Exhibit (g)(2)
FORM OF
CUSTODIAN AND INVESTMENT ACCOUNTING AGREEMENT
This Agreement is made effective the 1st day of November, 2001, by and
between EACH OF THE FUNDS SET FORTH ON EXHIBIT A HERETO, each a business trust
or corporation organized and existing under the laws of the jurisdiction listed
on Exhibit A (each a "FUND"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company ("STATE STREET"),
WITNESSETH:
WHEREAS, Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, Fund intends that this Agreement be applicable to each of its
series existing on the date hereof (such series together with all other series
subsequently established by Fund and made subject to this Agreement in
accordance with Section 16.2, be referred to herein as the "PORTFOLIO(S)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
XXXXXXX 0 XXXXXXXXXXX XX XXXXX XXXXXX AS CUSTODIAN AND RECORDKEEPING AGENT. Fund
hereby appoints State Street as the custodian of the assets of the Portfolios,
including securities that Fund, on behalf of the applicable Portfolio, desires
to be held in places within the United States ("DOMESTIC SECURITIES") and
securities it desires to be held outside the United States ("FOREIGN
SECURITIES"). Fund, on behalf of the Portfolio(s), agrees to deliver to State
Street all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of Fund representing interests in the Portfolios ("SHARES") as may be
issued or sold from time to time. State Street shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
State Street.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 6
hereof), State Street shall on behalf of the applicable Portfolio(s) from time
to time appoint one or more sub-custodians located in the United States, but
only in accordance with an applicable vote by the Board of Trustees or Directors
of Fund (the "BOARD") on behalf of the applicable Portfolio(s). State Street may
appoint as sub-custodian for Fund's foreign securities on behalf of the
applicable Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto, but only in accordance with
the applicable provisions of Sections 3 and 4. State Street shall have the same
responsibility or liability to Fund on account of any actions or omissions of
any sub-custodian so appointed that State Street would have if State Street had
not retained such sub-custodian.
Fund hereby appoints State Street as agent to perform certain investment
accounting and recordkeeping functions relating to portfolio transactions
required of a duly registered
investment company under Rule 31a of the Investment Company Act of 1940, as
amended and the rules promulgated thereunder, including without limitation Rules
31a-1, 31a-2 and 31a-3 (the "1940 ACT") and to calculate the net asset value of
the Portfolio(s) in accordance with the provisions of Section 9 hereof.
SECTION 2 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY OF FUND HELD BY STATE
STREET IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. State Street shall hold and physically
segregate for the account of each Portfolio all non-cash property to be held by
it in the United States, including all domestic securities other than securities
which are maintained pursuant to Section 2.8 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the U.S.
Department of the Treasury (each, a "U.S. SECURITIES SYSTEM").
SECTION 2.2 DELIVERY OF SECURITIES. State Street shall release and deliver
domestic securities held by State Street or in a U.S. Securities System account
of State Street only upon receipt of Proper Instructions on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to
State Street;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee(s) of State Street or
into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a different
number of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided that, in any
such case, the new securities are to be delivered to State Street;
7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, State Street shall have no responsibility or
liability for any loss arising from the delivery of such securities
prior to receiving payment for such securities except as may arise
from State Street's own negligence or willful misconduct;
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8) For exchange or conversion pursuant to any corporate action,
including without limitation, any calls for redemption, tender or
exchange offers, declarations, record and payment dates and amounts
of any dividends or income, plan of merger, consolidation,
recapitalization, reorganization, readjustment, split-up of shares,
changes of par value, or conversion ("CORPORATE ACTION") of the
securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to State Street;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
State Street;
10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by State Street and Fund on behalf of the
Portfolio, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to
be credited to State Street's account in the book-entry system
authorized by the U.S. Department of the Treasury, State Street will
not be held liable or responsible for the delivery of securities
owned by the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowing by Fund on
behalf of the Portfolio requiring a pledge of assets by Fund , but
only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among Fund on behalf of the Portfolio, State Street and a
broker-dealer registered under the Securities Exchange Act of 1934
(the "EXCHANGE ACT") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio;
13) For delivery in accordance with the provisions of any agreement
among Fund on behalf of the Portfolio, State Street, and a futures
commission merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission ("CFTC") and/or any contract market, or any
similar organization or organizations, regarding account deposits in
connection with transactions by the Portfolio;
14) Upon receipt of instructions from the transfer agent for Fund (the
"TRANSFER AGENT") for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may
be described from time to time in the currently effective prospectus
and statement of additional information related
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to the Portfolio (the "PROSPECTUS"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other purpose, but only upon receipt of Proper Instructions
on behalf of the applicable Portfolio specifying the securities to
be delivered and naming the person or persons to whom delivery of
such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities (other than
bearer securities) shall be registered in the name of the Portfolio or in the
name of any nominee of Fund on behalf of the Portfolio or of State Street which
nominee shall be assigned exclusively to the Portfolio, unless Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment advisor as the
Portfolio, or in the name or nominee name of any agent appointed pursuant to
Section 2.7 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by State Street under the terms
hereof shall be in "street name" or other good delivery form. If, however, Fund
directs State Street to maintain securities in "street name", State Street shall
continuously utilize its best efforts to timely collect income due Fund on such
securities and to notify Fund on a best efforts basis only of relevant
information regarding securities such as maturities and pendency of calls and
Corporate Actions.
SECTION 2.4 BANK ACCOUNTS. State Street shall open and maintain a separate
bank account or accounts in the United States in the name of each Portfolio,
subject only to draft or order by State Street acting pursuant hereto, and shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Portfolio, other than cash
maintained by the Portfolio in an account established and used in accordance
with Rule 17f-3 under the 1940 Act. Funds held by State Street for a Portfolio
may be deposited by it to its credit as custodian in the banking department of
State Street or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every such bank
or trust company shall be qualified to act as a custodian under the 1940 Act and
that each such bank or trust company and the funds to be deposited with each
such bank or trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board. Such funds shall be deposited by
State Street in its capacity as custodian and shall be withdrawable by State
Street only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Xxxxxxx
0.0, Xxxxx Xxxxxx shall collect on a timely basis all income and other payments
with respect to registered domestic securities to which each Portfolio shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by State Street or its agent thereof and shall credit such
income, as collected, to such Portfolio's custodian account. Without limiting
the generality of the foregoing, State Street shall detach and present for
payment all coupons and other income items requiring presentation as and when
they become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of Fund. State Street
will have no duty or responsibility in connection therewith, other than to
provide Fund with such information or data as may be necessary to assist Fund in
arranging for the timely delivery to State Street of the income to which the
Portfolio is properly entitled.
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SECTION 2.6 PAYMENT OF PORTFOLIOMONIES. Except to the extent that Section
4.4.2 applies, upon receipt of Proper Instructions on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate by the
parties, State Street shall pay out monies of a Portfolio in the following cases
only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts to State Street (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and has been
designated by State Street as its agent for this purpose) registered
in the name of the Portfolio or in the name of a nominee of State
Street referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a U.S.
Securities System, in accordance with the conditions set forth in
Section 2.8 hereof; (c) in the case of repurchase agreements entered
into between Fund on behalf of the Portfolio and State Street, or
another bank, or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in certificate form or
through an entry crediting State Street's account at the Federal
Reserve Bank with such securities or (ii) against delivery of the
receipt evidencing purchase by the Portfolio of securities owned by
State Street along with written evidence of the agreement by State
Street to repurchase such securities from the Portfolio; or (d) for
transfer to a time deposit account of Fund in any bank, whether
domestic or foreign; such transfer may be effected prior to receipt
of a confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions ;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued as set forth in
Section 5 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant to the
Declaration of Trust, Articles of Incorporation, Bylaws or other
governing documents of Fund (collectively, the "GOVERNING
DOCUMENTS");
6) For payment of the amount of dividends received in respect of
securities sold short; and
7) For any other purpose, but only upon receipt of Proper Instructions
on behalf of the Portfolio specifying the amount of such payment and
naming the person or persons to whom such payment is to be made.
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SECTION 2.7 APPOINTMENT OF AGENTS. State Street may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as State Street
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve State Street of its responsibilities or liabilities
hereunder.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. State
Street may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System subject to the following provisions:
0) Xxxxx Xxxxxx may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account of State Street in the U.S. Securities System (the "U.S.
SECURITIES SYSTEM ACCOUNT") which account shall not include any
assets of State Street other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of State Street with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
0) Xxxxx Xxxxxx shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the U.S.
Securities System Account, and (ii) the making of an entry on the
records of State Street to reflect such payment and transfer for the
account of the Portfolio. State Street shall transfer securities
sold for the account of the Portfolio upon (i) receipt of advice
from the U.S. Securities System that payment for such securities has
been transferred to the U.S. Securities System Account, and (ii) the
making of an entry on the records of State Street to reflect such
transfer and payment for the account of the Portfolio. Copies of all
advices from the U.S. Securities System of transfers of securities
for the account of the Portfolio shall identify the Portfolio, be
maintained for the Portfolio by State Street and be provided to Fund
at its request. Upon request, State Street shall furnish Fund on
behalf of the Portfolio confirmation of each transfer to or from the
account of the Portfolio in the form of a written advice or notice
and shall furnish to Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio;
4) State Street shall provide Fund with any report obtained by State
Street on the U.S. Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the U.S. Securities System;
5) Anything to the contrary herein notwithstanding, State Street shall
be liable to Fund for the benefit of the Portfolio for any loss or
damage to the Portfolio resulting from use of the U.S. Securities
System by reason of any negligence, misfeasance or misconduct of
State Street or any of its agents or of any of its their employees
or from failure of State Street or any such agent to enforce
effectively such rights as it may have against the U.S. Securities
System; at the election of
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Fund, it shall be entitled to be subrogated to the rights of State
Street with respect to any claim against the U.S. Securities System
or any other person which State Street may have as a consequence of
any such loss or damage if and to the extent that the Portfolio has
not been made whole for any such loss or damage.
SECTION 2.9 SEGREGATED ACCOUNT. State Street shall upon receipt of Proper
Instructions on behalf of each applicable Portfolio establish and maintain a
segregated account or accounts for and on behalf of each such Portfolio, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by State Street pursuant to Section 2.8
hereof, (i) in accordance with the provisions of any agreement among Fund on
behalf of the Portfolio, State Street and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the CFTC or any registered contract market), or of any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio, (ii) for purposes of segregating
cash or government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release No.
10666, or any subsequent release of the U.S. Securities and Exchange Commission
(the "SEC"), or interpretative opinion of the staff of the SEC, relating to the
maintenance of segregated accounts by registered investment companies, and (iv)
for any other purpose upon receipt of Proper Instructions on behalf of the
applicable Portfolio.
SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. State Street shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio and in connection with
transfers of securities.
SECTION 2.11 PROXIES. State Street shall, with respect to domestic
securities, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of the
Portfolio or a nominee of the Portfolio, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Portfolio such proxies, all proxy soliciting materials and all notices relating
to such securities.
SECTION 2.12 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to
the provisions of Xxxxxxx 0.0, Xxxxx Xxxxxx shall transmit promptly to Fund for
each Portfolio all written information received by State Street from issuers of
the securities being held for the Portfolio with respect to Corporate Actions,
notices of exercise of call and put options written by Fund on behalf of the
Portfolio, and the maturity of futures contracts purchased or sold by the
Portfolio. With respect to tender or exchange offers, State Street shall
transmit promptly to the Portfolio all written information received by State
Street from issuers of the securities whose tender or exchange is sought and
from the party (or its agents) making the tender or exchange offer. If the
Portfolio desires to take action with respect to any Corporate Action, the
Portfolio shall provide Proper Instruction to State Street at least three
business days prior to the date on which State Street is to take such action.
SECTION 3 PROVISIONS RELATING TO RULES 17F-5 AND 17F-7
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SECTION 3.1 DEFINITIONS. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country. "Country Risk" does not include the risk that State
Street or any sub-custodian or agent will be negligent or will engage in willful
misconduct.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in section 2(a)(5)
of the 0000 Xxx) meeting the requirements of a custodian under section 17(f) of
the 1940 Act; the term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.
"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.
SECTION 3.2 STATE STREET AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO STATE STREET AS FOREIGN CUSTODY MANAGER. Fund, by
resolution adopted by its Board, hereby delegates to State Street, subject
to section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets held outside the United States,
and State Street hereby accepts such delegation as Foreign Custody Manager
with respect to the Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible
for performing the delegated responsibilities defined below only with
respect to the countries and custody arrangements for each such country
listed on Schedule A, which list of countries may be amended from time to
time by Fund with the agreement of the Foreign Custody Manager. The
Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets
of the Portfolios, which list of Eligible Foreign Custodians may be
amended from time to time in the sole discretion of the Foreign Custody
Manager. The Foreign Custody Manager will provide amended versions of
Schedule A in accordance with Section 3.2.5 hereof.
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Upon the receipt by the Foreign Custody Manager of Proper Instructions to
open an account or to place or maintain Foreign Assets in a country listed
on Schedule A, and the fulfillment by Fund, on behalf of the Portfolios,
of the applicable account opening requirements for such country, the
Foreign Custody Manager shall be deemed to have been delegated by the
Board on behalf of the Portfolios responsibility as Foreign Custody
Manager with respect to that country and to have accepted such delegation.
Execution hereof by Fund shall be deemed (i) to be a Proper Instruction to
open an account, or to place or maintain Foreign Assets, in each country
listed on Schedule A in which State Street has previously placed or
currently maintains Foreign Assets pursuant to the terms of the contract
governing the custody arrangement (the parties agreeing that the countries
in which the Custodian has previously maintained or currently maintains
Foreign Assets are listed on Schedule B) and (ii) to be a delegation by
the Board on behalf of the Portfolios to the Custodian of responsibility
as Foreign Custody Manager with respect to the countries listed on
Schedule B and the acceptance by the Custodian of such delegation.
Following the receipt of Proper Instructions directing the Foreign Custody
Manager to close the account of a Portfolio with the Eligible Foreign
Custodian selected by the Foreign Custody Manager in a designated country,
the delegation by the Board on behalf of the Portfolios to State Street as
Foreign Custody Manager for that country shall be deemed to have been
withdrawn and State Street shall use commercially reasonable efforts to
effect the closing of such account and to cease to be the Foreign Custody
Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice
to Fund. Thirty days (or such longer period to which the parties agree in
writing) after receipt of any such notice by Fund, State Street shall have
no further responsibility in its capacity as Foreign Custody Manager to
Fund with respect to the country as to which State Street's acceptance of
delegation is withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Section 3.2, the Foreign Custody Manager may place and
maintain the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the Foreign Custody Manager in each country listed on Schedule
A, as amended from time to time. In performing its delegated
responsibilities as Foreign Custody Manager to place or maintain Foreign
Assets with an Eligible Foreign Custodian, the Foreign Custody Manager
shall determine that the Foreign Assets will be subject to reasonable
care, based on the standards applicable to custodians in the country in
which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation the factors specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody
Manager shall determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
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(c) MONITORING. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by
the Foreign Custody Manager, the Foreign Custody Manager shall in
accordance with Rule 17f-5(c)(3)(1), establish a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible
Foreign Custodian and (ii) the contract governing the custody arrangements
established by the Foreign Custody Manager with the Eligible Foreign
Custodian. In the event the Foreign Custody Manager determines that the
custody arrangements with an Eligible Foreign Custodian it has selected
are no longer appropriate, the Foreign Custody Manager shall notify the
Board in accordance with Section 3.2.5 hereunder.
3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of
this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which State Street is
serving as Foreign Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the
withdrawal of the Foreign Assets from an Eligible Foreign Custodian and
the placement of such Foreign Assets with another Eligible Foreign
Custodian not previously reported to the Board by providing to the Board
an amended Schedule A at the end of the calendar quarter in which an
amendment to such Schedule has occurred. The Foreign Custody Manager shall
make written reports notifying the Board of any other material change in
the foreign custody arrangements of the Portfolios described in this
Section 3.2 after the occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In
performing the responsibilities delegated to it, the Foreign Custody
Manager agrees to exercise reasonable care, prudence and diligence such as
a person having responsibility for the safekeeping of assets of management
investment companies registered under the 1940 Act would exercise.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody
Manager represents to Fund that (i) it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5 (ii) that each institution listed on Schedule
A is an Eligible Foreign Custodian and (iii) each institution listed in
Schedule B is an Eligible Securities Depository. Fund represents to State
Street that the Board has determined that it is reasonable for the Board
to rely on State Street to perform the responsibilities delegated pursuant
hereto to State Street as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF STATE STREET AS FOREIGN CUSTODY
MANAGER. The Board's delegation to State Street as Foreign Custody Manager
of the Portfolios shall be effective as of the date hereof and shall
remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party.
Termination will become effective thirty (30) days after receipt by the
non-terminating party of such notice. The provisions of Section 3.2.2
hereof shall govern the delegation to and termination of State Street as
Foreign Custody Manager of the Portfolios with respect to designated
countries.
SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.
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3.3.1 ANALYSIS AND MONITORING. State Street shall (a) provide Fund (or its
duly-authorized investment manager, investment advisor or sub-adviser,
where applicable) with an analysis of the custody risks associated with
maintaining assets with the Eligible Securities Depositories set forth on
Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7,
and (b) monitor such risks on a continuing basis, and promptly notify Fund
(or its duly-authorized investment manager, investment advisor or
sub-adviser, where applicable) of any material change in such risks, in
accordance with section (a)(1)(i)(B) of Rule 17f-7.
3.3.2 STANDARD OF CARE. State Street agrees to exercise reasonable care,
prudence and diligence in performing the duties set forth in Section
3.3.1.
SECTION 4 DUTIES OF STATE STREET WITH RESPECT TO PROPERTY HELD OUTSIDE THE
UNITED STATES
SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2 HOLDING SECURITIES. State Street shall identify on its books
as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. State Street may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to State Street for
the benefit of its customers, provided however, that (i) the records of State
Street with respect to foreign securities which are maintained in such account
shall identify those securities as belonging to the Portfolios and (ii), to the
extent permitted and customary in the market in which the account is maintained,
State Street shall require that securities so held by the Foreign Sub-Custodian
be held separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian.
SECTION 4.3 FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by State Street or a Foreign Sub-Custodian, as
applicable, in such country. (Foreign Securities Systems and U.S. Securities
Systems are collectively referred to herein as "SECURITIES SYSTEMS").
SECTION 4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN ASSETS. State Street or a Foreign Sub-Custodian
shall release and deliver foreign securities held by State Street or such
Foreign Sub-Custodian, or in a Foreign Securities System account, only
upon receipt of Proper Instructions on behalf of the Applicable Portfolio,
which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
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(i) upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the country
where such foreign securities are held or traded, including, without
limitation: (A) delivery against reasonable expectation of receiving later
payment; or (B) in the case of a sale effected through a Foreign
Securities System, in accordance with the rules governing the operation of
the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities;
(iv) to the issuer thereof or its agent when such foreign securities
are called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name
of State Street (or the name of the respective Foreign Sub-Custodian or of
any nominee of State Street or such Foreign Sub-Custodian) or for exchange
for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market custom; provided
that in any such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except as may
arise from the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) for exchange or conversion pursuant to any Corporate Actions
or pursuant to provisions for conversion contained in such securities, or
pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign
securities, the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or temporary
securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin in accordance
with applicable regulatory requirements;
(xi) in connection with the lending of foreign securities by the
Portfolio; and
(xii) for any other purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be delivered and naming
the person or persons to whom delivery of such securities shall be made.
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4.4.2. PAYMENT OF PORTFOLIO MONIES - FOREIGN SECURITIES. Upon receipt of
Proper Instructions on behalf of the applicable Portfolio, which may be
continuing instructions when deemed appropriate by the parties, State
Street shall pay out, or direct the respective Foreign Sub-Custodian or
the respective Foreign Securities System to pay out, monies of a Portfolio
in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A) delivering money
to the seller thereof or to a dealer therefor (or an agent for such seller
or dealer) against reasonable expectation of receiving later delivery of
such foreign securities; or (B) in the case of a purchase effected through
a Foreign Securities System, in accordance with the rules governing the
operation of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest, taxes,
investment advisory fees, transfer agency fees, fees hereunder, legal
fees, accounting fees, and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions executed with
or through State Street or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in respect
of securities sold short;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment and naming the person
or persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision hereof to the
contrary, settlement and payment for Foreign Assets received for the
account of the Portfolios and delivery of Foreign Assets maintained for
the account of the Portfolios may be effected in accordance with the
customary established securities trading or processing practices and
procedures in the country or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
with the expectation of receiving later payment for such Foreign Assets
from such purchaser or dealer.
State Street shall provide each Portfolio's adviser (and sub-adviser,
where applicable), as identified in Proper Instructions by the Board, the
information with respect to custody and settlement practices in countries
in which State Street employs a Foreign Sub-Custodian described on
Schedule C hereto, including without limitation information
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relating to Foreign Securities Systems, at the time or times set forth on
such Schedule. State Street may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided
with substantively less information than had been previously provided
hereunder.
SECTION 4.5 REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of State Street or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. State Street or a Foreign Sub-Custodian shall
not be obligated to accept securities on behalf of a Portfolio under the terms
hereof unless the form of such securities and the manner in which they are
delivered are in accordance with reasonable market practice.
SECTION 4.6 BANK ACCOUNTS. State Street shall identify on its books as
belonging to Fund cash (including cash denominated in foreign currencies)
deposited with State Street. Where State Street is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of State
Street, a bank account or bank accounts shall be opened and maintained outside
the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All
accounts referred to in this Section shall be subject only to draft or order by
State Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant to
the terms hereof to hold cash received by or from or for the account of the
Portfolio. Cash maintained on the books of State Street (including its branches,
subsidiaries and affiliates), regardless of currency denomination, is maintained
in bank accounts established under, and subject to the laws of, The Commonwealth
of Massachusetts.
SECTION 4.7 COLLECTION OF INCOME. State Street shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled and
shall credit such income, as collected, to the applicable Portfolio. In the
event that extraordinary measures are required to collect such income, Fund and
State Street shall consult as to such measures and as to the compensation and
expenses of State Street relating to such measures.
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities
held pursuant to this Xxxxxxx 0, Xxxxx Xxxxxx will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of Fund to exercise shareholder rights.
SECTION 4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. State Street
shall transmit promptly to Fund written information with respect to materials
received by State Street via the Foreign Sub-Custodians from issuers of the
foreign securities being held for the account of the Portfolios (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). With respect to tender or
exchange offers, State Street shall transmit promptly to Fund written
information with respect to materials so received by State Street from issuers
of the foreign securities whose tender or exchange is sought or from the party
(or its agents) making the tender or exchange offer. State Street shall
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not be liable for any untimely exercise of any action, right or power in
connection with foreign securities or other property unless (i) State Street or
the respective Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) State Street receives Proper Instructions with
regard to the exercise of any such action, right or power, and both (i) and (ii)
occur at least three business days prior to the date on which State Street is to
take action to exercise such right or power.
SECTION 4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant
to which State Street employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, State Street
from and against any loss, damage, cost, expense, liability or claim arising out
of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of State Street with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Portfolios have not been made
whole for any such loss, damage, cost, expense, liability or claim.
SECTION 4.11 TAX LAW. State Street shall have no responsibility or
liability for any obligations now or hereafter imposed on Fund, the Portfolios
or State Street as custodian of the Portfolios by the tax law of the United
States or of any state or political subdivision thereof (except taxes
attributable to the domicile of State Street in the Commonwealth of
Massachusetts, and in such case State Street shall notify Fund). It shall be the
responsibility of Fund to notify State Street of the obligations imposed on Fund
with respect to the Portfolios or State Street as custodian of the Portfolios by
the tax law of countries other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of State Street with regard to such tax law shall be to use
reasonable efforts to assist Fund with respect to any claim for exemption or
refund under the tax law of countries for which Fund has provided such
information.
SECTION 4.12 LIABILITY OF STATE STREET. State Street shall be liable for
the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally herein and, regardless of whether
assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign
Securities System, State Street shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism, or any other loss to the
extent that the Sub-Custodian has acted with reasonable care.
SECTION 5 PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES. State
Street shall receive from the distributor for the Shares or from the Transfer
Agent and deposit into the account of the appropriate Portfolio such payments as
are received for Shares thereof issued or sold from time to time by Fund. State
Street will provide timely notification to Fund on behalf of each such Portfolio
and the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose, State Street shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In
15
connection with the redemption or repurchase of Shares, State Street is
authorized upon receipt of instructions from the Transfer Agent to wire funds to
or through a commercial bank designated by the redeeming shareholders. In
connection with the redemption or repurchase of Shares, State Street shall honor
checks drawn on State Street by a holder of Shares, which checks have been
furnished by Fund to the holder of Shares, when presented to State Street in
accordance with such procedures and controls as are mutually agreed upon from
time to time between Fund and State Street.
SECTION 6 PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Agreement means a writing signed or initialed by one or more person or persons
as the Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if State Street reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Fund shall cause all oral
instructions to be confirmed in writing. If given pursuant to procedures to be
agreed upon by the parties, Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices provided that
Fund and State Street agree to security procedures, including but not limited
to, the security procedures selected by Fund in the Funds Transfer Addendum
attached hereto. For purposes of this Section, Proper Instructions shall include
instructions received by State Street pursuant to any three-party agreement that
requires a segregated asset account in accordance with Section 2.9.
SECTION 7 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. State Street may in its
discretion, without express authority from Fund on behalf of each applicable
Portfolio: 1) surrender securities in temporary form for securities in
definitive form; 2) endorse for collection, in the name of the Portfolio,
checks, drafts and other negotiable instruments; and 3) in general, attend to
all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with the securities and
property of the Portfolio except as otherwise directed by the Board.
SECTION 8 EVIDENCE OF AUTHORITY. State Street shall be protected in acting upon
any instructions, notice, request, consent, certificate or other instrument or
paper believed by it to be genuine and to have been properly executed by or on
behalf of Fund. State Street may receive and accept a copy of a resolution
certified by the Secretary or an Assistant Secretary of Fund ("CERTIFIED
RESOLUTION") as conclusive evidence (a) of the authority of any person to act in
accordance with such resolution or (b) of any determination or of any action by
the Board as described in such resolution, and such resolution may be considered
as in full force and effect until receipt by State Street of written notice to
the contrary.
SECTION 9 DUTIES OF STATE STREET WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE
SECTION 9.1 ACCOUNTS AND RECORDS. State Street will prepare and maintain,
under the direction of and as interpreted by Fund, Fund's or Portfolio's
accountants and/or other advisors, in complete, accurate and current form such
accounts and records: (A) required to be maintained by Fund with respect to
portfolio transactions under the 1940 Act; (B) required as a basis for
calculation of each Portfolio's net asset value; and (C) as otherwise agreed
upon by the parties. Fund will advise State Street in writing of all applicable
record retention requirements,
16
other than those set forth in the 1940 Act. State Street will preserve such
accounts and records in the manner and for the periods prescribed in the 1940
Act or for such longer period as is agreed upon by the parties. Fund will
furnish, in writing or its electronic or digital equivalent, accurate and timely
information needed by State Street to complete such accounts and records when
such information is not readily available from generally accepted securities
industry services or publications. State Street shall, at Fund's request, supply
Fund with a tabulation of securities owned by a Portfolio and held by State
Street, including certificate numbers, if applicable, for such compensation as
shall be agreed upon between Fund and State Street.
SECTION 9.2 DELIVERY OF ACCOUNTS AND RECORDS. Fund will turn over or cause
to be turned over to State Street all accounts and records needed by State
Street to perform its duties and responsibilities hereunder fully and properly.
State Street may rely conclusively on the completeness and correctness of such
accounts and records.
SECTION 9.3 ACCOUNTS AND RECORDS PROPERTY OF FUND. State Street
acknowledges that all of the accounts and records maintained by State Street
pursuant hereto are the property of Fund, and will be made available to Fund for
inspection or reproduction within a reasonable period of time, upon demand.
State Street will assist Fund's independent auditors, or upon the prior written
approval of Fund, or upon demand, any regulatory body, in any requested review
of Fund's accounts and records but Fund will reimburse State Street for all
reasonable expenses and employee time invested in any such review outside of
routine and normal periodic reviews. Upon receipt from Fund of the necessary
information or instructions, State Street will supply information from the books
and records it maintains for Fund that Fund may reasonably request for tax
returns, questionnaires, periodic reports to shareholders and such other reports
and information requests as Fund and State Street may agree upon from time to
time.
SECTION 9.4 ADOPTION OF PROCEDURES. State Street and Fund may from time to
time adopt such procedures as they agree upon, and State Street may conclusively
assume that no procedure approved or directed by Fund, Fund's or Portfolio's
accountants or other advisors conflicts with or violates any requirements of
Fund's Prospectus, governing documents, any applicable law, rule or regulation,
or any order, decree or agreement by which Fund may be bound. The Fund agrees to
notify State Street promptly of any change in the Fund's circumstances and of
any changes in statutes, regulations, rules, requirements or policies which may
impact State Street's performance of its responsibilities hereunder or its
related operational policies and procedures as they relate to the Fund in a
manner different from or in addition to requirements applicable to investment
companies registered under the 1940 Act in general.
SECTION 9.5 VALUATION OF ASSETS. State Street will value the assets of
each Portfolio in accordance with Proper Instructions utilizing the pricing
sources designated by Fund ("PRICING SOURCES") on the Price Source and
Methodology Authorization Matrix, incorporated herein by this reference. State
Street will assist with the shadow pricing of any money market Portfolios as
requested by Fund. If so directed, State Street shall also calculate daily net
income of a Portfolio as described in the prospectus and shall advise the Fund
periodically of the division of such net income of its various components.
SECTION 9.6 LIMITATION OF LIABILITY. So long as and to the extent that it
is in the exercise of reasonable care, State Street is not responsible or liable
for, and Fund will indemnify and hold State Street harmless from and against,
any and all costs, expenses, losses, damages, charges, counsel fees (including,
without limitation, disbursements and the allocable cost of in-house
17
counsel), payments and liabilities which may be asserted against or incurred by
State Street or for which State Street may be held to be liable, arising out of
or attributable to any error, omission, inaccuracy or other deficiency in any
Portfolio's accounts and records or other information provided to State Street
by or on behalf of a Portfolio, including the accuracy of the prices quoted by
the Pricing Sources or for the information supplied by Fund to value the assets,
or the failure of Fund to provide, or provide in a timely manner, any accounts,
records, or information needed by State Street to perform its duties hereunder.
SECTION 10 OPINION OF FUND'S INDEPENDENT ACCOUNTANT. State Street shall take all
reasonable action, as Fund on behalf of each applicable Portfolio may from time
to time request, to obtain from year to year favorable opinions from Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of Fund's Form N-1A, and Form N-SAR or other annual reports
to the SEC and with respect to any other requirements thereof.
SECTION 11 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. State Street shall
provide Fund, on behalf of each of the Portfolios at such times as Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in any Securities System, relating to the
services provided by State Street hereunder; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required by Fund
to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 12 COMPENSATION OF STATE STREET. State Street shall be entitled to
reasonable compensation for its services and expenses as custodian and
recordkeeping agent, as agreed upon from time to time in a fee schedule, as
amended from time to time ("FEE SCHEDULE") between Fund on behalf of each
applicable Portfolio and State Street.
SECTION 13 RESPONSIBILITY OF STATE STREET. So long as and to the extent that
State Street exercises reasonable care, State Street shall not be responsible
for the title, validity or genuineness of any property or evidence of title
thereto received by it or delivered by it pursuant hereto and shall be held
harmless in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties, including any futures commission merchant acting
pursuant to the terms of a three-party futures or options agreement. State
Street shall be held to the exercise of reasonable care in carrying out the
provisions hereof, but shall be kept indemnified by and shall be without
liability to Fund for any action taken or omitted by it in good faith without
negligence, including, without limitation, acting in accordance with any Proper
Instruction. It shall be entitled to rely on and may act upon advice of counsel
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice. State Street shall be without liability to
Fund and the Portfolios for any loss, liability, claim or expense resulting from
or caused by anything which is part of Country Risk (as defined in Section 3
hereof), including without limitation nationalization, expropriation, currency
restrictions, or acts of war, revolution, riots or terrorism.
Except to the extent of State Street's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, State Street
shall be without liability to Fund for any loss, liability, claim or expense
resulting from or caused by; (i) events or circumstances
18
beyond the reasonable control of State Street or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, work
stoppages, natural disasters, or other similar events or acts ("Force Majeure
Events"); (ii) errors by Fund or its duly-authorized investment manager or
investment advisor in their instructions to State Street provided such
instructions have been in accordance with this Agreement; (iii) the insolvency
of or acts or omissions by a Securities System; (iv) any delay or failure of any
broker, agent or intermediary, central bank or other commercially prevalent
payment or clearing system to deliver to State Street's sub-custodian or agent
securities purchased or in the remittance or payment made in connection with
securities sold; (v) any delay or failure of any company, corporation, or other
body in charge of registering or transferring securities in the name of State
Street, Fund, State Street's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.
State Street shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally herein.
If Fund on behalf of a Portfolio requires State Street to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of State Street, result in State Street or its
nominee assigned to Fund or the Portfolio being liable for the payment of money
or incurring liability of some other form, Fund on behalf of the Portfolio, as a
prerequisite to requiring State Street to take such action, shall provide
indemnity to State Street in an amount as State Street may reasonably require.
If Fund requires State Street, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that State Street or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from State Street's or
its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should Fund fail to repay State Street
promptly, State Street shall be entitled to utilize available cash and to
dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
In no event shall either party be liable for indirect, special or consequential
damages.
SECTION 14 EFFECTIVE PERIOD, TERMINATION AND AMENDMENT. This Agreement shall
become effective as of its execution, shall continue in full force and effect
until terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty (60) days after the date
of such delivery or mailing; provided, however, that Fund shall not amend or
terminate this Agreement in contravention of any applicable federal or state
regulations, or any provision of the
19
governing documents, and further provided, that Fund on behalf of one or more of
the Portfolios may at any time by action of its Board (i) substitute another
bank or trust company for State Street by giving notice as described above to
State Street, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for State Street by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination hereof, Fund on behalf of each applicable Portfolio shall pay
to State Street such compensation and reimbursement as may be due as of the date
of such termination in accordance with the Fee Schedule, and State Street shall
pay amounts due to any Portfolio.
SECTION 15 SUCCESSOR CUSTODIAN AND RECORDKEEPING AGENT. Upon termination of
State Street as recordkeeping agent, State Street shall, upon payment of all
sums due to it from Fund that are not in dispute, deliver all accounts and
records to the successor recordkeeping agent (or, if none, to Fund) at the
office of State Street.
Upon termination of State Street as Custodian, if a successor custodian for one
or more Portfolios shall be appointed by the Board, State Street shall deliver
to such successor custodian at the office of State Street, duly endorsed and in
the form for transfer, all securities of each applicable Portfolio then held by
it hereunder and shall transfer to an account of the successor custodian all of
the securities of each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, State Street shall, in like
manner, upon receipt of a Certified Resolution, deliver at the office of State
Street and transfer such securities, funds and other properties in accordance
with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to State Street on or before the
date when such termination shall become effective, then State Street shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by State Street on behalf of each
applicable Portfolio and all instruments held by State Street relative thereto
and all other property held by it hereunder on behalf of each applicable
Portfolio, and to transfer to an account of such successor custodian all of the
securities of each such Portfolio held in any Securities System. Thereafter,
such bank or trust company shall be the successor of State Street hereunder.
In the event that accounts, records, securities, funds and other properties
remain in the possession of State Street after the date of termination hereof
owing to failure of Fund to procure the Certified Resolution to appoint a
successor custodian or otherwise, State Street shall be entitled to fair
compensation for its services during such period as State Street retains
possession of such accounts, records, securities, funds and other properties and
the provisions hereof relating to the duties and obligations of State Street
shall remain in full force and effect.
SECTION 16 CONFIDENTIAL INFORMATION The parties acknowledge that in the
course of performing their responsibilities under the Agreement, they may be
exposed to or acquire certain non-public information belonging to the other
party ("Confidential Information"). The parties agree to hold any such
Confidential Information in strict confidence and not to copy,
20
reproduce, sell, assign, license, market, transfer or otherwise dispose of, give
or disclose such Confidential Information to third parties or to use such
Confidential Information for any purposes whatsoever other than the provision of
the services under this Agreement and to advise each of its officers, directors,
employees and agents who may be exposed to such Confidential Information of
their obligations to keep such information confidential. It is understood that
in the event of a breach of this Section, damages may not be an adequate remedy
and the non-breaching party shall be entitled to injunctive relief to restrain
any such breach, threatened or actual.
The foregoing confidentiality obligations shall not apply to such Confidential
Information (1) which at the time of disclosure, is publicly available or in the
public knowledge; (2) which, after disclosure, lawfully becomes part of the
public knowledge through publication or otherwise, but through no fault of the
receiving party; (3) which the receiving party possesses at the time of
disclosure of such Confidential Information and which was not acquired, directly
or indirectly, from the disclosing party; (4) was acquired by the receiving
party from a third party which has the right to disclose such Confidential
Information; or (5) is independently developed by the receiving party without
reference to the Confidential Information.
SECTION 17 GENERAL
SECTION 17.1 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with
the operation hereof, State Street and Fund on behalf of each of the Portfolios,
may from time to time agree on such provisions interpretive of or in addition to
the provisions hereof as may in their joint opinion be consistent with the
general tenor of this Agreement. Any such interpretive or additional provisions
shall be in a writing signed by both parties and shall be annexed hereto,
provided that no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the governing
documents. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
SECTION 17.2 ADDITIONAL PORTFOLIOS. In the event that Fund establishes one
or more additional series with respect to which it desires to have State Street
render services as custodian and recordkeeping agent under the terms hereof, it
shall so notify State Street in writing, and if State Street agrees to provide
such services, such series shall become a Portfolio hereunder.
SECTION 17.3 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed
and the provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
SECTION 17.4 PRIOR AGREEMENTS. This Agreement supersedes and terminates,
as of the date hereof, all prior agreements between Fund on behalf of each of
the Portfolios and State Street relating to the custody or recordkeeping of
Fund's assets, as more specifically set forth on Exhibit A hereto.
SECTION 17.5 NOTICES. Any notice, instruction or other instrument required
to be given hereunder may be delivered in person to the offices of the parties
as set forth herein during normal business hours or delivered prepaid registered
mail or by telex, cable or telecopy to the parties at the following addresses or
such other addresses as may be notified by any party from time to time.
21
To Fund:
ING PILGRIM INVESTMENTS
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
To State Street:
STATE STREET BANK AND TRUST COMPANY
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Vice President, Custody
Telephone: 000-000-0000
Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
SECTION 17.6 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules,
addenda, exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 17.7 REMOTE ACCESS SERVICES ADDENDUM. State Street and Fund agree
to be bound by the terms of the Remote Access Services Addendum attached hereto.
SECTION 17.8 ASSIGNMENT. Except as otherwise set forth herein, this
Agreement may not be assigned by either party without the written consent of the
other.
SECTION 17.9 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute but one and the same Agreement.
SECTION 17.10 SEVERABILITY. If any provision in this Agreement is
determined to be invalid, illegal, in conflict with any law or otherwise
unenforceable, the remaining provisions hereof will be considered severable and
will not be affected thereby, and every
22
remaining provision hereof will remain in full force and effect and will remain
enforceable to the fullest extent permitted by applicable law.
SECTION 17.11 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2 requires
banks which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of beneficial
owners of securities of that issuer held by the bank unless the beneficial owner
has expressly objected to disclosure of this information. In order to comply
with the rule, State Street needs Fund to indicate whether it authorizes State
Street to provide Fund's name, address, and share position to requesting
companies whose securities Fund owns. If Fund tells Xxxxx Xxxxxx "xx", Xxxxx
Xxxxxx will not provide this information to requesting companies. If Fund tells
State Street "yes" or does not check either "yes" or "no" below, State Street is
required by the rule to treat Fund as consenting to disclosure of this
information for all securities owned by Fund or any funds or accounts
established by Fund. For Fund's protection, the Rule prohibits the requesting
company from using Fund's name and address for any purpose other than corporate
communications. Please indicate below whether Fund consents or objects by
checking one of the alternatives below.
YES | | State Street is authorized to release Fund's name, address, and share
positions.
NO |X| State Street is not authorized to release Fund's name, address, and
share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative effective
as of the day and year first written above.
ON BEHALF OF EACH OF THE FUNDS
SET FORTH ON EXHIBIT A HERETO FUND SIGNATURE ATTESTED TO BY:
By: By:
------------------------------- --------------------------------
Name: Name:
----------------------------- ------------------------------
Title: Title:
---------------------------- -----------------------------
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: By:
------------------------------- --------------------------------
Name: Name:
----------------------------- ------------------------------
Title: Title:
---------------------------- -----------------------------
23
EXHIBIT A: LIST OF FUNDS (11/1/2001)
ENTITY NAME JURISDICTION
----------- ------------
PILGRIM FINANCIAL SERVICES FUND, INC. Maryland corporation
PILGRIM EQUITY TRUST Massachusetts Business Trust
Pilgrim Biotechnology Fund
Pilgrim MidCap Opportunities Fund
Pilgrim Principal Protection Fund
Pilgrim Principal Protection Fund II
ING SmallCap Value Fund
ING MidCap Value Fund
PILGRIM FUNDS TRUST Delaware Business Trust
Pilgrim High Yield Bond Fund
Pilgrim Intermediate Bond Fund
Pilgrim Internet Fund
Pilgrim National Tax-Exempt Bond Fund
Pilgrim Tax Efficient Equity Fund
ING Pilgrim Money Market Fund
PILGRIM GNMA INCOME FUND, INC.
PILGRIM GROWTH AND INCOME FUND, INC.
PILGRIM GROWTH OPPORTUNITIES FUND Massachusetts Business Trust
PILGRIM INVESTMENT FUNDS, INC. Maryland corporation
Pilgrim MagnaCap Fund
Pilgrim High Yield Fund
PILGRIM MAYFLOWER TRUST Massachusetts Business Trust
Pilgrim Growth + Value Fund
Pilgrim Research Enhanced Index Fund
PILGRIM MUTUAL FUNDS Delaware Trust
Pilgrim LargeCap Growth Fund
Pilgrim MidCap Growth Fund
Pilgrim SmallCap Growth Fund
Pilgrim Convertible Fund
Pilgrim Balanced Fund
Pilgrim High Yield Fund II
Pilgrim Strategic Income Fund
Pilgrim Money Market Fund
24
ENTITY NAME JURISDICTION
----------- ------------
PILGRIM NATURAL RESOURCES TRUST
PILGRIM SENIOR INCOME FUND Delaware Business Trust
PILGRIM SMALLCAP OPPORTUNITIES FUND Massachusetts Business Trust
PILGRIM PRIME RATE TRUST Massachusetts business trust
PILGRIM VARIABLE PRODUCTS TRUST
Pilgrim VP Convertible Portfolio
Pilgrim VP Growth & Income Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP LargeCap Growth Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP High Yield Bond Portfolio
Pilgrim VP MagnaCap Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim XX XxxXxx Opportunities Portfolio
Pilgrim VP Financial Services Portfolio
USLICO SERIES FUND Massachusetts Business Trust
Asset Allocation Portfolio
Bond Portfolio
Money Market Portfolio
Stock Portfolio
LEXINGTON MONEY MARKET TRUST
25
SCHEDULE A: STATE STREETGLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Benin via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Canada State Street Trust Company Canada
Chile BankBoston, N.A.
People's Republic Hongkong and Shanghai Banking Corporation Limited,
of China Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus The Cyprus Popular Bank Ltd.
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt HSBC Bank Egypt S.A.E.
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Estonia Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
Germany Dresdner Bank AG
26
SCHEDULE A: STATE STREETGLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Hong Kong Standard Chartered Bank
Hungary HVB Bank Hungary Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
Hongkong and Shanghai Banking Corporation Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
Japan The Fuji Bank, Limited
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Hongkong and Shanghai Banking Corporation Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Mauritius Hongkong and Shanghai Banking Corporation Limited
Mexico Banco Nacional de Mexico S.A.
Morocco Banque Commerciale du Maroc
27
SCHEDULE A: STATE STREETGLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Namibia Standard Bank Namibia Limited
Netherlands Fortis Bank (Nederland) N.V.
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Nigeria Stanbic Merchant Bank Nigeria Limited
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Romania ING Bank N.V.
Russia Credit Suisse First Boston AO - Moscow
(as delegate of Credit Suisse First Boston - Zurich)
Senegal via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Singapore The Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka Hongkong and Shanghai Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
28
SCHEDULE A: STATE STREETGLOBAL CUSTODY NETWORK SUBCUSTODIANS
COUNTRY SUBCUSTODIAN
Thailand Standard Chartered Bank
Togo via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai
Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
29
SCHEDULE B: STATE STREETGLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited Reserve Bank Information and Transfer System
Austria Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A.
Banque Nationale de Belgique
Benin Depositaire Central - Banque de Reglement
Brazil Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia (SELIC)
Central de Custodia e de Liquidacao Financeira de Titulos Privados (CETIP)
Bulgaria Central Depository AD
Bulgarian National Bank
Burkina Faso Depositaire Central - Banque de Reglement
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic of China China Securities Depository and Clearing Corporation Limited Shanghai Branch
China Securities Depository and Clearing Corporation Limited Shenzhen Branch
Colombia Deposito Centralizado de Valores
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
Czech Republic Stredisko cennych papiru - Ceska republika
Czech National Bank
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository S.A.E.
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland Finnish Central Securities Depository
France Euroclear France
30
SCHEDULE B: STATE STREETGLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Germany Clearstream Banking AG, Frankfurt
Greece Bank of Greece,
System for Monitoring Transactions in Securities in Book-Entry Form
Apothetirion Titlon AE - Central Securities Depository
Guinea-Bissau Depositaire Central - Banque de Reglement
Hong Kong Hong Kong Securities Clearing Company Limited
Central Moneymarkets Unit
Hungary Kozponti Elszamolohaz es Ertektar (Budapest) Rt. (KELER)
Iceland Iceland Securities Depository Limited
India National Securities Depository Limited
Central Depository Services India Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Japan Securities Depository Center (JASDEC)
Bank of Japan
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of Financial Instruments for
Lebanon and the Middle East (Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia
31
SCHEDULE B: STATE STREETGLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Mali Depositaire Central - Banque de Reglement
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
Mexico S.D. Indeval, S.A. de C.V.
Morocco Maroclear
Netherlands Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. (NECIGEF)
New Zealand New Zealand Central Securities Depository Limited
Niger Depositaire Central - Banque de Reglement
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central Securities Depository)
Oman Muscat Depository & Securities Registration Company, SAOC
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a department
of the Palestine Stock Exchange
Peru Caja de Valores y Liquidaciones, Institucion
de Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX) of the Bureau of Treasury
Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych SA)
Central Treasury Bills Registrar
Portugal INTERBOLSA - Sociedade Gestora de Sistemas de Liquidacao e de
Sistemas Centralizados de Valores Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR), a
department of the Doha Securities Market
Romania National Securities Clearing, Settlement and Depository Company
Bucharest Stock Exchange Registry Division
National Bank of Romania
Russia Vneshtorgbank, Bank for Foreign Trade of the Russian Federation
Senegal Depositaire Central - Banque de Reglement
32
SCHEDULE B: STATE STREETGLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS
COUNTRY DEPOSITORIES
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko cennych papierov SR, a.s.
National Bank of Slovakia
Slovenia KDD - Centralna klirinsko depotna xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic (STRATE) Ltd.
Spain Servicio de Compensacion y Liquidacion de Valores, S.A.
Banco de Espana, Central de Anotaciones en Cuenta
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB (Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Co., Ltd.
Thailand Thailand Securities Depository Company Limited
Togo Depositaire Central - Banque de Reglement
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs Mobilieres
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine National Bank of Ukraine
Mizhregionalny Fondovy Souz
United Arab Emirates Clearing and Depository System, a department of theDubai Financial Market
Venezuela Banco Central de Venezuela
Zambia XxXX Central Shares Depository Limited
Bank of Zambia
TRANSNATIONAL
Euroclear
Clearstream Banking AG
33
SCHEDULE C: MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
------------------------------- -----------------
(SCHEDULED FREQUENCY)
The Guide to Custody in World Markets An overview of settlement and safekeeping procedures,
(hardcopy annually and regular custody practices and foreign investor considerations for the
website updates) markets in which State Street offers custodial services.
Global Custody Network Review Information relating to Foreign Sub-Custodians in State
(annually) Street's Global Custody Network. The Review stands as an
integral part of the materials that State Street
provides to its U.S. mutual fund clients to assist them
in complying with SEC Rule 17f-5. The Review also gives
insight into State Street's market expansion and Foreign
Sub-Custodian selection processes, as well as the
procedures and controls used to monitor the financial
condition and performance of our Foreign Sub-Custodian
banks.
Securities Depository Review Custody risk analyses of the Foreign Securities
(annually) Depositories presently operating in Network markets.
This publication is an integral part of the materials
that State Street provides to its U.S. mutual fund
clients to meet informational obligations created by SEC
Rule 17f-7.
Global Legal Survey With respect to each market in which State Street offers
(annually) custodial services, opinions relating to whether local
law restricts (i) access of a fund's independent public
accountants to books and records of a Foreign
Sub-Custodian or Foreign Securities System, (ii) a
fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Custodian or Foreign
Securities System, (iii) a fund's ability to recover in
the event of a loss by a Foreign Sub-Custodian or
Foreign Securities System, and (iv) the ability of a
foreign investor to convert cash and cash equivalents to
U.S. dollars.
Subcustodian Agreements Copies of the contracts that State Street has entered
(annually) into with each Foreign Sub-Custodian that maintains U.S.
mutual fund assets in the markets in which State Street
offers custodial services.
Global Market Bulletin Information on changing settlement and custody conditions in
(daily or as necessary) markets where State Street offers custodial services.
Includes changes in market and tax regulations,
depository developments, dematerialization information,
as well as other market changes that may impact State
Street's clients.
Foreign Custody Advisories For those markets where State Street offers custodial
(as necessary) services that exhibit special risks or infrastructures impacting
custody, State Street issues market advisories to
highlight those unique market factors which might impact
our ability to offer recognized custody service levels.
Material Change Notices Informational letters and accompanying materials confirming
(presently on a quarterly State Street's foreign custody arrangements, including a
basis or as otherwise necessary) summary of material changes with Foreign Sub-Custodians that have
occurred during the previous quarter. The notices also
identify any material changes in the custodial risks
associated with maintaining assets with Foreign
Securities Depositories.
34
FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company and affiliates
("SSB") is authorized to promptly debit Client's account(s) upon the receipt of
a payment order in compliance with any of the Security Procedures chosen by the
Client, from those offered on the attached selection form (and any updated
selection forms hereafter executed by the Client), for funds transfers and in
the amount of money that SSB has been instructed to transfer. SSB is hereby
instructed to accept funds transfer instructions only via the delivery methods
and Security Procedures indicated on the attached selection form (and any
updated selection forms hereafter executed by the Client). The Client agrees
that the Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted by SSB
after being confirmed by any of the selected Security Procedures. The Client
also agrees to be bound by any other valid and authorized payment order accepted
by SSB. SSB shall execute payment orders in compliance with the selected
Security Procedures and with the Client's/Investment Manager's instructions on
the execution date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order specifies a
later time. SSB will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable to
execute any such payment order on the execution date, such payment order will be
deemed to have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB shall be entitled to reasonably rely on
any financial institution identification numbers included in any payment order,
regardless of any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's reasonable
judgment, to exceed any applicable volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers; or (c) if SSB, in good faith, is
unable to satisfy itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on
all authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB's reasonable efforts.
6. ERRORS: SSB shall assume no responsibility hereunder for failure to
detect any erroneous payment order provided that SSB complies with the payment
order instructions as received and SSB complies with the selected Security
Procedures. The Security Procedures are established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
35
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for
lost interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS:
When the Client initiates or receives ACH credit and debit entries pursuant to
these Guidelines and the rules of the National Automated Clearing House
Association and the Mid-America Payment Exchange or other similar body, SSB or
its agent will act as an Originating Depository Financial Institution and/or
Receiving Depository Financial Institution, as the case may be, with respect to
such entries. Credits given with respect to an ACH credit entry are provisional
until final settlement for such entry is received from the Federal Reserve Bank.
If such final settlement is not received, the Client agrees to promptly refund
the amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days of receipt of confirmation.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to
execute payment orders, and any payment order carried in whole or in part
through Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
11. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to
repay any deposit made at a non-U.S. branch of State Street, or any deposit made
with State Street and denominated in a non-U.S. dollar currency, if repayment of
such deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or (c) the closure of a non-U.S. branch of State Street in
order to prevent, in the reasonable judgment of State Street, harm to the
employees or property of State Street. The obligation to repay any such deposit
shall not be transferred to and may not be enforced against any other branch of
State Street.
The foregoing provisions constitute the disclosure required by
Massachusetts General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at a
non-U.S. branch or any deposit denominated in a non-U.S. currency during the
period in which its repayment has been prevented, prohibited or otherwise
blocked, State Street will repay such deposit when and if all circumstances
preventing, prohibiting or otherwise blocking repayment cease to exist.
36
SECURITY PROCEDURES SELECTION FORM
Please select at least two of the funds transfer security procedures indicated
below.
| | SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. Selection of this security procedure would be most appropriate for
existing SWIFT members.
| | REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and SSB and/or
its agent. Security procedures include encryption and/or the use of a test key
by those individuals authorized as Automated Batch Verifiers or a callback
procedure to those individuals. Clients selecting this option should have an
existing facility for completing CPU-CPU transmissions. This delivery mechanism
is typically used for high-volume business such as shareholder redemptions and
dividend payments.
| | AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the
initiation of payment (credit) or collection (debit) transactions through the
ACH network. The transactions contained on each transmission or tape must be
authenticated by the Client. The transmission is sent from the Client's or its
agent's system to SSB's or its agent's system with encryption.
| | REPETITIVE WIRES
For situations where funds are transferred periodically from an existing
authorized account to the same payee (destination bank and account number) and
only the date and currency amount are variable, a repetitive wire may be
implemented. Repetitive wires will be subject to a $10 million limit. If the
payment order exceeds the $10 million limit, the instruction will be confirmed
by Telephone Confirmation (Call Back) or Test Key prior to execution. Repetitive
wire instructions must be reconfirmed annually. Clients may establish Repetitive
Wires by following the agreed upon security procedures as described by Telephone
Confirmation (Call Back) or Test Key. This alternative is recommended whenever
funds are frequently transferred between the same two accounts. IF THIS OPTION
IS SELECTED, CHOOSE EITHER TELEPHONE CONFIRMATION OR TEST KEY TO BE USED AS A
SECONDARY PROCEDURE WHEN OVER $10 MILLION.
| | STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the dollar
amount are variable. Clients may establish Standby Instructions by following the
agreed upon security procedures as described by Telephone Confirmation (Call
Back) or Test Key. Additional paperwork will be required from insurance Clients
using 1031 drawdowns. This option is used for transactions that include but are
not limited to Foreign Exchange Contracts, Time Deposits and Tri-Party
Repurchase Agreements. IF THIS OPTION IS SELECTED, CHOOSE EITHER TELEPHONE
CONFIRMATION OR TEST KEY TO BE USED AS A SECONDARY PROCEDURE WHEN OVER $10
MILLION.
| | TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of the
payment order, will contact someone other than the originator at the Client's
location to authenticate the instruction. Selection of this alternative is
appropriate for Clients who do not have the capability to use other security
procedures. PLEASE COMPLETE THE TELEPHONE CONFIRMATION INSTRUCTIONS ATTACHED AS
A SCHEDULE HERETO.
| | TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide test
keys if this option is chosen. SSB will verify that the instruction contains the
signature of an authorized person and prior to execution of the payment order,
will authenticate the test key provided with the corresponding test key at SSB.
Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.
The individual signing below must be authorized to sign contract on behalf of
the client. The execution of payment orders under the selected Security
Procedures is governed by the Funds Transfer Operating Guidelines, which are
incorporated by reference.
On behalf of the ING Pilgrim funds listed on Exhibit A to the Custody and
Investment Accounting Agreement, as amended
By:
----------------------------------------
Authorized Signature
-------------------------------------------
Type or Print Name and Title
Date:
--------------------------------------
37
SCHEDULE TO FUNDS TRANSFER OPERATING GUIDELINES
AND SECURITY PROCEDURES SELECTION FORM
CLIENT/INVESTMENT MANAGER:
-----------------------------------------------------
Company Name
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
------------------------------- ------------------------------------
Name Name
------------------------------- ------------------------------------
Address Address
------------------------------- ------------------------------------
City/State/Zip Code City/State/Zip Code
------------------------------- ------------------------------------
Telephone Number Telephone Number
------------------------------- ------------------------------------
Facsimile Number Facsimile Number
------------------------------- ------------------------------------
SWIFT Number
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
------------------------ ----------------------- --------------------------
38
REMOTE ACCESS SERVICES ADDENDUM
TO CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT BY AND BETWEEN
STATE STREET BANK AND TRUST COMPANY AND ING PILGRIM FUNDS DATED NOVEMBER 1, 0000
Xxxxx Xxxxxx has developed proprietary accounting and other systems, and
has acquired licenses for other such systems, which it utilizes in conjunction
with the services we provide to you (the "Systems"). In this regard, we maintain
certain information in databases under our control and ownership that we make
available on a remote basis to our customers (the "Remote Access Services").
The Services. This addendum shall govern use of all Systems that State
Street may from time to time agree to provide you, the Customer, and your
designated investment advisors, consultants or other third parties authorized by
State Street who agree to abide by the terms of this Addendum ("Authorized
Designees") in order to provide Remote Access Services for the purpose of
obtaining and analyzing reports and information.
Security Procedures. You agree to comply, and to cause your Authorized
Designees to comply, with remote access operating standards and procedures and
with user identification or other password control requirements and other
security procedures as may be issued from time to time by State Street for use
of the Systems and access to the Remote Access Services. You agree to advise
State Street immediately in the event that you learn or have reason to believe
that any person to whom you have given access to the Systems or the Remote
Access Services has violated or intends to violate the terms of this Addendum
and you will cooperate with State Street in seeking injunctive or other
equitable relief. You agree to discontinue use of the Systems and Remote Access
Services, if requested, for any security reasons cited by State Street.
Fees. Fees and charges (if any) for the use of the Systems and the Remote
Access Services and related payment terms shall be as set forth in the fee
schedule in effect from time to time between the parties (the "Fee Schedule").
You shall be responsible for any tariffs, duties or taxes imposed or levied by
any government or governmental agency by reason of the transactions contemplated
by this Addendum, including, without limitation, federal, state and local taxes,
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street). Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
Proprietary Information/Injunctive Relief. The Systems and Remote Access
Services and the databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems, software, know-how,
algorithms, programs, training aids, printed materials, methods, books, records,
files, documentation and other information made available to you by State Street
as part of the Remote Access Services and through the use of the Systems and all
copyrights, patents, trade secrets and other proprietary rights of State Street
and its relevant licensors related thereto are the exclusive, valuable and
confidential property of State Street and its relevant licensors, as applicable
(the "Proprietary Information").
You agree on behalf of yourself and your Authorized Designees to keep the
Proprietary Information confidential and to limit access to your employees and
Authorized Designees (under a similar duty of confidentiality) who require
access to the Systems for the purposes intended. The foregoing shall not apply
to Proprietary Information in the public domain or required by law
to be made public.
39
You agree to use the Remote Access Services only in connection with the
proper purposes of this Addendum. You will not, and will cause your employees
and Authorized Designees not to, (i) permit any third party to use the Systems
or the Remote Access Services, (ii) sell, rent, license or otherwise use the
Systems or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the Systems or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the Systems or
the Remote Access Services, to be redistributed or retransmitted for other than
use for or on behalf of yourself, as our Customer.
You agree that neither you nor your Authorized Designees will modify the
Systems in any way, enhance or otherwise create derivative works based upon the
Systems, nor will you or your Authorized Designees reverse engineer, decompile
or otherwise attempt to secure the source code for all or any part of the
Systems.
You acknowledge that the disclosure of any Proprietary Information, or of
any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury inadequately compensable
in damages at law, and that State Street and its licensor, if applicable, shall
be entitled to obtain immediate injunctive relief against the breach or
threatened breach of any of the foregoing undertakings, in addition to any other
legal remedies which may be available.
Limited Warranties. State Street represents and warrants that it has the
right to grant access to the Systems and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology,
including but not limited to the use of the Internet, and the necessity of
relying upon third-party sources, and data and pricing information obtained from
third parties, the Systems and Remote Access Services are provided "AS IS", and
you and your Authorized Designees shall be solely responsible for the investment
decisions, results obtained, regulatory reports and statements produced using
the Remote Access Services. State Street and its relevant licensors will not be
liable to you or your Authorized Designees for any direct or indirect, special,
incidental, punitive or consequential damages arising out of or in any way
connected with the Systems or the Remote Access Services, nor shall either party
be responsible for delays or nonperformance under this Addendum arising out of
any cause or event beyond such party's control.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET FOR ITSELF
AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING
THE SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTIBILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
Infringement. State Street will defend or, at our option, settle any claim
or action brought against you to the extent that it is based upon an assertion
that access to any proprietary System developed and owned by State Street or use
of the Remote Access Services through any such proprietary System by you under
this Addendum constitutes direct infringement of any United
40
States patent or copyright or misappropriation of a trade secret, provided that
you notify State Street promptly in writing of any such claim or proceeding and
cooperate with State Street in the defense of such claim or proceeding. Should
any such proprietary System or the Remote Access Services accessed thereby or
any part thereof become, or in State Street's opinion be likely to become, the
subject of a claim of infringement or the like under the patent or copyright or
trade secret laws of the United States, State Street shall have the right, at
State Street's sole option, to (i) procure for you the right to continue using
such System or Remote Access Services, (ii) replace or modify such System or
Remote Access Services so that the System or the Remote Access Services becomes
noninfringing, or (iii) terminate access to the Remote Access Services without
further obligation.
Termination. Either party may terminate access to the Remote Access
Services (i) for any reason by giving the other party at least one-hundred and
eighty (180) days' prior written notice in the case of notice of termination by
State Street to you or thirty (30) days' notice in the case of notice from you
to State Street of termination, or (ii) immediately for failure of the other
party to comply with any material term and condition of the Addendum by giving
the other party written notice of termination. In the event of termination, you
will return to State Street all Proprietary Information in your possession or in
the possession of your Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.
Miscellaneous. Except as provided in the next sentence, this Addendum
constitutes our entire understanding with respect to access to the Systems and
the Remote Access Services. If any State Street custody, accounting or other
services agreement with you contains terms and conditions relating to computer
systems or data access, this Addendum shall constitute an amendment and
supplement to them, and in the event of any inconsistency the provisions
providing the greatest benefit to State Street shall control. This Addendum
cannot be modified or altered except in a writing duly executed by both of us
and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
CONFIRMED AND AGREED:
________________________________________
On Behalf of Each of the Funds Set Forth on Exhibit A to the Custody
and Investment Accounting Agreement, as amended from time to time
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
41
