such as may arise from its
or its nominee's negligent action, negligent failure to act or willful
misconduct, any Property at any time held for the Subcustody Account shall be
security therefor and the Customer hereby grants to the Bank a security interest
therein. The Customer shall promptly reimburse the Bank for any such advance of
cash or Securities or any such taxes, charges, expenses, assessments, claims or
liabilities upon request for payment, but should the Customer fail to so
reimburse the Bank, the Bank shall be entitled to dispose of such Property to
the extent necessary to obtain reimbursement. The Bank shall be entitled to
debit and/or charge the Subcustody Account and/or the Customer, as the case may
be, in connection with any such advance and any interest on such advance as the
Bank deems reasonable.
13. TAX STATUS/WITHHOLDING TAXES.
(a) The Customer's U.S. Tax Identification Number is
___________________. If the Customer does not have a U.S. Tax Identification
Number, it will provide the Bank with information as to its tax status as
reasonably requested by the Bank from time to time.
(b) The Customer may be required from time to time to file such proof
of taxpayer status or residence, to execute such certificates and to make such
representations and warranties, or to provide any other information or
documents, as the Bank and/or an Eligible Foreign Custodian may deem necessary
or proper to fulfill the Bank's and/or Eligible Foreign Custodian's obligations
under applicable law. The Customer shall provide the Bank and/or Eligible
Foreign Custodian, in a timely manner, with copies of originals if necessary and
appropriate, or any such proofs of residence, taxpayer status, beneficial
ownership and any other information or documents which the Bank and/or an
Eligible Foreign Custodian may reasonably request.
(c) If any tax or other governmental charge or assessment shall
become payable with respect to any payment due to the Customer ("Taxes"), such
Taxes shall be withheld from such payment in accordance with applicable law.
The Bank and/or an Eligible Foreign Custodian may withhold any interest, any
dividends or other distributions or securities receivable in respect of
Securities, proceeds from the sale or distribution of Securities ("Payments"),
or may sell for the account of the Customer any part thereof or all of the
Securities, and may apply such Payment in satisfaction of such Taxes, the
Customer remaining liable for any deficiency. If any Taxes shall become payable
with respect to any payment made
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to the Customer by the Bank or an Eligible Foreign Custodian in a prior year,
the Bank and the Eligible Foreign Custodian may withhold Payments in
satisfaction of such prior year's Taxes. The Customer shall indemnify and hold
harmless the Bank and the Eligible Foreign Custodian, its officers, employees,
agents and affiliated companies against any Taxes, penalties, additions to tax,
and interest, and costs and expenses related thereto, arising out of claims
against the Bank and/or the Eligible Foreign Custodian by any governmental
authority for failure to withhold Taxes or arising out of any reclaim or refund
of taxes or other tax benefit obtained by the Bank or the Eligible Foreign
Custodian for the Customer.
(d) This Section 13 shall survive the termination of this Agreement
and continue in force until the time for assessment of all Taxes expires.
14. AMENDMENT.
This Agreement may not be amended except by mutual written
agreement among the parties hereto.
15. TERMINATION.
Any party may terminate this Agreement upon sixty (60) days'
written notice to the other party.
16. CONFIDENTIALITY.
Subject to the foregoing provisions of this Agreement and subject to
any applicable law, each party shall use best efforts to maintain the
confidentiality of matters concerning Property in the Subcustody Account.
17. NOTICES.
All notices and other communications hereunder, except for
Instructions and reports relating to the Property which are transmitted through
the Bank's reporting system for Property in the Subcustody Account, shall be in
writing, telex, fax or telecopy, or if verbal, shall be promptly confirmed in
writing, and shall be hand-delivered, telexed, faxed, telescoped or mailed by
prepaid first class mail (except that notice of termination, if mailed, shall be
by prepaid registered or certified mail) to each party at its address set forth
above, if to the Customer, marked "Attention:___________" and if to the Bank,
marked "Citibank as Subcustodian for_______________", or if to Citicorp, marked
"Attention of Office of Corporate Finance, Xxxxxxx X. Xxxxx, Vice President", or
at such other address as each party may give written notice of to the other
party.
18. ASSIGNMENT.
No party may assign, transfer or change all or any of its rights and
benefits hereunder without the written consent of the other. Any purported
assignments made in contravention of this Section shall be null and void and of
no effect whatsoever.
19. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO, THE
LAWS OF THE STATE OF NEW YORK AND THE PARTIES AGREE THAT XXX XXXXXX XX XXX XXXXX
XX XXX XXXX SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY SUIT, ACTION OR
PROCEEDING AND TO SETTLE ANY DISPUTES WHICH MAY ARISE OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, AND, FOR SUCH PURPOSES, EACH IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS.
20. MISCELLANEOUS.
(a) This Agreement may be executed in several counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
(b) This Agreement contains the entire agreement between the
Customer, Citicorp and the Bank relating to custody of Property and supersedes
all prior agreements on this subject.
(c) The captions of the various sections and subsections of this
Agreement have been inserted only for the purposes of convenience, and shall not
be deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized.
CITIBANK, N.A. PNC BANK, National Association
By: /s/ Xxxxx X. Armenia By: /s/ Xxxxx X. Xxxxx
--------------------- ------------------
Name: Xxxxx X. Armenia Name: Xxxxx X. Xxxxx
------------------- ----------------
Title: Title:
------------------ ----------------
Attest: Attest:
--------------- ----------------
CITIBANK SECURITIES SERVICES
----------------------------
CITICORP
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
-------------------
Title: Vice President
------------------
Attest:
-----------------
RIDER TO SUBCUSTODIAL SERVICES AGREEMENT
(the "Agreement")
dated as of October 1, 1996
among CITIBANK, N.A. as Subcustodian, CITICORP
and PNC BANK, NATIONAL ASSOCIATION
The parties to the Agreement agree, effective as of October 1, 1996 to the
modification and/or amendments to the Agreement as follows:
1. The first WHEREAS clause of the Agreement is hereby amended by restating
clause (a) of such clause as follows:
"open and maintain a separate subcustody account with the Bank (the
"Subcustody Account") to hold certain property ("Property") including, but
not limited to, stocks, bonds, or other securities ("Securities"), funds
and other property held by the Customer as custodian for the International
Bond Portfolio of the Compass Capital Funds (the "Fund"),"
2. Section 3 of the Agreement is hereby amended by restating such Section in
its entirety as follows:
"(a) Except as otherwise provided in this Agreement, the Bank will
separately identify on its books all Property and segregate all physical
Property held pursuant to this Agreement by the Bank or any other entity
authorized to hold Property in accordance with Section 6 or 7 hereof.
(b) The Bank shall supply to the Customer from time to time as mutually
agreed upon a written statement with respect to all Property in the
Subcustody Account, including an identification of the entity having
possession of such Property, and the Bank will send to the Customer an
advice or notification of any transfers of Property to or from the
Subcustody Account, indicating as to any Property acquired the identity of
the entity having physical possession of such Property. In the event that
the Customer does not inform the Bank in writing of any exceptions or
objections within sixty (60) days after the date of such statement, the
Customer shall be deemed to have approved such statement."
3. Section 4 of the Agreement is hereby amended by inserting after the second
sentence of the first paragraph of such Section the following:
"Further, the Bank shall use reasonable care in the performance of the
recordkeeping services set forth in Section 5 hereof."
4. Section 4 of the Agreement is hereby further amended by restating the
third sentence of the first paragraph of such Section as follows:
1
"The Bank shall reimburse and pay the Customer for any loss or damage
suffered by the Customer as a result of the performance of the Bank's
duties hereunder where such loss or damage results from an act of
negligence or willful misconduct on the part of the Bank or on the part of
a branch, affiliate or subsidiary of the Bank acting as its agent or as an
Eligible Foreign Custodian (as hereinafter defined) pursuant to the terms
of this Agreement or on the part of any of the other foreign custodians
listed on Exhibit A to this Agreement; provided that, the liability of the
Bank in connection with any loss of Property shall not exceed the fair
market value of the Property,
to which such loss or damage relates, at the time of such negligence or
willful misconduct. This obligation to reimburse and pay the Customer
shall survive the termination of this Agreement."
5. Section 4 of the Agreement is hereby amended by restating the fourth
paragraph of such Section in its entirety as follows:
"Notwithstanding the above, neither the Bank nor its parent nor any of its
branches, subsidiaries or affiliates is responsible for any losses or
damages resulting from reasons or causes beyond its control, including,
without limitation, nationalization, changes in Laws (as defined in
Section 7(a)), expropriation, currency restrictions, acts of war,
terrorism, insurrection, revolution, civil unrest, riots or strikes,
nuclear fusion or fission or acts of God."
6. Section 4 of the Agreement is hereby amended by restating the sixth
paragraph of such Section as follows:
"The Bank is not under any duty to supervise the investments of the
Property, or to advise or make any recommendation with respect to the
purchase or sale of any Securities or the investment of any funds."
7. Section 5(a) of the Agreement is hereby amended by inserting after the
second sentence of such Section the following:
"Such service standards shall not in any way serve to diminish the Bank's
standard of care provided for herein."
8. Section 5 of the Agreement is hereby amended by restating the second
sentence of subsection (b) of such Section as follows:
"The Bank or such authorized entity shall also receive in custody all
stock dividends, rights and similar securities issued in connection with
Securities held hereunder, shall surrender for payment in a timely manner,
all items maturing, retired, called for redemption or that otherwise
become payable and shall take such other action as the Customer may direct
in properly authorized Instructions."
9. Section 5 of the Agreement is hereby further amended by restating
subsection (c) of such Section in its entirety as follows:
"Intentionally Omitted."
2
Section 5 of the Agreement is hereby further amended by adding at
the end of subsection (d) of such Section the following:
Until the Bank receives Instructions from an Authorized Person to the
contrary, the Bank will, or will instruct any other entity authorized to
hold Property in accordance with Section 6 or 7 hereof to: (a) promptly
collect all income and other payments payable with respect to Securities
held hereunder for the Customer and credit such income, as collected, to
the Subcustody Account. The Bank or any other applicable entity
authorized to hold Property in accordance with Section 6 or 7 hereof shall
do all things necessary and proper in connection with such prompt
collections and, without limiting the foregoing, the Bank or such
authorized entity will: (i) present for payment all coupons and other
income items requiring presentations; and (ii) endorse and deposit for
collection, in the name of the Customer, checks, drafts or other
negotiable instructions; (b) in respect of Securities in a Subcustody
Account, execute in the name of the Customer or such other name as the
Customer may direct the Bank such ownership and other certificates as may
be required to obtain payments in respect thereof; (c) exchange interim
receipts or temporary Securities in a Subcustody Account for definitive
Securities; (d) where any Securities held in any Eligible Foreign
Securities Depository are called for a partial redemption by the issuer of
such Securities, allot the called portion to the respective holders in any
manner deemed to be fair and equitable in the Bank's or such authorized
entity's judgment; and (e) subject to the prior receipt of all
documentation required by applicable law (as requested by the Bank), pay
or cause to be paid any and all taxes and levies in the nature of taxes
imposed on the Property in the Subcustody Account by any governmental
authority and use reasonable efforts to reclaim any foreign withholding
tax relating to any such Property.
11. Section 5(e)(iii) of the Agreement is hereby amended by inserting the word
"Eligible" before the reference to "Foreign Custodian" included in the
first sentence of such subsection.
12. Section 5 of the Agreement is hereby further amended by restating
subsection (f) of such Section in its entirety as follows:
"(i) If the Bank has in place a system for providing telecommunication
access or other means of electronic access by customers to the Bank's
reporting system for Property in the Subcustody Account, then, at the
Customer's election, the Bank may agree to provide the Customer with such
Instructions and passwords as may be necessary in order for the Customer
to have such direct access through the Customer's terminal device. Such
electronic access shall be restricted to information relating to the
Subcustody Account. If electronic access to such reporting system is
requested by the Customer, the Customer agrees to assume full
responsibility for the consequences of the misuses or unauthorized use by
it of the terminal device, instructions or passwords referred to above and
agrees to defend and indemnify the Bank and hold the Bank harmless from
and against any and all liabilities, losses, damages, costs, counsel fees,
and other expenses of every nature suffered or incurred by the Bank by
reason of, or in connection with, such misuse or unauthorized use by the
Customer or any person not affiliated with the Customer but having legal
access to the premises of the Customer of such terminal device, unless
such liabilities, losses, damages, costs, counsel fees or other expenses
can be shown to be the result of negligent or wrongful acts of the Bank.
Such indemnity shall apply only to the extent of the Bank's direct damages
and expenses, without reference to any special or consequential conditions
or circumstances. Further, in the event the Customer elects to have
electronic access, the Bank shall provide the Customer on each business
day a report of the preceding business day's transactions relating to the
Subcustody Account and of the closing or net balances of each business
day. If the Customer should not choose to have electronic access, the
Bank shall provide the Customer with such reports of transactions in the
Subcustody Account by such means as may be mutually agreed upon.
3
(ii) The Bank agrees to use reasonable efforts to furnish the Customer
with such information regarding Property held hereunder and regarding its
system of internal accounting controls as the Customer may reasonably
request."
(iii) The Bank shall also, subject to restriction under applicable law,
seek to obtain from any entity with which the Bank maintains any Property
in the Subcustody Account such records of such entity relating to the
Subcustody Account as may be required by the Customer or its agents in
connection with an internal examination by the Customer or the Fund of its
respective affairs. Upon a reasonable request from the Customer, the Bank
shall use its best efforts to furnish to the Customer such reports (or
portions thereof) of the external auditors of each such entity as relate
directly to such entity's system of internal accounting controls
applicable to its duties under its agreement with the Bank."
13. Section 5(g) of the Agreement is hereby amended by restating the first
paragraph of such Section as follows:
"During the Bank's regular banking hours and upon receipt of reasonable
notice directly from the Customer, any officer or employee of the Customer
or the Fund at the instruction of the Customer, any independent
accountant(s) selected by the Customer, and any person designated by any
regulatory authority having jurisdiction over the Customer or the Fund
shall be entitled to examine on the Bank's premises Property held by the
Bank on its premises and the Bank's records regarding Property held
hereunder or deposited with entities authorized to hold Property in
accordance with Section 6 or 7 hereof, but only upon furnishing the Bank
with properly authorized Instructions to that effect, provided, such
examination shall be consistent with the Bank's obligations of
confidentiality to other parties. The Bank shall endeavor, upon the
request of the Customer, to provide copies of information examined
pursuant to the preceding sentence to the extent permitted by the Bank's
obligations of confidentiality to other persons and by applicable law and
regulation."
14. Section 5(g) is hereby further amended by deleting the phrase "to the
Customer" included at the end of the second paragraph of such Section.
15. Section 5(h)(ii) of the Agreement is hereby further amended by inserting
the phrase "(including facsimile transmissions)" after the term "telecopy"
included in such Section.
16. Section 5(h)(iii) of the Agreement is hereby amended by restating such
subsection in its entirety as follows:
"The Customer agrees that if it gives an Instruction for the performance
of an act on the last permissible date of a period established by the
tender offer or to otherwise act, the Customer shall hold the Bank
harmless from any adverse consequences in connection with acting upon or
failing to act upon such Instruction, provided the Bank complies with the
standard of care set forth herein."
17. Section 5 of the Agreement is hereby amended by adding to the end of such
Section the following:
"(i) RECORDKEEPING:
The Bank shall prepare and maintain such accounts, books and records as
agreed upon by the Bank and the Customer from time to time, including such
accounts, books, records with respect to the Customer's allocations and
other accounts, books and records as are set forth on Exhibit B hereto
("Reports"), and shall send or cause to be sent Reports or other
communications to clients of the Customer as the Customer may reasonably
instruct the Bank from time to time. The Bank is hereby authorized and
instructed, as agent for the Customer, to affix to and
4
include in connection with such Reports the name or logo of the Customer
or any other xxxx or symbol owned by or associated with the Customer and
to use any letterhead or material provided by the Customer which includes
the name or logo of the Customer or any other xxxx or symbol owned by or
associated with the Customer, as the Customer may direct the Bank from
time to time. The Customer hereby indemnifies the Bank from and against
any and all losses, claims, damages, liabilities or expenses (including
without limitation, reasonable charges, fees and expenses of counsel)
arising out of or in connection with the performance of the recordkeeping
services to be provided hereby, including the use of the name or logo of
the Customer and any other xxxx or symbol owned by or associated with the
Customer; provided however, that the Bank shall not be indemnified for any
losses, claims, damages, liabilities or expenses arising out of the Bank's
own willful misfeasance, bad faith or negligence; and provided further
that in any event such indemnity shall apply only to the extent of the
Bank's direct losses claims, damages, liabilities or expenses, without
reference to any special or consequential conditions or circumstances.
Notwithstanding the provisions of Section 4 of this Agreement, the Bank
shall be liable to the Customer for any direct loss, liability, expense,
claim or demand that may occur as a result of the Bank's willful
misconduct, negligence or bad faith in connection with its duties and
responsibilities under this Section 5(i), and shall reimburse and pay the
Customer for any such loss, liability, expense, claim or demand; provided
that in no event shall the Bank be liable to the Customer for indirect,
special, consequential or general damages.
The Bank shall have no responsibility whatsoever to see the proper
implementation or use of any reports furnished by the Bank hereunder. The
Customer is responsible for reviewing all reports provided hereunder upon
receipt thereof and notifying the Bank within sixty (60) days after
receipt thereof by the Customer of any errors or discrepancies in such
reports.
Any request by the Customer for additional recordkeeping services shall be
provided to the Bank in writing."
18. Section 6 of the Agreement is hereby amended by restating such Section in
its entirety as follows:
"The Customer authorizes the Bank, for Securities held hereunder, to use
the services of any United States central securities depository approved
by the Customer and that is permitted to perform such services for
registered investment companies and their custodians under Rule 17f-4
promulgated under the Investment Company Act, including, but not limited
to, the Federal Reserve Book Entry System ("U.S. Depositories"). The Bank
will deposit securities held hereunder with a U.S. Depository only in an
account which holds exclusively the assets of customers of the Bank."
19. Sections 7(a) and (b) of the Agreement are hereby amended by restating
such Sections in their entirety as follows:
"The Bank may cause Securities which are foreign securities within the
meaning of Rule 17f-5(c)(1) promulgated under the Investment Company
Act ("Foreign Securities") and other Property in the Subcustody Account
to be held in such country or other jurisdiction as the Customer shall
direct in properly authorized Instructions. Subject to prior approval
by the Customer, the Bank may hold such Foreign Securities and other
Property in subcustody accounts, which shall be deemed part of the
Subcustody Account and which have been established by the Bank with (x)
branches of "Qualified U.S. Banks", as defined in Rule 17f-5(c)(3)
promulgated under the Investment Company Act ("Branches"), or (y)
foreign custodians which satisfy the provisions of Rule 17f-5(c)(2)(i)
or (ii) promulgated under the Investment Company Act, or (z) Exempt
Subsidiaries or other foreign custodians ("Exempt Foreign Custodians")
which are exempt from such provisions under an Exemptive Order or any
other order, no action letter or release applicable to the Bank
5
issued by the Securities and Exchange Commission (such Branches,
foreign custodians satisfying Rule 17f-5 (c)(2)(i) or (ii), Exempt
Foreign Custodians and Exempt Subsidiaries, collectively, "Eligible
Foreign Custodians"). Subject to prior approval by the Customer, the
Bank or an Eligible Foreign Custodian is authorized to hold Foreign
Securities in an account with any foreign securities depository or
foreign clearing agency which in the Bank's reasonable judgment
satisfies the provisions of Rule 17f-5(c)(iii) or (iv) promulgated
under the Investment Company Act or which is exempt from such
provisions under an order, no-action letter or release applicable to
the Bank issued by the Securities and Exchange Commission ("Eligible
Foreign Securities Depository"). In the case of any revision to Rule
17f-5, any successor conditions to qualification as an "eligible
foreign custodian" as defined in Rule 17f-5 will be substituted in the
place of the above-referenced provisions. Any Property held by an
Eligible Foreign Custodian or Eligible Foreign Securities Depository
shall be subject to applicable laws, regulations, decrees, orders,
government acts, restrictions, customs, procedures and market practices
(the "Laws") (i) to which such Eligible Foreign Custodian or Eligible
Foreign Securities Depository is subject (ii) as exist in the country
in which such Property is held and (iii) of the country of the currency
in which the Property is denominated. The Customer acknowledges that,
as is normally the case with respect to deposits outside the United
States, deposits with Citibank London and any other entity authorized
to hold Property pursuant to this Agreement are not insured by the
Federal Deposit Insurance Corporation.
(b) Provision of Information Regarding Foreign Custodians and
Securities Depositories:
To the extent an investment company's board of directors or
its designee may reasonably consider any of the information listed
below in connection with its compliance with Rule 17f-5, the Bank shall
provide to the Customer, or at the direction of the Customer, to the
Fund: (i) As to each country in which Property is held, information
concerning whether, and to what extent, applicable foreign law would
restrict the access afforded the Customer's (or at the direction of the
Customer, the Fund's) independent public accountants to books and
records kept by a foreign custodian or foreign securities depository
used in that country; (ii) As to each country in which Property is
held, information concerning whether, and to what extent, applicable
foreign law would restrict the Customer's ability (on behalf of the
Fund) to recover any of the Property in the event of the bankruptcy of
a foreign custodian or foreign securities depository used in that
country; (iii) As to each country in which Property is held,
information concerning whether, and to what extent, applicable foreign
law would restrict the Customer's ability (on behalf of the Fund) to
recover assets that are lost while under the control of a foreign
custodian or foreign securities depository used in that country; (iv)
As to each country in which Property is held, information concerning
whether under applicable foreign currency exchange regulations the cash
and cash equivalents held in that country are readily convertible to
U.S. dollars; [(v) Information relating to whether each foreign
custodian's or foreign securities depository'sused would provide a
level of safeguards for maintaining the Property] not materially
different from that provided by the Bank in maintaining Property in the
U.S.; (vi) Information concerning whether each foreign custodian or
foreign securities depository used has offices in the United States in
order to facilitate the assertion of jurisdiction over and enforcement
of judgments against such custodian or depository; (vii) As to each
foreign securities depository used, information concerning the number
of participants in, and operating history of, such depository. The Bank
shall use its best reasonable efforts to provide any additional
information reasonably requested by the Customer (excluding information
concerning the likelihood of expropriation, nationalization, freezes or
confiscation of assets in any country in which the Property is held).
During the term of this Agreement, the Bank shall use its best efforts
to provide the Customer and the Fund, at the Customer's direction, with
prompt notice of any material changes in the facts or circumstances
upon which any of the foregoing information or statements were based.
Notwithstanding any of the foregoing provisions of this
6
subsection (b) of this Section 7, the Bank's undertaking to provide to
the Customer, or at the direction of the Customer to the Fund, the
information referred to in this subsection (b) of this Section 7 shall
neither increase the Bank's duty of care (as otherwise provided for
herein) nor reduce any other entity's responsibility to determine for
itself the prudence of entrusting its assets to any particular foreign
custodian or foreign securities depository."
20. Section 7(c) of the Agreement is hereby amended by deleting from the first
sentence of such Section the phrase "of the Customer".
21. Section 7 of the Agreement is hereby further amended by adding at the end
of such Section the following:
"(g) Freedom From Liens, etc. and Free Transferability:
Any agreement that may be entered into with an Eligible Foreign
Custodian or Eligible Foreign Securities Depository with respect to the
maintenance of Property hereunder shall require that (i) such Property is
not subject to any right, charge, security interest, lien or claim of any
kind in favor of such entity or its creditors, except a claim of payment
for its safe custody or administration and (ii) beneficial ownership of
such Property is freely transferable without the payment of money or value
other than for safe custody or administration.
"(h) Procedures of Eligible Foreign Custodians and Eligible Foreign
Securities Depositories: [To be agreed]
In utilizing any foreign custodian, the Bank warrants that the
established procedures to be followed by each Eligible Foreign Custodian
holding Property pursuant to this Agreement address relevant control
issues for such Property and provide internal controls and procedures that
are adequate to provide reasonable protection for the Property.
In addition to, and not in amplification of, the provisions of Section
4 and the last sentence of Section 7(b) of the Agreement, in utilizing any
foreign depository, the Bank complies with the guidelines of OCC Banking
Circular BC-235 with respect to each Eligible Foreign Securities
Depository and has in place and utilizes its own internal controls and
procedures to assess whether the Eligible Foreign Securities Depository is
appropriately safekeeping the Property."
22. Section 9 of the Agreement is hereby amended by restating such Section in
its entirety as follows:
"Except as specifically provided herein, the Bank shall not appoint agents
to perform any of the duties of the Bank hereunder. Notwithstanding the
foregoing, the Bank shall not be prohibited from using Clearance Systems
as provided for in Sections 6 and 7 hereof, Market Infrastructure Entities
and Transport Systems (in each case as defined in the following sentence).
As used herein, "Clearance Systems" shall mean U.S. Depositories and
Foreign Securities Depositories; "Market Infrastructure Entities" shall
mean public utilities and public postal services not affiliated with the
Bank; "Transport Systems" shall mean any courier, messenger or other
similar transport system not affiliated with the Bank and reasonably
selected by the Bank."
23. Section 10(a) of the Agreement is hereby amended by inserting the phrase
"or at the direction of the Customer, the Fund's" immediately preceding
the word "Secretary" included in the first sentence of such Section.
7
24. Section 10(c) is hereby amended by inserting the term "reasonably"
immediately preceding the term "believes" included in such Section.
25. Section 10(d) is hereby amended by inserting at the end of the first
sentence of such Section the following:
"and provided that the Bank reasonably believes in good faith that such
Instructions have been provided by an Authorized Person."
26. Section 10(d) of the Agreement is hereby amended by restating the last
sentence of such Section as follows:
"Notwithstanding the foregoing in the event the verbal Instructions are
not subsequently confirmed in writing as provided above, the Customer
agrees to hold the Bank harmless and without liability for any claims or
losses in connection with the failure to confirm such verbal Instructions,
provided such failure does not arise out of or result from the negligence
or willful misconduct of the Bank."
27. Section 10(e) of the Agreement is hereby amended by replacing the
reference to "Funds Transfer Procedures and each Schedule A hereto" with
the phrase "Manual Transmission Procedures".
28. Section 10(e) is hereby amended by adding at the end of such Section the
following:
"Such indemnity shall apply only to the extent of the Bank's direct
damages and expenses, without reference to any special or consequential
conditions or circumstances."
29. Section 10(f) of the Agreement is hereby amended by restating such Section
in its entirety as follows:
"Intentionally omitted."
30. Section 11 of the Agreement is hereby amended by deleting the second
sentence included in such Section.
31. Section 12 of the Agreement is hereby amended by restating such Section in
its entirety as follows:
"Intentionally Omitted."
32. Section 13(c) of the Agreement is hereby amended by restating such Section
in its entirety as follows:
"If any tax or other governmental charge or assessment shall become
payable with respect to any payment due to the Customer ("Taxes"), such
Taxes shall be withheld from such payment in accordance with applicable
law. The Bank and/or an Eligible Foreign Custodian may withhold any
interest, any dividends or other distributions or securities receivable
in respect of Securities, proceeds from the sale or distribution of
Securities ("Payments"), and may apply such Payment in satisfaction of
such Taxes, the Customer remaining liable for any deficiency. If any
Taxes shall become payable with respect to any payment made to the
Customer by the Bank or an Eligible Foreign Custodian in a prior year,
the Bank and the Eligible Foreign Custodian may withhold Payments in
satisfaction of such prior year's Taxes. The Customer shall indemnify
and hold harmless the Bank against any Taxes, penalties, additions to
tax, and interest, and costs and expenses related thereto, arising out
of claims against the Bank (on its own behalf or on behalf of the
Eligible Foreign Custodian) by any governmental authority for failure
to withhold Taxes or arising out of any reclaim or refund
8
of taxes or other tax benefit obtained by the Bank or the Eligible
Foreign Custodian for the Customer, provided that the Bank (and the
Eligible Foreign Custodian) has not acted negligently or with willful
misconduct in connection with any such withholding, reclaim or refund,
and in any event only to the extent of the Bank's direct damages and
expenses (including penalties and interest imposed by the applicable
taxing or other regulatory authority) without reference to any special
or consequential conditions or circumstances "
33. The Agreement is further amended by amending the second line of Section
19 by replacing the phrase "of the State in" with the phrase "in the
State of".
34. The Agreement is further amended by adding after Section 20
of the Agreement the following new Sections 21 and 22:
"21. CONTRACTUAL SETTLEMENT AND ASSURED INCOME PAYMENT SERVICE
(a) With respect to any transaction involving Property held
in or to be acquired for the Subcustody Account, the Bank may in its
absolute discretion, but subject to applicable law, cause the Client
Cash Account to be credited on a contractual settlement date with the
proceeds of any relevant sale or exchange of Property from the
Subcustody Account, and to be debited on a contractual settlement date
for the cost of any relevant Property purchased or acquired for the
Subcustody Account and/or cause the Subcustody Account to be credited
or debited, as the case may be, on a contractual settlement date,
PROVIDED THAT (i) the Bank may reverse any credit or debit if it
determines in its absolute discretion that the transaction with respect
to which the credit or debit was made has failed, or the Bank fails to
receive any cash or property within a reasonable time after such
contractual settlement date, for any reason whatsoever, and (ii) if any
Property delivered pursuant to this Section 21 is returned by the
recipient thereof, the Bank may cause any credit and debit relating
thereto to be reversed at any time. The Customer shall repay on demand
any overdraft that arises as a result of any such reversal.
With respect to any transactions as to which the Bank does
not determine to credit or debit the Client Cash Account on such
contractual settlement date the proceeds from the sale or exchange of
Property will be credited and the cost of Property purchased or
acquired will be debited to the Client Cash Account on the date the
proceeds in available funds or such Property are actually received by
the Bank.
(b) The Bank may, in its absolute discretion, offer the
Customer an Assured Income Payment Service in respect of specific
Securities, as may be notified by the Bank to the Customer from time to
time. In relation to any such Securities, the Bank may in its absolute
discretion, cause the Client Cash Account to be credited with an
Assured Payment on the Assured Payment Date relevant thereto, PROVIDED
THAT the Bank shall be entitled to reverse any credit (in whole or in
part) made in respect of that Assured Payment if the Bank fails to
receive the full amount corresponding to such Assured Payment within a
reasonable time, as determined by the Bank in its absolute discretion,
after the relevant Assured Payment Date, for any reason whatsoever
other than as a result of the negligence, bad faith or willful default
of the Bank. The Customer shall repay on demand any overdraft that
arises as a result of any such reversal.
The Assured Income Payment Service shall be provided by the
Bank in accordance with the Assured Income Payment Standards.
9
For purposes of the foregoing; the following definitions will apply:
"Assured Income Payment Service" means the Bank's services
in which interest, dividends or other such periodic income, to which
the Customer (on behalf of the Fund) is entitled, on Securities
specified by the Bank from time to time at its absolute discretion, are
credited to the Client Cash Account in respect of such Securities.
"Assured Income Payment Standards" means the terms and
conditions governing the Assured Income Payment Service, as such terms
and conditions are amended and/or supplemented from time to time by,
and at the absolute discretion of, the Bank, but none of which terms
and conditions will contravene any of the terms and conditions set
forth herein.
"Assured Payment" means, in relation to those Securities
specified by the Bank under the Assured Income Payment Service, an
amount equal to the interest, dividends or periodic income that is due
to the Customer (on behalf of the Fund) in respect of such Securities
less any taxes, duties, levies, charges or any other withholding
payments payable in respect of such interest, dividends or periodic
income.
"Assured Payment Date" means, in relation to the payment of
any interest, dividend or periodic income of any particular Securities
specified by the Bank under the Assured Income Payment Service, the
date on which such interest, dividend or periodic income is normally
payable in respect of such Securities or such other date as may be
notified by the Bank to the Customer from time to time.
22. THIRD PARTY BENEFICIARY RIGHTS.
The Fund is hereby made third-party beneficiary of this
Agreement, and subject to terms of this Section 22, is entitled to
enforce the terms of this Agreement or seek relief directly against the
Bank to extent of its interest in the Property. Notwithstanding the
foregoing, the Fund shall not be entitled to any rights under the
preceding sentence unless and until (i) the Customer has first taken
enforcement action or sought relief against the Bank and (ii) such
actions by the Customer have not, in the Fund's reasonable discretion,
resulted in a satisfactory resolution to any relevant claim.
For any single event, the Bank shall not be responsible for any amount
in excess of the amount it would have been responsible for if it had
been responsible to only the Customer hereunder.
35. The Agreement is hereby amended by adding the attached annexes as
"Exhibit A" and "Exhibit B" to the Agreement.
36. This Rider shall be governed by, and construed according to, the laws of
the State of New York and the parties agree that the courts in the State of
New York shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any disputes which may arise out of or in
connection with this Rider, and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts. This Amendment
may be executed in several counterparts, each of which shall be an
original, but all of which shall constitute one and the same instrument.
All other terms of the Agreement shall remain the same.
CITIBANK, N.A. PNC BANK, NATIONAL ASSOCIATION
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By: /s/ Xxxxx X. Armenia By: /s/ Xxxxx X. Xxxxx
----------------------- -------------------------
Name: Xxxxx X. Armenia Name: Xxxxx X. Xxxxx
--------------------- -----------------------
Title: Vice President Title: Senior Vice President
-------------------- ----------------------
CITICORP
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
---------------------
Title: Vice President
--------------------
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EXHIBIT A
CUSTODIAN LOCATION
--------- --------
Generale de Banque Belgium
Den Danske Bank Denmark
Xxxxxx Bank Finland
Christiana Bank Norway
Skandinaviska Enskilda Bankan Sweden
Barclays Bank (Botswana) Botswana
Bank Haopolim Israel
First National Bank of South Africa South Africa
Barclays Bank (Zimbabwe) Zimbabwe
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EXHIBIT B
REPORTS
-------
PORTFOLIO VALUATION SUMMARY
PORTFOLIO VALUATION REPORT
ANALYSIS OF INTEREST/INCOME
REALISED GAIN AND LOSS REPORT
TRADE DATE TRANSACTION REPORT
OUTSTANDING SETTLEMENTS
ACCRUED DIVIDENDS REPORT
INCOME RECEIVED REPORT
FX EXCHANGE TRANSACTION REQUEST
FOREIGN CURRENCY UNDER COMMITMENT
CASH ACCOUNT STATEMENT
EXPENSE SUMMARY REPORT
A description of each report is attached hereto. A form of each report has
been separately provided.
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