Exhibit No. Ex-99.g(2)
Custodian Agreement
Dated as of: January 22, 2003
Between
The Japan Fund, Inc.
and
Xxxxx Brothers Xxxxxxxx & Company
TABLE OF CONTENTS
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ARTICLE PAGE
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I. APPOINTMENT OF CUSTODIAN
II. POWERS AND DUTIES OF CUSTODIAN
2.01 Safekeeping
2.02 Manner of Holding Securities
2.03 Security Purchases
2.04 Exchanges of Securities
2.05 Sales of Securities
2.06 Depository Receipts
2.07 Exercise of Rights; Tender Offers
2.08 Stock Dividends, Rights, Etc.
2.09 Options
2.10 Futures Contracts
2.11 Borrowing
2.12 Interest Bearing Deposits
2.13 Foreign Exchange Transactions
2.14 Securities Loans
2.15 Collections
2.16 Dividends, Distributions and Redemptions
2.17 Proceeds from Shares Sold
2.18 Proxies, Notices, Etc.
2.19 Bills and Other Disbursements
2.20 Nondiscretionary Functions
2.21 Bank Accounts
2.22 Deposit of Fund Assets in Securities Systems
2.23 Other Transfers
2.24 Establishment of Segregated Account
2.25 Custodian's Books and Records
2.26 Opinion of Fund's Independent Certified Public
Accountants
2.27 Reports of Independent Certified Public Accountants
2.28 Overdraft Facility
2.29 Insurance Requirements
2.30 Provision of Information
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS AND RELATED MATTERS
3.01 Proper Instructions and Special Instructions
3.02 Authorized Persons
3.03 Persons Having Access to Assets of the Portfolios
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions
IV. SUBCUSTODIANS
4.01 Domestic Subcustodians
4.02 Foreign Subcustodians and Interim Subcustodians
4.03 Special Subcustodians
4.04 Termination of a Subcustodian
4.05 Certification Regarding Foreign Subcustodians
V. STANDARD OF CARE; INDEMNIFICATION
5.01 Standard of Care
5.02 Liability of Custodian for Actions of Other Persons
5.03 Indemnification
5.04 Investment Limitations
5.05 Fund's Right to Proceed
VI. COMPENSATION
VII. TERMINATION
7.01 Termination of Agreement
7.02 Termination of Agreement as to One or More Portfolios
VIII. DEFINED TERMS
IX. MISCELLANEOUS
9.01 Execution of Documents, Etc.
9.02 Representative Capacity; Nonrecourse Obligations
9.03 Several Obligations of the Fund and the Portfolios
9.04 Representations and Warranties
9.05 Entire Agreement
9.06 Waivers and Amendments
9.07 Interpretation
9.08 Captions
9.09 Governing Law
9.10 Notices
9.11 Assignments
9.12 Counterparts
9.13 Consent to Recording
9.14 Confidentiality; Survival of Obligations
APPENDICES
Appendix "A" - List of Additional Custodians,
Special Subcustodians and Foreign
Subcustodians
Appendix "B" - Procedures Relating to
Custodian's Security Interest
Appendix "C" - List of Central Funds
CUSTODIAN AGREEMENT
AGREEMENT made as of the 22nd day of January, 2003 between The Japan
Fund, Inc., (the "Fund") and Xxxxx Xxxxxxxx - Xxxxxxxx & Company (the
"Custodian").
W I T N E S S E T H
WHEREAS, the Fund may be organized with one or more series of shares,
each of which shall represent an interest in a separate portfolio of cash,
securities and other assets (any such additional series being hereinafter
referred to individually, as a "Portfolio," and collectively, as the
"Portfolios"); and
WHEREAS, the Fund desires to appoint the Custodian as custodian on
behalf of each of its Portfolios in accordance with the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, under the terms and conditions set forth in this
Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, the Fund hereby employs and
appoints the Custodian as a custodian, subject to the terms and provisions of
this Agreement. Each Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by each of
its Portfolios from time to time during the term of this Agreement and shall
specify to which of its Portfolios such cash, securities and other assets are to
be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article IV
hereof, the Custodian may appoint one or more Subcustodians or may maintain
assets with one or more Eligible Securities Depositories (each as hereinafter
defined) to exercise the powers and perform the duties of the Custodian set
forth in this Article II and references to the Custodian in this Article II
shall include any Subcustodian or Eligible Securities Depository so appointed or
utilized, as applicable.
SECTION 2.01. SAFEKEEPING. The Custodian shall keep safely all cash,
securities and other assets of the Fund's Portfolios delivered to the Custodian
and, on behalf of such Portfolios, the Custodian shall, from time to time,
accept delivery of cash, securities and other assets for safekeeping.
SECTION 2.02. MANNER OF HOLDING SECURITIES AND OTHER ASSETS.
(a) Except to the extent precluded by Section 8-501(d) of the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts ("UCC"), the
Custodian shall hold all securities and other assets, other than cash, of each
of the Fund's Portfolio that are delivered to it hereunder in a "securities
account" with the Custodian for and in the name of such Portfolio and shall
treat all such assets, other than cash, as "financial assets" as those terms are
used in the UCC. The Custodian shall at all times hold securities or other
financial assets held for the Fund's Portfolios either: (i) by physical
possession of the certificated securities or instruments representing such
financial assets, in either registered or bearer form; or (ii) in book-entry
form by maintaining "security entitlements," within the meaning of the UCC, with
respect to such financial assets with (A) a Securities System (as hereinafter
defined) in accordance with the provisions of Section 2.22(a) below or (B) an
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Eligible Securities Depository in accordance with the provisions of Section
2.22(b) below. The standards for the performance of duties and obligations of
the Custodian under UCC Article 8, including without limitation Section 8-504
through Sections 8-508, with respect to securities entitlements of the Fund or
its Portfolio(s) shall be as set forth under this Agreement.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of either of
them, unless specifically directed by Proper Instructions (as hereinafter
defined) to hold such registered securities in so-called street name; PROVIDED
THAT, in any event, all such securities and other assets shall be held in an
account of the Custodian containing only assets of a Portfolio, or only assets
held by the Custodian as a fiduciary or custodian for customers; and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are held
in such account and the respective interests therein.
(c) Notwithstanding the provisions of the foregoing paragraphs of this
Section 2.02, the Custodian is hereby authorized to maintain the shares of
certain open-end management investment companies, managed by the Fund's Advisor,
Fidelity Management & Research Company or its affiliates or successors, as
listed on Appendix "C" hereto, as the same may be amended from time to time in
accordance with Section 9.06(e) hereof, (the "Central Funds") owned by the
Portfolios, in book-entry form directly with the transfer agent or a designated
sub-transfer agent of each such Central Fund ("Central Funds Transfer Agent"),
subject to and in accordance with the following provisions:
(i) Such Central Fund shares shall be maintained in separate
custodian accounts for all such Portfolio or Portfolios in the
Custodian's name or nominee, as custodian for such Portfolio or
Portfolios.
(ii) The Custodian will implement appropriate control
procedures (the "Central Fund Control Procedures") to ensure that (A)
only authorized personnel of the Custodian will be authorized to give
instructions to the Central Fund Transfer Agent in connection with a
Portfolio's purchase or sale of Central Fund shares, (B) trade
instructions sent to the Central Fund Transfer Agent are properly
acknowledged by the Central Fund Transfer Agent, and (C) the Central
Fund Transfer Agent's records of each Portfolio's holdings of Central
Fund shares are properly reconciled with the Custodian's records.
SECTION 2.03. SECURITY PURCHASES. Upon receipt of Proper Instructions,
the Custodian shall pay for and receive securities purchased for the account of
a Portfolio, PROVIDED THAT payment shall be made by the Custodian only upon
receipt of the securities by: (1) the Custodian; (2) a clearing corporation of a
national securities exchange of which the Custodian is a member; (3) a
Securities System; or (4) an Eligible Securities Depository. Notwithstanding the
foregoing, upon receipt of Proper Instructions: (i) in the case of a repurchase
agreement, the Custodian may release funds to a Securities System prior to the
receipt of advice from the Securities System that the securities underlying such
repurchase agreement have been transferred by book-entry into the Account (as
hereinafter defined) maintained with such Securities System by the Custodian,
PROVIDED THAT, the Custodian's instructions to the Securities System require
that the Securities System may make payment of such funds to the other party to
the repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of time
deposits, call account deposits, currency deposits, and other deposits, foreign
exchange transactions, futures contracts or options, pursuant to Sections 2.09,
2.10, 2.12 and 2.13 hereof, the Custodian may make payment therefor before
receipt of an advice or confirmation evidencing said deposit or entry into such
transaction; (iii) in the case of the purchase of securities, the settlement of
which occurs outside of the United States of America, the Custodian may make
payment therefor and receive delivery of such securities in accordance with
local custom and practice generally accepted by Institutional Clients (as
hereinafter defined) in the country in which the settlement occurs, but in all
events subject to the standard of care set forth in Article V hereof and to any
Special Instruction given in accordance with Section 3.01(b); (iv) in the case
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of the purchase of securities in which, in accordance with standard industry
custom and practice generally accepted by Institutional Clients with respect to
such securities, the receipt of such securities and the payment therefor take
place in different countries, the Custodian may receive delivery of such
securities and make payment therefor in accordance with standard industry custom
and practice for such securities generally accepted by Institutional Clients,
but in all events subject to the standard of care set forth in Article V hereof
and to any Special Instruction given in accordance with Section 3.01(b); and (v)
in the case of the purchase of Central Fund shares, the Custodian shall pay for
and receive Central Fund shares purchased for the account of a Portfolio;
PROVIDED THAT (A) the Custodian shall only send instructions to purchase such
shares to the Central Fund Transfer Agent in accordance with the Central Fund
Control Procedures ("Central Fund Purchase Instructions") upon receipt of Proper
Instructions from the Fund, and (B) the Custodian shall release funds to the
Central Fund Transfer Agent only after receiving acknowledgment from the Central
Fund Transfer Agent that it has received the Central Fund Purchase Instructions.
Except in such cases as specifically provided for herein, or as may be
reasonably incidental to effectuating a Proper Instruction, in any case where
payment for purchase of securities or other assets for the account of a
Portfolio is made by the Custodian in advance of receipt of the securities or
other assets so purchased in the absence of Proper Instructions to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities or other assets to the same extent as if the securities or other
assets had been received by the Custodian. For purposes of this Agreement, an
"Institutional Client" shall mean a major commercial bank, corporation,
insurance company, or substantially similar institution, which, as a substantial
part of its business operations, purchases or sells securities and makes use of
custodial services.
SECTION 2.04. EXCHANGES OF SECURITIES. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the account
of a Portfolio for other securities in connection with any reorganization,
recapitalization, split-up of shares, change of par value, conversion or other
event relating to the securities or the issuer of such securities, and shall
deposit any such securities in accordance with the terms of any reorganization
or protective plan. The Custodian shall, without receiving Proper Instructions:
surrender securities in temporary form for definitive securities; surrender
securities for transfer into the name of the Custodian, a Portfolio or a nominee
of either of them, as permitted by Section 2.02(b); and surrender securities for
a different number of certificates or instruments representing the same number
of shares or same principal amount of indebtedness, provided that the securities
to be issued will be delivered to the Custodian or a nominee of the Custodian.
SECTION 2.05. SALES OF SECURITIES. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for the
account of a Portfolio, but only against payment therefor in the form of: (1)
cash, certified check, bank cashier's check, bank credit, or bank wire transfer;
(2) credit to the account of the Custodian with a clearing corporation of a
national securities exchange of which the Custodian is a member; or (3) credit
to the Account of the Custodian with a Securities System or Eligible Securities
Depository, in accordance with the provisions of Section 2.22(a) and Section
2.22(b) hereof. Notwithstanding the foregoing, upon the receipt of Proper
Instructions: (i) in the case of the sale of securities, the settlement of which
occurs outside of the United States of America, such securities shall be
delivered and paid for in accordance with local custom and practice generally
accepted by Institutional Clients in the country in which the settlement occurs,
but in all events subject to the standard of care set forth in Article V hereof
and to any Special Instructions given in accordance with Section 3.01(b); (ii)
in the case of the sale of securities in which, in accordance with standard
industry custom and practice generally accepted by Institutional Clients with
respect to such securities, the delivery of such securities and receipt of
payment therefor take place in different countries, the Custodian may deliver
such securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care set
forth in Article V hereof and to any Special Instructions given in accordance
with Section 3.01(b); (iii) in the case of securities held in physical form,
such securities shall be delivered and paid for in accordance with "street
delivery custom" to a broker or its clearing agent, against delivery to the
Custodian of a receipt for such securities, provided that the Custodian shall
have taken reasonable steps to ensure prompt collection of the payment for, or
the return of, such securities by the broker or its clearing agent, and provided
further that the Custodian shall not be responsible for the selection of or the
failure or inability to perform of such broker or its clearing agent; and (iv)
in the case of Central Fund shares, the Custodian shall release Central Fund
shares sold for the account of a Portfolio, PROVIDED THAT (A) the Custodian
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shall only send instructions to sell such shares to the Central Fund Transfer
Agent in accordance with the Central Fund Control Procedures ("CENTRAL FUND SELL
INSTRUCTIONS") upon receipt of Proper Instructions, and (B) such Central Fund
Sell Instructions shall be properly confirmed by the Central Fund Transfer
Agent. Except in the cases provided for in the immediately preceding sentences,
in any case where delivery of securities or other assets for the account of a
Portfolio is made by the Custodian in advance of receipt of payment for the
securities or other assets so sold in the absence of Proper Instruction to so
deliver in advance, the Custodian shall be absolutely liable to the Fund for
such payment to the same extent as if such payment had been received by the
Custodian.
SECTION 2.06. DEPOSITARY RECEIPTS. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"), against
a written receipt therefor adequately describing such securities and written
evidence satisfactory to the Custodian that the depositary has acknowledged
receipt of instructions to issue ADRs with respect to such securities in the
name of the Custodian or a nominee of the Custodian, for delivery to the
Custodian at such place as the Custodian may from time to time designate. Upon
receipt of Proper Instructions, the Custodian shall surrender ADRs to the issuer
thereof, against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depository to
deliver the securities underlying such ADRs to the Custodian.
SECTION 2.07. EXERCISE OF RIGHTS; TENDER OFFERS. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or
similar securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale, provided that the new
securities, cash or other assets, if any, acquired as a result of such actions
are to be delivered to the Custodian; and (b) deposit securities upon
invitations for tenders thereof, provided that the consideration for such
securities is to be paid or delivered to the Custodian, or the tendered
securities are to be returned to the Custodian. Notwithstanding any provision of
this Agreement to the contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary in Proper Instructions, to comply with
the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions,
or similar rights of security ownership, and shall promptly notify the Fund of
such action in writing by facsimile transmission or in such other manner as the
Fund and the Custodian may agree in writing.
SECTION 2.08. STOCK DIVIDENDS, RIGHTS, ETC. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and, upon
receipt of Proper Instructions, take action with respect to the same as directed
in such Proper Instructions.
SECTION 2.09. OPTIONS. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, the Fund on behalf of any applicable
Portfolio relating to compliance with the rules of the Options Clearing
Corporation or of any registered national securities exchange or similar
organization(s), the Custodian shall: (a) receive and retain confirmations or
other documents, if any, evidencing the purchase or writing of an option or swap
on a security or securities index by the applicable Portfolio; (b) deposit and
maintain in a segregated account, securities (either physically or by book-entry
in a Securities System), cash or other assets; and (c) pay, release and/or
transfer such securities, cash or other assets in accordance with notices or
other communications evidencing the expiration, termination or exercise of such
options furnished by the Options Clearing Corporation, the securities or options
exchange on which such options are traded, or such other organization as may be
responsible for handling such option transactions. The Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for the
sufficiency of assets held in any segregated account established in compliance
with applicable margin maintenance requirements and the performance of other
terms of any option contract.
SECTION 2.10. FUTURES CONTRACTS. Upon receipt of Proper Instructions, the
Custodian shall: (a) receive and retain confirmations, if any, evidencing the
purchase or sale of a futures contract or an option on a futures contract by the
applicable Portfolio; (b) deposit and maintain such cash, securities and other
assets designated as initial, maintenance or variation "margin" deposits
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intended to secure the applicable Portfolio's performance of its obligations
under any such futures contracts purchased or sold or any such options on
futures contracts written by the Portfolio (i) in a segregated account
established in accordance with the provisions of a futures margin procedural
agreement among the Fund, on behalf of any applicable Portfolio and any futures
commission merchant (a "Procedural Agreement"), designed to comply with the
rules of the Commodity Futures Trading Commission and/or any commodity exchange
or contract market (such as the Chicago Board of Trade), or any similar
organization(s), regarding such margin deposits (a "Segregated Futures Margin
Account"), or (ii) in a broker's margin account meeting the requirements of Rule
17f-6 under the 1940 Act, as the same may be amended from time to time (a
"Broker's Futures Margin Account"); and (c) release to the applicable Portfolio
any such assets held in a Segregated Futures Margin Account, or accept delivery
of such assets back from a Broker's Margin Account, as the case may be. In the
absence of Proper Instructions, the Custodian may release assets from and/or
transfer assets into a Segregated Futures Margin Account only in accordance with
the provisions of the applicable Procedural Agreement. The Fund, on behalf of
its applicable Portfolios, and the applicable futures commission merchant shall
be responsible for the sufficiency of assets held in a Segregated Futures Margin
Account or Broker's Futures Margin Account, as the case may be, in compliance
with applicable margin maintenance requirements and the performance of any
futures contract or option on a futures contract in accordance with its terms.
For purposes of determining the Custodian's obligations with respect to any
losses resulting from the acts or omissions of any futures commission merchant
holding Portfolio assets in a Broker's Futures Margin Account, such futures
commission merchant shall be deemed to be an Additional Custodian (as defined
below), and the Custodian's liability shall be governed by the provisions of
Section 5.02(c) hereof.
SECTION 2.11. BORROWING. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their agents, or
otherwise establish a segregated account as agreed to by the Fund on behalf of
such Portfolio and the Custodian, as collateral for borrowings effected by such
Portfolio, provided that such borrowed money is payable by the lender (a) to or
upon the Custodian's order, as Custodian for such Portfolio, and (b)
concurrently with delivery of such securities.
SECTION 2.12. INTEREST BEARING DEPOSITS. Upon receipt of Proper
Instructions directing the Custodian to purchase interest bearing fixed term and
call deposits (hereinafter referred to collectively, as "Interest Bearing
Deposits") for the account of a Portfolio, the Custodian shall purchase such
Interest Bearing Deposits in the name of the Portfolio with such banks or trust
companies (including the Custodian, any Subcustodian or any subsidiary or
affiliate of the Custodian) (hereinafter referred to as "Banking Institutions")
and in such amounts as the Fund may direct pursuant to Proper Instructions. Such
Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the Fund on behalf of its Portfolio may determine and direct
pursuant to Proper Instructions. The Custodian shall include in its records with
respect to the assets of each Portfolio appropriate notation as to the amount
and currency of each such Interest Bearing Bank Deposit, the accepting Banking
Institution and all other appropriate details, and shall retain such forms of
advice or receipt evidencing such account, if any, as may be forwarded to the
Custodian by the Banking Institution. The responsibilities of the Custodian to
the Fund for Interest Bearing Deposits accepted on the Custodian's books in the
United States of America on behalf of the Fund's Portfolios shall be that of a
U.S. bank for a similar deposit. With respect to Interest Bearing Deposits other
than those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and the
transmission of cash and instructions to and from such accounts; and (b) the
Custodian shall have no duty with respect to the selection of the Banking
Institution or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such Banking Institution to pay upon demand.
Upon receipt of Proper Instructions, the Custodian shall take such reasonable
actions as the Fund deems necessary or appropriate to cause each such Interest
Bearing Deposit Account to be insured to the maximum extent possible by all
applicable deposit insurers including, without limitation, the Federal Deposit
Insurance Corporation.
SECTION 2.13. FOREIGN EXCHANGE TRANSACTIONS.
(a) FOREIGN EXCHANGE TRANSACTIONS OTHER THAN AS PRINCIPAL. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery on
behalf of and for the account of a Portfolio with such currency brokers or
Banking Institutions as the Fund may determine and direct pursuant to Proper
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Instructions. The Custodian shall be responsible for the transmission of cash
and instructions to and from the currency broker or Banking Institution with
which the contract or option is made, the safekeeping of all certificates and
other documents and agreements evidencing or relating to such foreign exchange
transactions and the maintenance of proper records as set forth in Section 2.25.
The Custodian shall have no duty with respect to the selection of the currency
brokers or Banking Institutions with which the Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions to comply
with the terms of any contract or option.
(b) FOREIGN EXCHANGE CONTRACTS AS PRINCIPAL. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal. However, if
the Custodian has made available to the Fund its services as a principal in
foreign exchange transactions, upon receipt of Proper Instructions, the
Custodian shall enter into foreign exchange contracts or options to purchase and
sell foreign currencies for spot and future delivery on behalf of and for the
account of a Portfolio of the Fund with the Custodian as principal. The
Custodian shall be responsible for the selection of the currency brokers or
Banking Institutions and the failure of such currency brokers or Banking
Institutions to comply with the terms of any contract or option.
(c) PAYMENTS. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form of
U.S. Dollars or foreign currency prior to receipt of confirmation of such
foreign exchange contract or confirmation that the countervalue currency
completing such contract has been delivered or received.
SECTION 2.14. SECURITIES LOANS. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio, deliver
securities of such Portfolio to the borrower thereof in accordance with the
terms of the securities lending agreement to which the Fund is a party or which
is otherwise approved by the Fund or the "Operating Guidelines" as agreed to by
the Custodian.; provided that, in cases of loans of securities secured by cash
collateral, the Custodian's instructions to the Securities System shall require
that the Securities System deliver the securities of the Portfolio to the
borrower thereof only upon receipt of the collateral for such borrowing. Upon
receipt of Proper Instructions, the Custodian shall release the collateral
received in respect of a loan of securities to the borrower against receipt of
the loaned securities.
SECTION 2.15. COLLECTIONS. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to the Fund with respect to
portfolio securities and other assets of the Fund's Portfolios; (b) promptly
credit to the account of each applicable Portfolio all income and other payments
relating to portfolio securities and other assets held by the Custodian
hereunder upon Custodian's receipt of such income or payments or as otherwise
agreed in writing by the Custodian and the Fund; (c) promptly endorse and
deliver any instruments required to effect such collections; (d) promptly
execute ownership and other certificates and affidavits for all federal, state
and foreign tax purposes in connection with receipt of income, capital gains or
other payments with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or transfer of
such securities or other assets; and (e) promptly file any certificates or other
affidavits for the refund or reclaim of foreign taxes paid, and promptly notify
the Fund of any changes to law, interpretative rulings or procedures regarding
such reclaims, and otherwise use all available measures customarily used to
minimize the imposition of foreign taxes at source, and promptly inform the Fund
of alternative means of minimizing such taxes of which the Custodian shall
become aware (or with the exercise of reasonable care should have become aware);
provided all such payments are made in such form and manner and at such time as
is in accordance with the terms of the instrument representing the security,
such Proper Instructions as the Custodian may receive, governmental regulations,
the rules of the Securities System or Foreign Depository in which such
securities are held or, with respect to securities referred to in clauses (iii)
and (iv) of the second sentence of Section 2.03, in accordance with local and
standard industry custom and practice generally accepted by Institutional
Clients, however, that with respect to portfolio securities registered in
so-called street name, the Custodian shall use its best efforts to collect
amounts due and payable to the Fund with respect to its Portfolios. The
Custodian shall promptly notify the Fund in writing by facsimile transmission,
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or in such other manner as the Fund and the Custodian may agree in writing, if
any amount payable with respect to portfolio securities or other assets of the
Portfolios of the Fund is not received by the Custodian when due. The Custodian
shall not be responsible for the collection of amounts due and payable with
respect to portfolio securities or other assets that are in default.
SECTION 2.16. DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the Fund in
such Proper Instructions; or (b) upon receipt of Special Instructions, as
otherwise directed by the Fund, for the purpose of the payment of dividends or
other distributions to shareholders of each applicable Portfolio, and payment to
shareholders who have requested repurchase or redemption of their shares of the
Portfolio(s) (collectively, the "Shares"). For purposes of this Agreement, a
"Distribution Account" shall mean an account established at a Banking
Institution designated by the Fund on behalf of one or more of its Portfolios in
Special Instructions.
SECTION 2.17. PROCEEDS FROM SHARES SOLD. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from time to
time by the Fund, and shall promptly credit such funds to the account(s) of the
applicable Portfolio(s). The Custodian shall promptly notify the Fund of
Custodian's receipt of cash in payment for Shares issued by the Fund by
facsimile transmission or in such other manner as the Fund and Custodian may
agree in writing. Upon receipt of Proper Instructions, the Custodian shall: (a)
deliver all federal funds received by the Custodian in payment for Shares in
payment for such investments as may be set forth in such Proper Instructions and
at a time agreed upon between the Custodian and the Fund; and (b) make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the Custodian, in the amount of checks received in payment for
Shares which are deposited to the accounts of each applicable Portfolio.
SECTION 2.18. PROXIES, NOTICES, ETC. The Custodian shall deliver to the
Fund, in the most expeditious manner practicable, all forms of proxies, all
notices of meetings, and any other notices or announcements affecting or
relating to securities owned by one or more of the Fund's Portfolios that are
received by the Custodian, any Subcustodian, or any nominee of either of them
(or with the exercise of reasonable care that the Custodian, any Subcustodian,
or any nominee of either of them should have become aware), and, upon receipt of
Proper Instructions, the Custodian shall execute and deliver, or cause such
Subcustodian or nominee to execute and deliver, such proxies or other
authorizations as may be required. Except as directed pursuant to Proper
Instructions, neither the Custodian nor any Subcustodian or nominee shall vote
upon any such securities, or execute any proxy to vote thereon, or give any
consent or take any other action with respect thereto.
SECTION 2.19. BILLS AND OTHER DISBURSEMENTS. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
SECTION 2.20. NONDISCRETIONARY FUNCTIONS. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of each Portfolio held by the Custodian, except as otherwise directed
from time to time pursuant to Proper Instructions.
SECTION 2.21. BANK ACCOUNTS.
(a) ACCOUNTS WITH THE CUSTODIAN AND ANY SUBCUSTODIANS. The Custodian
shall open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian PROVIDED that such account(s) shall be in the name of the Custodian
or a nominee of the Custodian, for the account of a Portfolio, and shall be
subject only to the draft or order of the Custodian; and provided further,
however, that such Bank Accounts in countries other than the United States of
America may be held in an account of the Custodian containing only assets held
by the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are held
in such account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. The responsibilities of
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the Custodian to the Fund for deposits accepted on the Custodian's books in the
United States of America shall be that of a U.S. bank for a similar deposit. The
responsibilities of the Custodian to the Fund for deposits accepted on any
Subcustodian's books shall be governed by the provisions of Section 5.02.
(b) ACCOUNTS WITH OTHER BANKING INSTITUTIONS. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the Custodian or
a nominee of the Custodian, at a Banking Institution other than the Custodian or
any Subcustodian, provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio, and
shall be subject only to the draft or order of the Custodian; PROVIDED HOWEVER,
that such Bank Accounts may be held in an account of the Custodian containing
only assets held by the Custodian as a fiduciary or custodian for customers, and
PROVIDED FURTHER, that the records of the Custodian shall indicate at all times
the Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank Accounts
may be denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) DEPOSIT INSURANCE. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the Fund deems necessary or appropriate to
cause each deposit account established by the Custodian pursuant to this Section
2.21 to be insured to the maximum extent possible by all applicable deposit
insurers including, without limitation, the Federal Deposit Insurance
Corporation.
SECTION 2.22. DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS AND ELIGIBLE
SECURITIES DEPOSITORIES. (a) The Custodian may deposit and/or maintain domestic
securities owned by a Portfolio in: (1) The Depository Trust Company; (2) the
Participants Trust Company; (3) any book-entry system as provided in (i) Subpart
O of Treasury Circular Xx. 000, 00 XXX 306.115, (ii) Subpart B of Treasury
Circular Public Debt Series Xx. 00-00, 00 XXX 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the form of 31 CFR 306.115; or
(4) any other domestic clearing agency registered with the Securities and
Exchange Commission ("SEC") under Section 17A of the Securities Exchange Act of
1934 (or as may otherwise be authorized by the SEC to serve in the capacity of
depository or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which the Fund
has previously approved by Special Instructions (as hereinafter defined) (each
of the foregoing being referred to in this Agreement as a "Securities System").
Use of a Securities System shall be in accordance with applicable Federal
Reserve Board and SEC rules and regulations, if any, and subject to the
following provisions:
(1) The Custodian may deposit and/or maintain securities held
hereunder in a Securities System, provided that such securities are represented
in an account ("Account") of the Custodian in the Securities System which
Account shall not contain any assets of the Custodian other than assets held as
a fiduciary, custodian, or otherwise for customers and shall be so designated on
the books and records of the Securities System.
(2) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such Account and
shall not be entitled to a lien against the assets in such Account for
extensions of credit to the Custodian other than for payment of the purchase
price of such assets.
(3) The Fund hereby designates the Custodian as the party in
whose name any securities deposited by the Custodian in the Account are to be
registered or recorded.
(4) The books and records of the Custodian shall at all times
identify those securities belonging to each Portfolio, which are maintained in a
Securities System.
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(5) The Custodian shall pay for securities purchased for the
account of a Portfolio only upon (w) receipt of advice from the Securities
System that such securities have been transferred to the Account of the
Custodian, and (x) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of such Portfolio. The
Custodian shall transfer securities sold for the account of a Portfolio only
upon (y) receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of such Portfolio. Copies of all advices from the
Securities System relating to transfers of securities for the account of a
Portfolio shall identify such Portfolio and shall be maintained for such
Portfolio by the Custodian. The Custodian shall deliver to the Fund on the next
succeeding Business Day daily transaction reports, which shall include each
day's transactions in the Securities System for the account of each applicable
Portfolio. Such transaction reports shall be delivered to the Fund or any agent
designated by the Fund pursuant to Proper Instructions, by computer or in such
other manner as the Fund and the Custodian may agree in writing.
(6) The Custodian shall, if requested by the Fund pursuant to
Proper Instructions, provide the Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting system,
internal accounting control and procedures for safeguarding securities deposited
in the Securities System.
(7) Upon receipt of Special Instructions, the Custodian shall
terminate the use of any Securities System (except the federal book-entry
system) on behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of any Portfolio
maintained with such Securities System.
(b) The Custodian may deposit and/or maintain "Foreign Assets" (as
defined in Rule 17f-5 under the 1940 Act, as the same may be amended from time
to time ("Rule 17f-5")), owned by a Portfolio in a securities depository located
outside the United States of America that the Custodian has determined meets the
definition of "Eligible Securities Depository" under Rule 17f-7(b)(1) under the
1940 Act, as the same may be amended from time to time ("Rule 17f-7"), or that
has otherwise been made exempt pursuant to an exemptive order of the SEC or
no-action letter of the staff of the SEC (each of the foregoing being referred
to in this Agreement as an "Eligible Securities Depository"), PROVIDED THAT
prior to the deposit or maintenance of Foreign Assets of the Fund with a
securities depository located outside the United States of America, the
Custodian shall have certified in writing to the Fund, on behalf of its
Portfolios, that the securities depository is an "Eligible Securities
Depository". Use of an Eligible Securities Depository shall be in accordance
with applicable SEC rules and regulations, in particular Rule 17f-7 under the
1940 Act, and subject to the following provisions:
(1) The Custodian or any Subcustodian may deposit and/or
maintain Foreign Assets held hereunder in an Eligible Securities Depository,
provided that such Foreign Assets are represented in an Account of the Custodian
or Subcustodian in the Eligible Securities Depository which Account shall not
contain any assets of the Custodian or Subcustodian other than assets held as a
fiduciary, custodian, or otherwise for customers and shall be so designated on
the books and records of the Eligible Securities Depository unless the Fund by
Special Instructions permits another manner of holding, representing and/or
designating the Fund's Foreign Assets.
(2) The Custodian shall, in accordance with the standard of care
set forth in Section 5.01(a) hereof, be responsible for: (A) providing the Fund
or its designee, on behalf of its applicable Portfolio(s), an analysis (in form
and substance reasonably satisfactory to the Fund) of the custody risks
associated with maintaining Foreign Assets with the Eligible Securities
Depository; (B) establishing a system to monitor the custody risks associated
with maintaining Foreign Assets with the Eligible Securities Depository; (C)
monitoring the custody risks associated with maintaining Foreign Assets with the
Eligible Securities Depository on a continuing basis; and (D) promptly notifying
the Fund of any material change in the custody risks associated with maintaining
Foreign Assets with the Eligible Securities Depository.
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(3) The Eligible Securities Depository shall be obligated to
comply with the Custodian's or Subcustodian's directions with respect to the
Foreign Assets held in such Account, PROVIDED THAT the Foreign Assets held in
such Account shall not be subject to any right, charge, security interest, lien
or claim of any kind in favor of the Custodian or Subcustodian (or either of
their respective creditors), except a claim for reasonable payment for their
safe custody or administration.
(4) The Fund hereby designates the Custodian or each
Subcustodian as the party in whose name any Foreign Assets deposited by the
Custodian or the Subcustodian in the Account are to be registered or recorded,
provided, however, that the Custodian may register or record Foreign Assets of
the Fund in the name of the Fund or other nominee for the Fund upon the
Custodian's provision of written notice to the Fund of such proposed
registration or recordation at least 5 Business Days prior to such registration
or recordation.
(5) The books and records of the Custodian shall at all times
identify those Foreign Assets belonging to each Portfolio, which are maintained
in an Eligible Securities Depository.
(6) The Custodian shall pay for Foreign Assets purchased for the
account of a Portfolio only upon (w) receipt of advice from the Eligible
Securities Depository that such Foreign Assets have been transferred to the
Account of the Custodian or Subcustodian, and (x) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the account of
such Portfolio, PROVIDED HOWEVER, if required under the laws of the jurisdiction
in which the Eligible Securities Depository is located or pursuant to the rules
of an Eligible Securities Depository, the Custodian may receive delivery of such
securities and make payment therefor in accordance with such applicable laws or
rules of the Eligible Securities Depository, but in all events subject to the
standard of care set forth in Section 5.01(a) hereof. The Custodian or
Subcustodian shall transfer Foreign Assets sold for the account of a Portfolio
only upon (y) receipt of advice from the Eligible Securities Depository that
payment for such Foreign Assets has been transferred to the Account of the
Custodian or Subcustodian, and (z) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of such
Portfolio, PROVIDED HOWEVER, if required under the laws of the jurisdiction in
which the Eligible Securities Depository is located or pursuant to the rules of
an Eligible Securities Depository, the Custodian may make payment therefor and
receive delivery of such securities in accordance with such applicable laws or
rules of the Eligible Securities Depository, but in all events subject to the
standard of care set forth in Section 5.01(a) hereof. Copies of all advices from
the Eligible Securities Depository relating to transfers of Foreign Assets for
the account of a Portfolio shall identify such Portfolio or the Custodian or
Subcustodian who is holding the assets of such Portfolio and shall be maintained
for such Portfolio by the Custodian. The Custodian shall deliver to the Fund no
later than the next succeeding Business Day, or at such other time or times as
the Fund and the Custodian may agree in writing, daily transaction reports which
shall include each day's transactions in the Eligible Securities Depository for
the account of each applicable Portfolio. Such transaction reports shall be
delivered to the Fund or any agent designated by the Fund pursuant to Proper
Instructions, by electronic device or system (including without limitation,
computers) or in such other manner as the Fund and the Custodian may agree in
writing.
(7) The Custodian shall, if requested by the Fund or its
designee pursuant to Proper Instructions, provide the Fund with all reports
obtained by the Custodian or any Subcustodian with respect to an Eligible
Securities Depository's accounting system, internal accounting controls, and
procedures for safeguarding Foreign Assets deposited in the Eligible Securities
Depository.
(8) The Custodian (A) shall terminate the use of any Eligible
Securities Depository on behalf of any Portfolio as soon as reasonably
practicable and shall take all actions reasonably practicable to safeguard the
Foreign Assets of any Portfolio maintained with such Eligible Securities
Depository: (1) upon receipt of Special Instructions; or (2), in the absence of
the receipt of Special Instructions, if the custody arrangement with the
Eligible Securities Depository at any time ceases to satisfy the requirements of
Rule 17f-7(b)(1), and (B) shall provide the Fund or their respective designees,
on behalf of the Portfolios, with written notification of any termination of the
Custodian's use of an Eligible Securities Depository at least 90 days prior to
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the effective date of the proposed termination, unless the Fund in their
discretion permit a shorter notification period.
(9) Each Eligible Securities Depository through which the
Custodian maintains Foreign Assets of the applicable Portfolio(s) and the
countries where they may hold Foreign Assets of the applicable Portfolio(s)
shall be listed on APPENDIX "A" attached hereto, as the same may be amended from
time to time in accordance with the provisions of Section 9.06(c) hereof.
SECTION 2.23. OTHER TRANSFERS.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer to
or receive from a third party that has been appointed to serve as an additional
custodian of one or more Portfolios (an "Additional Custodian") securities, cash
and other assets of such Portfolio(s) in accordance with such Proper
Instructions. Each Additional Custodian shall be identified as such on APPENDIX
"A", as the same may be amended from time to time in accordance with the
provisions of Section 9.06(c) hereof.
(b) Upon receipt of Special Instructions, the Custodian shall make such
other dispositions of securities, funds or other property of a Portfolio in a
manner or for purposes other than as expressly set forth in this Agreement,
provided that the Special Instructions relating to such disposition shall
include a statement of the purpose for which the delivery is to be made, the
amount of funds and/or securities to be delivered, and the name of the person or
persons to whom delivery is to be made, and shall otherwise comply with the
provisions of Sections 3.01 and 3.03 hereof.
SECTION 2.24. ESTABLISHMENT OF SEGREGATED ACCOUNT. Upon receipt of Proper
Instructions, the Custodian shall establish and maintain on its books a
segregated account or accounts for and on behalf of a Portfolio, into which
account or accounts may be transferred cash and/or securities or other assets of
such Portfolio, including securities maintained by the Custodian in a Securities
System pursuant to Section 2.22(a) hereof or an Eligible Securities Depository
pursuant to Section 2.22(b) hereof, said account or accounts to be maintained:
(a) for the purposes set forth in Sections 2.09, 2.10 and 2.11 hereof; (b) for
the purposes of compliance by the Portfolio with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the SEC or SEC rules or regulations relating to the maintenance of segregated
accounts by registered investment companies; or (c) for such other purposes as
set forth, from time to time, in Special Instructions.
SECTION 2.25. CUSTODIAN'S BOOKS AND RECORDS. The Custodian shall provide
any assistance reasonably requested by the Fund in the preparation of reports to
the Fund's shareholders and others, audits of accounts, and other ministerial
matters of like nature. The Custodian shall maintain complete and accurate
records with respect to securities and other assets held for the accounts of
each Portfolio as required by the rules and regulations of the SEC applicable to
investment companies registered under the 1940 Act, including: (a) journals or
other records of original entry containing a detailed and itemized daily record
of all receipts and deliveries of securities (including certificate and
transaction identification numbers, if any), and all receipts and disbursements
of cash; (b) ledgers or other records reflecting (i) securities in transfer,
(ii) securities in physical possession, (iii) securities borrowed, loaned or
collateralizing obligations of each Portfolio, (iv) monies borrowed and monies
loaned (together with a record of the collateral therefor and substitutions of
such collateral), (v) dividends and interest received, (vi) the amount of tax
withheld by any person in respect of any collection made by the Custodian or any
Subcustodian, and (vii) the amount of reclaims or refunds for foreign taxes
paid; and (c) cancelled checks and bank records related thereto. The Custodian
shall keep such other books and records of the Fund as the Fund shall reasonably
request. All such books and records maintained by the Custodian shall be
maintained in a form acceptable to the Fund and in compliance with the rules and
regulations of the SEC, including, but not limited to, books and records
required to be maintained by Section 31(a) of the 1940 Act and the rules and
regulations from time to time adopted thereunder. All books and records
maintained by the Custodian pursuant to this Agreement shall at all times be the
property of the Fund and shall be available during normal business hours for
inspection and use by the Fund and its agents, including, without limitation,
its independent certified public accountants. Notwithstanding the preceding
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sentence, the Fund shall not take any actions or cause the Custodian to take any
actions, which would cause, either directly or indirectly, the Custodian to
violate any applicable laws, regulations or orders.
SECTION 2.26. OPINION OF FUND'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The Custodian shall take all reasonable action as the Fund may request to obtain
from year to year favorable opinions from the Fund's independent certified
public accountants with respect to the Custodian's activities hereunder in
connection with the preparation of the Fund's Form N-1A and the Fund's Form
N-SAR or other periodic reports to the SEC and with respect to any other
requirements of the SEC or the 1940 Act and the rules and regulations
thereunder.
SECTION 2.27. REPORTS BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. At the
request of the Fund, the Custodian shall deliver to the Fund a written report
prepared by the Custodian's independent certified public accountants with
respect to the services provided by the Custodian under this Agreement,
including, without limitation, the Custodian's accounting system, internal
accounting control and procedures for safeguarding cash, securities and other
assets, including cash, securities and other assets deposited and/or maintained
in a Securities System, Eligible Securities Depository or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund and as may reasonably be obtained by the
Custodian.
SECTION 2.28. OVERDRAFT FACILITY. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on the
date of such payment or transfer, insufficient funds held by the Custodian on
behalf of such Portfolio, the Custodian may, in its discretion, provide an
overdraft (an "Overdraft") to the Fund on behalf of such Portfolio, in an amount
sufficient to allow the completion of such payment. Any Overdraft provided
hereunder: (a) shall be payable on the next Business Day, unless otherwise
agreed by the Fund and the Custodian; and (b) shall accrue interest from the
date of the Overdraft to the date of payment in full by the Fund on behalf of
the applicable Portfolio at a rate agreed upon in writing, from time to time, by
the Custodian and the Fund. The Custodian and the Fund acknowledge that the
purpose of such Overdrafts is to temporarily finance the purchase or sale of
securities for prompt delivery in accordance with the terms hereof, or to meet
emergency expenses not reasonably foreseeable by the Fund. The Custodian shall
promptly notify the Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as the Fund and the Custodian may
agree in writing. At the request of the Custodian, the Fund, on behalf of one or
more of its Portfolios, shall pledge, assign and grant to the Custodian a
security interest in certain specified securities of the applicable Portfolio,
as security for Overdrafts provided to such Portfolio, under the terms and
conditions set forth in APPENDIX "B" attached hereto. Notwithstanding anything
herein to the contrary, except to the extent expressly provided for in APPENDIX
"B", the Custodian hereby waives and agrees that it shall not claim, assert or
enforce a lien, encumbrance or security interest in any of the assets of any
Portfolio.
SECTION 2.29. INSURANCE REQUIREMENTS.
(a) The Custodian shall, at its own expense,
procure and maintain: (i) workers
compensation insurance for its own employees
in an amount not less than the statutory
limits under all applicable statutes, rules
and regulations in each of the states in
which Custodian operates and under all
applicable federal statutes, rules and
regulations, (ii) employers liability
insurance in an amount not less than
$1,000,000 per occurrence, (iii)
comprehensive general liability insurance in
an amount not less than $1,000,000 per
occurrence, (iv) comprehensive automobile
liability (including automobile
non-ownership liability) insurance in a
combined single limit amount of not less
than $1,000,000 per occurrence, (v) umbrella
or excess liability insurance providing
coverages in excess of the coverages listed
in (ii), (iii) and (iv) above in an amount
not less than $5,000,000 per occurrence,
(vi) errors and omission liability insurance
in an amount not less than $10,000,000 per
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claim, (vii) a fidelity bond in an amount
not less than $10,000,000 per loss, and
(vii) electronic and computer crime
insurance in an amount not less than
$10,000,000 per loss, PROVIDED HOWEVER that
the term "Custodian" in this Section 2.29
shall not include a Subcustodian or Eligible
Securities Depository. Nothing in this
Section 2.29 shall be deemed to limit the
Custodian's liability to the types or
coverage amounts specified above or to limit
any coverage under any of Custodian's
insurance policies.
(b) Concurrent with the execution of this
Agreement, Custodian shall provide a
"certificate of insurance" to the Fund that
evidences that policies, bonds or similar
agreements providing the types and amounts
of coverage specified in paragraph (a) of
this section 2.29 have been entered into and
are in full force and effect.
SECTION 2.30. PROVISION OF INFORMATION. At the request of the Fund, the
Custodian shall promptly provide to the Fund all information relating to the
Fund's, or any of its Portfolio's, cash, securities, and other assets which may
be reasonably requested by the Fund in order to determine the amount to be paid
to the Custodian under Article VI hereof. Such information shall be delivered to
the Fund at such time(s) and in such form(s) specified by the Fund.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
SECTION 3.01. PROPER INSTRUCTIONS AND SPECIAL INSTRUCTIONS.
(a) PROPER INSTRUCTIONS. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification signed
or initialed by or on behalf of the Fund by one or more Authorized Persons (as
hereinafter defined); (ii) a telephonic or other oral communication by one or
more Authorized Persons; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) by or on behalf of the Fund by one or more Authorized
Persons; PROVIDED, HOWEVER, that communications of the types described in
clauses (ii) and (iii) above purporting to be given by an Authorized Person
shall be considered Proper Instructions only if the Custodian reasonably
believes such communications to have been given by an Authorized Person with
respect to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the Fund by tested telex or in writing in
the manner set forth in clause (i) above, but the lack of such confirmation
shall in no way affect any action taken by the Custodian in reliance upon such
oral instructions prior to the Custodian's receipt of such confirmation. Proper
Instructions may relate to specific transactions or to types or classes of
transactions, and may be in the form of standing instructions.
(b) SPECIAL INSTRUCTIONS. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the Fund or any other person designated
by the Treasurer of the Fund in writing, which countersignature or confirmation
shall be (i) included on the same instrument containing the Proper Instructions
or on a separate instrument relating thereto, and (ii) delivered by hand, by
facsimile transmission, or in such other manner as the Fund and the Custodian
agree in writing.
(c) ADDRESS FOR PROPER INSTRUCTIONS AND SPECIAL INSTRUCTIONS. Proper
Instructions and Special Instructions shall be delivered to the Custodian at the
address and/or telephone, telecopy or telex number agreed upon from time to time
by the Custodian and the Fund.
SECTION 3.02. AUTHORIZED PERSONS. Concurrently with the execution of this
Agreement and from time to time thereafter, as appropriate, the Fund shall
deliver to the Custodian, duly certified as appropriate by a Treasurer or any
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Assistant Treasurer of the Fund, a certificate setting forth: (a) the names,
titles, signatures and scope of authority of all persons authorized to give
Proper Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of the Fund (collectively, the "Authorized
Persons" and individually, an "Authorized Person"); and (b) the names, titles
and signatures of those persons authorized to issue Special Instructions. Such
certificate may be accepted and relied upon by the Custodian as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until delivery to the Custodian of a similar certificate to the
contrary. Upon delivery of a certificate which deletes the name(s) of a person
previously authorized by the Fund to give Proper Instructions or to issue
Special Instructions, such persons shall no longer be considered an Authorized
Person or authorized to issue Special Instructions for the Fund.
SECTION 3.03. PERSONS HAVING ACCESS TO ASSETS OF THE PORTFOLIOS.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Director, officer, employee or agent of the Fund shall have
physical access to the assets of any Portfolio of the Fund held by the Custodian
nor shall the Custodian deliver any assets of a Portfolio for delivery to an
account of such person; PROVIDED, HOWEVER, that nothing in this Section 3.03
shall prohibit (a) any Authorized Person from giving Proper Instructions, or any
person authorized to issue Special Instructions from issuing Special
Instructions, so long as such action does not result in delivery of or access to
assets of any Portfolio prohibited by this Section 3.03; or (b) the Fund's
independent certified public accountants from examining or reviewing the assets
of the Portfolios of the Fund held by the Custodian. The Fund shall deliver to
the Custodian a written certificate identifying such Authorized Persons,
Directors, officers, employees and agents of the Fund.
SECTION 3.04. ACTIONS OF CUSTODIAN BASED ON PROPER INSTRUCTIONS AND
SPECIAL INSTRUCTIONS. So long as and to the extent that the Custodian acts in
accordance with (a) Proper Instructions or Special Instructions, as the case may
be, and (b) the terms of this Agreement, the Custodian shall not be responsible
for the title, validity or genuineness of any property, or evidence of title
thereof, received by it or delivered by it pursuant to this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to act on
behalf of a Portfolio. (For purposes of this Agreement, all duly appointed
Domestic Subcustodians, Foreign Subcustodians, Interim Subcustodians, and
Special Subcustodians are hereinafter referred to collectively, as
"Subcustodians.")
SECTION 4.01. DOMESTIC SUBCUSTODIANS. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the 1940
Act meeting the requirements of a custodian under Section 17(f) of the 1940 Act
and the rules and regulations thereunder, to act on behalf of one or more
Portfolios as a subcustodian for purposes of holding cash, securities and other
assets of such Portfolios and performing other functions of the Custodian within
the United States (a "Domestic Subcustodian"); provided that, the Custodian
shall notify the Fund in writing of the identity and qualifications of any
proposed Domestic Subcustodian at least thirty (30) days prior to appointment of
such Domestic Subcustodian, and the Fund may, in its sole discretion, by written
notice to the Custodian executed by an Authorized Person disapprove of the
appointment of such Domestic Subcustodian. If, following notice by the Custodian
to the Fund regarding appointment of a Domestic Subcustodian and the expiration
of thirty (30) days after the date of such notice, the Fund shall have failed to
notify the Custodian of its disapproval thereof, the Custodian may, in its
discretion, appoint such proposed Domestic Subcustodian as its subcustodian.
SECTION 4.02. FOREIGN SUBCUSTODIANS AND INTERIM SUBCUSTODIANS.
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(a) FOREIGN SUBCUSTODIANS. Subject to and in accordance with the
following provisions, the Board of Directors or other governing body or entity
of the Fund, on behalf of its applicable Portfolio(s), hereby delegates its
responsibilities as set forth in Rule 17f-5 under the 1940 Act, to the Custodian
and appoints the Custodian as its "Foreign Custody Manager" (as such term is
defined in Rule 17f-5), and the Custodian hereby accepts such delegation and
appointment and agrees to (1) act on behalf of the Fund and Portfolio(s) in such
capacity, (2) perform the responsibilities set forth in Rule 17f-5, and (3)
exercise the standard of care set forth in Section 5.01(a) hereof in performing
its responsibilities hereunder and under Rule 17f-5, except to the extent Rule
17f-5 provides a higher standard, in which case that standard shall apply.
(i) Subject to and in accordance with the provisions of Rule
17f-5, the Custodian may, at its own expense, at any time and from time
to time, appoint: (A) any "Qualified Foreign Bank" (as such term is
defined in Rule 17f-5), (B) any majority-owned direct or indirect
subsidiary of a "U.S. Bank" (as such term is defined in Rule 17f-5) or
U.S. bank holding company meeting the requirements of an "Eligible
Foreign Custodian," (as such term is defined in Rule 17f-5), (C) any
other entity which by order of the SEC, or by no-action letter of the
staff of the SEC is exempt from meeting the requirements of an "Eligible
Foreign Custodian" as set forth in Rule 17f-5, to act on behalf of the
Fund and Portfolio(s) as a subcustodian for purposes of holding "Foreign
Assets" (as defined in Rule 17f-5), or (D) any "Bank" (as such term is
defined in the 0000 Xxx) that qualifies as and may serve as a custodian
under Section 17(f) of the 1940 Act (each a "Foreign Subcustodian").
(ii) Without limiting the foregoing, the Custodian shall be
responsible for (A) determining that the Fund's or Portfolio's Foreign
Assets, if maintained with each Foreign Subcustodian, will be subject to
the standard of care set forth in Section 5.01(a) hereof after
considering all factors relevant to the safekeeping of such assets
including, without limitation, those factors set forth in the provisions
of paragraph (c)(1) of Rule 17f-5, (B) ensuring that each foreign
custody arrangement with a Foreign Subcustodian is governed by a written
contract with the Custodian meeting the requirements of paragraph (c)(2)
of Rule 17f-5 which will provide reasonable care for the Fund's or
Portfolio's Foreign Assets based on the standard of care set forth in
Section 5.01(a) hereof, (C) determining that each contract with a
Foreign Custodian shall include the provisions specified in paragraph
(c)(2)(i)(A) through (F) of Rule 17f-5 or alternatively, in lieu of any
or all of such (c)(2)(i)(A) through (F) provisions, such other
provisions as the Custodian reasonably determines will provide, in their
entirety, the same or greater level of care and protection for the
Foreign Assets of the Fund or Portfolio as such specified provisions in
their entirety, (D) establishing a system to monitor the appropriateness
of maintaining the Fund's or Portfolio's Foreign Assets with each
Foreign Subcustodian pursuant to paragraph (c)(1) of Rule 17f-5 and to
monitor the performance of each Foreign Subcustodian under the
subcustodian agreement between the Custodian and the Foreign
Subcustodian, (E) monitoring the appropriateness of maintaining the
Fund's and Portfolio's Foreign Assets with each Foreign Subcustodian
pursuant to paragraph (c)(1) of Rule 17f-5 and the performance of each
Foreign Subcustodian under the subcustodian agreement between the
Custodian and the Foreign Subcustodian, and (F) promptly notifying the
Fund or Portfolio whenever an arrangement described in the preceding
clause (E) no longer satisfies the requirements of Rule 17f-5 and,
unless otherwise instructed, withdrawing the Fund's and Portfolio's
Foreign Assets from the non-complying arrangement as soon as reasonably
practical, provided however, that if in the reasonable judgment of the
Custodian such withdrawal would require liquidation of any of the Fund's
Foreign Assets or would materially impair the liquidity, value or other
investment characteristics of the Fund's or Portfolio's Foreign Assets,
it shall be the duty of the Custodian to provide information regarding
the particular circumstances and to act only in accordance with Proper
Instructions of the Fund with respect to such liquidation or withdrawal.
(iii) The Custodian shall prepare written reports to the Board
of Directors or other governing body or entity of the Fund, on behalf of
its applicable Portfolio(s), on an annual basis showing (A) the identity
and qualifications of each Foreign Subcustodian authorized by the
Custodian to hold Foreign Assets of the Fund and Portfolio(s), (B) the
placement of the Fund's and Portfolio's Foreign Assets with each such
Foreign Subcustodian, (C) the country or countries in which each Foreign
Subcustodian is authorized to hold Foreign Assets of the Fund and
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Portfolio(s) and (D) any material changes to the Custodian's foreign
custody arrangements for the Fund and Portfolio(s) since the submission
of the Custodian's last written report to the Fund's Board of Directors
or other governing body or entity pursuant to this Section 4.02(a)(iii),
including without limitation:
(1) changes in the Foreign Subcustodians included in the
Custodian's global custody network or arrangements;
(2) any change, including any amendment or modification to the
subcustodian agreements between the Custodian and each of
the Foreign Subcustodians, that could materially affect
the ability of a Foreign Subcustodian to perform its
duties in respect of the Fund, or Portfolios' Foreign
Assets.
In addition to the annual reports required by clause (a) (iii) above,
the Custodian shall submit promptly (but in no event later than 5
Business Days after the event giving rise to a reporting requirement)
interim reports to the Board of Directors or other governing body or
entity of the Fund, on behalf of its applicable Portfolio(s), of any
changes that could materially affect the ability of a Foreign
Subcustodian to perform its duties in respect of the Fund's and
Portfolios' assets and any actions that the Custodian has taken or
proposes to take in connection with such changes.
(iv) Each duly appointed Foreign Subcustodian and the countries
where and clearing agencies through which they may hold Foreign Assets
of the Fund and Portfolio(s) shall be listed on APPENDIX "A" attached
hereto and dated as of the date of this Agreement, as the same may be
amended from time to time, in accordance with the provisions of Section
9.06(c) hereof.
(v) The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment by itself or by one of
its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be
sufficient time for the Custodian to effect the appropriate arrangements
with a proposed foreign subcustodian.
(vi) The Custodian shall provide the Fund or their respective
designees, on behalf of their Portfolios, with written notification of
any (A) proposed change in the Foreign Subcustodians included in the
Custodian's global custody network or arrangements at least 60 Business
Days prior to the effective date of the proposed change, or (B)
termination, in whole or with respect to one or more specified
jurisdictions, of its acceptance of the Board of Directors or other
governing body or entity of the Fund, on behalf of its applicable
Portfolio(s), delegation and appointment as the Fund's "Foreign Custody
Manager" at least 90 days prior to the effective date of the proposed
termination, unless, in either case, the Fund in its discretion permit a
shorter notification period.
(b) INTERIM SUBCUSTODIANS. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the Custodian
shall promptly notify the Fund in writing by facsimile transmission or in such
other manner as the Fund and Custodian shall agree in writing of the
unavailability of an approved Foreign Subcustodian in such country; and the
Custodian shall, upon receipt of Special Instructions, appoint any Person
designated by the Fund in such Special Instructions to hold such security or
other asset. The subcustodian agreement between the Custodian and any Interim
Custodian (as hereinafter defined) shall comply with the provisions of the 1940
Act and the rules and regulations thereunder (including Rule 17f-5, if
applicable) and the terms and provisions of this Agreement. The Custodian shall
comply with Section 4.02 (a)(i), (ii), (iii), and (vi) hereof with respect to
the appointment of an Interim Custodian. (Any Person appointed as a subcustodian
pursuant to this Section 4.02(b) is hereinafter referred to as an "Interim
Subcustodian.")
SECTION 4.03. SPECIAL SUBCUSTODIANS. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more Portfolios, appoint
one or more banks, trust companies or other entities designated in such Special
Instructions to act as a subcustodian for purposes of: (i) effecting third-party
repurchase transactions with banks, brokers, dealers or other entities through
the use of a common custodian or subcustodian; (ii) establishing a joint trading
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account for the applicable Portfolio(s) and other registered open-end management
investment companies managed by the Fund's investment adviser, through which
such Portfolios and such other investment companies shall collectively
participate in certain repurchase transactions; (iii) providing depository and
clearing agency services with respect to certain variable rate demand note
securities; and (iv) effecting any other transactions designated by Fund in
Special Instructions. (Each such designated subcustodian is hereinafter referred
to as a "Special Subcustodian.") Each such duly appointed Special Subcustodian
shall be listed on APPENDIX "A" attached hereto, as it may be amended from time
to time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian shall
enter into a subcustodian agreement with the Special Subcustodian in form and
substance approved by Fund, provided that such agreement shall in all events
comply with the provisions of the 1940 Act and the rules and regulations
thereunder (including Rule17f-5, if applicable) and the terms and provisions of
this Agreement. If any Special Custodian is a Foreign Custodian, the Custodian
shall comply with Section 4.02 of this Agreement. The Custodian shall not amend
any subcustodian agreement entered into with a Special Subcustodian, or agree to
change or permit any changes thereunder, or waive any rights under such
agreement, except upon prior approval pursuant to Special Instructions.
SECTION 4.04. TERMINATION OF A SUBCUSTODIAN. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use its
best efforts to cause each Interim Subcustodian and Special Subcustodian to,
perform all of its obligations in accordance with the terms and conditions of
the subcustodian agreement between the Custodian and such Subcustodian. In the
event that the Custodian is unable to cause such Subcustodian to fully perform
its obligations thereunder, the Custodian shall forthwith, upon the receipt of
Special Instructions, terminate such Subcustodian with respect to Fund and, if
necessary or desirable, appoint a replacement Subcustodian in accordance with
the provisions of Section 4.01 or Section 4.02, as the case may be. In addition
to the foregoing, the Custodian (A) may, at any time in its discretion, upon
written notification to the Fund, terminate any Domestic Subcustodian, Foreign
Subcustodian or Interim Subcustodian, and (B) shall, upon receipt of Special
Instructions, terminate any Subcustodian with respect to Fund, in accordance
with the termination provisions under the applicable subcustodian agreement.
SECTION 4.05. CERTIFICATION REGARDING FOREIGN SUBCUSTODIANS. Each report
presented to the Board of Directors of the Fund, on behalf of itself or its
applicable Portfolio(s), by the Custodian pursuant to Section 4.02(a)(iii) above
shall be accompanied by a certificate representing that (A) the Custodian has
established a system to monitor the appropriateness of maintaining the Fund's or
Portfolio's Foreign Assets with each Foreign Subcustodian pursuant to paragraph
(c)(1) of Rule 17f-5 and to monitor the performance of each Foreign Subcustodian
under the subcustodian agreement between the Custodian and the Foreign
Subcustodian, (B) the Custodian has monitored all Foreign Subcustodians and each
Foreign Subcustodian continues to be an "Eligible Foreign Custodian," (as such
term is defined in Rule 17f-5), (C) each Foreign Subcustodian continues to
provide the standard of care set forth in Section 5.01(a) hereof, after
considering all relevant factors, including without limitation, those factors
set forth in paragraph (c)(1) of Rule 17f-5, (D) all foreign custody agreements
between the Custodian and the Foreign Subcustodians continue to meet the
requirements of paragraph (c)(2) of Rule 17f-5, (E) since the submission of the
last report pursuant to Section 4.02(a)(iii) above, there have been no material
adverse changes to the Custodian's foreign custody network or arrangements other
than those reported to the Board of Directors or other governing body or entity
of the Fund, on behalf of itself or its applicable Portfolios, in the
accompanying report, and (F) the information included in the report is true,
accurate and complete in all material respects.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
SECTION 5.01. STANDARD OF CARE.
(a) GENERAL STANDARD OF CARE. The Custodian shall exercise reasonable
care, prudence and diligence in carrying out all of its duties and obligations
under this Agreement, and shall be liable to each Fund for all losses, damages
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and expenses suffered or incurred by the Fund or its Portfolio(s) resulting from
the failure of the Custodian to exercise such reasonable care and diligence.
(b) ACTIONS PROHIBITED BY APPLICABLE LAW, ETC. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian,
Securities System or Eligible Securities Depository, or any subcustodian,
securities depository or securities system utilized by any such Subcustodian, or
any nominee of the Custodian or any Subcustodian (individually, a "Person") is
prevented, forbidden or delayed from performing, or omits to perform, any act or
thing which this Agreement provides shall be performed or omitted to be
performed, by reason of: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or of
any foreign country, or political subdivision thereof or of any court of
competent jurisdiction; or (ii) any act of God or war or other similar
circumstance beyond the control of the Custodian, unless, in each case, such
delay or nonperformance is caused by (A) the negligence, misfeasance or
misconduct of the applicable Person, or (B) a malfunction or failure of
equipment operated or utilized by the applicable Person other than a malfunction
or failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) MITIGATION BY CUSTODIAN. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to the Fund or Portfolio, (i)
the Custodian shall promptly notify the Fund or Portfolio of the occurrence of
such event, (ii) the Custodian shall cause any applicable Domestic Subcustodian
or Foreign Subcustodian to, and (iii) the Custodian shall use its best efforts
to cause any applicable Interim Subcustodian, Special Subcustodian or Eligible
Securities Depository to, use all commercially reasonable efforts and take all
reasonable steps under the circumstances to mitigate the effects of such event
and to avoid continuing harm to the Fund and the Portfolios.
(d) ADVICE OF COUNSEL. The Custodian shall be entitled to receive and
act upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant to
the advice of (i) counsel for the Fund, or (ii) at the expense of the Custodian,
such other counsel as the Fund and the Custodian may agree upon; PROVIDED
HOWEVER, with respect to the performance of any action or omission of any action
upon such advice, the Custodian shall be required to conform to the standard of
care set forth in Section 5.01(a).
(e) EXPENSES OF THE FUND. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to the Fund for all
reasonable costs and expenses incurred by the Fund in connection with any claim
by the Fund against the Custodian arising from the obligations of the Custodian
hereunder, including, without limitation, all reasonable attorneys' fees and
expenses incurred by the Fund in asserting any such claim, and all expenses
incurred by the Fund in connection with any investigations, lawsuits or
proceedings relating to such claim; PROVIDED THAT, the Fund has recovered from
the Custodian for the claim.
(f) LIABILITY FOR PAST RECORDS. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by the Fund, insofar as such
loss, damage or expense arises from the performance of the Custodian's duties
hereunder by reason of the Custodian's reliance upon records that were
maintained for the Fund by entities other than the Custodian prior to the
Custodian's appointment as custodian for the Fund.
SECTION 5.02. LIABILITY OF CUSTODIAN FOR ACTIONS OF OTHER PERSONS.
(a) DOMESTIC SUBCUSTODIANS AND FOREIGN SUBCUSTODIANS. The Custodian
shall be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission was
performed by the Custodian itself. In the event of any loss, damage or expense
suffered or incurred by the Fund caused by or resulting from the actions or
omissions of any Domestic Subcustodian or Foreign Subcustodian for which the
Custodian would otherwise be liable, the Custodian shall promptly reimburse the
Fund in the amount of any such loss, damage or expense.
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(b) INTERIM SUBCUSTODIANS. Notwithstanding the provisions of Section
5.01 to the contrary, the Custodian shall not be liable to the Fund for any
loss, damage or expense suffered or incurred by the Fund or any of its
Portfolios resulting from the actions or omissions of an Interim Subcustodian
unless such loss, damage or expense is caused by, or results from, the
negligence, misfeasance or misconduct of the Custodian; PROVIDED HOWEVER, in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against such Interim
Subcustodian to protect the interests of the Fund and the Portfolios.
(c) SPECIAL SUBCUSTODIANS AND ADDITIONAL CUSTODIANS. Notwithstanding the
provisions of Section 5.01 to the contrary and except as otherwise provided in
any subcustodian agreement to which the Custodian, the Fund and any Special
Subcustodian or Additional Custodian are parties, the Custodian shall not be
liable to the Fund for any loss, damage or expense suffered or incurred by the
Fund or any of its Portfolios resulting from the actions or omissions of a
Special Subcustodian or Additional Subcustodian, unless such loss, damage or
expense is caused by, or results from, the negligence, misfeasance or misconduct
of the Custodian; PROVIDED HOWEVER, that in the event of any such loss, damage
or expense, the Custodian shall take all reasonable steps to enforce such rights
as it may have against any Special Subcustodian or Additional Custodian to
protect the interests of the Fund and the Portfolios.
(d) SECURITIES SYSTEMS AND ELIGIBLE SECURITIES DEPOSITORIES.
Notwithstanding the provisions of Section 5.01 to the contrary, the Custodian
shall not be liable to the Fund for any loss, damage or expense suffered or
incurred by the Fund or any of its Portfolios resulting from the use by the
Custodian of a Securities System or Eligible Securities Depository, unless such
loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; PROVIDED HOWEVER, that in the event
of any such loss, damage or expense, the Custodian shall take all reasonable
steps to enforce such rights as it may have against the Securities System or
Eligible Securities Depository to protect the interests of the Fund and the
Portfolios.
(e) REIMBURSEMENT OF EXPENSES. The Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the Custodian on
behalf of the Fund in connection with the fulfillment of its obligations under
this Section 5.02; PROVIDED HOWEVER, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian.
SECTION 5.03. INDEMNIFICATION.
(a) INDEMNIFICATION OBLIGATIONS. Subject to the limitations set forth in
this Agreement, the Fund severally and not jointly agrees to indemnify and hold
harmless the Custodian and its nominees from all loss, damage and expense
(including reasonable attorneys' fees) suffered or incurred by the Custodian or
its nominee caused by or arising from actions taken by the Custodian on behalf
of the Fund in the performance of its duties and obligations under this
Agreement; PROVIDED HOWEVER, that such indemnity shall not apply to loss, damage
and expense occasioned by or resulting from the negligence, misfeasance or
misconduct of the Custodian or its nominee. In addition, the Fund agrees
severally and not jointly to indemnify any Person against any liability incurred
by reason of taxes assessed to such Person, or other loss, damage or expenses
incurred by such Person, resulting from the fact that securities and other
property of the Fund's Portfolios are registered in the name of such Person;
PROVIDED HOWEVER, that in no event shall such indemnification be applicable to
income, franchise or similar taxes which may be imposed or assessed against any
Person.
(b) NOTICE OF LITIGATION, RIGHT TO PROSECUTE, ETC. The Fund shall not be
liable for indemnification under this Section 5.03 unless a Person shall have
promptly notified the Fund in writing of the commencement of any litigation or
proceeding brought against such Person in respect of which indemnity may be
sought under this Section 5.03 provided, that the Fund shall not be liable for
such indemnification to the extent that the Fund is disadvantaged by any such
delay in notification. With respect to claims in such litigation or proceedings
for which indemnity by the Fund may be sought and subject to applicable law and
the ruling of any court of competent jurisdiction, the Fund shall be entitled to
19 of 35
participate in any such litigation or proceeding and, after written notice from
the Fund to any Person, the Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which the Fund may be subject to an
indemnification obligation; PROVIDED HOWEVER, a Person shall be entitled to
participate in (but not control) at its own cost and expense, the defense of any
such litigation or proceeding if the Fund has not acknowledged in writing its
obligation to indemnify the Person with respect to such litigation or
proceeding. If the Fund is not permitted to participate or control such
litigation or proceeding under applicable law or by a ruling of a court of
competent jurisdiction, such Person shall reasonably prosecute such litigation
or proceeding. A Person shall not consent to the entry of any judgment or enter
into any settlement in any such litigation or proceeding without providing the
Fund with adequate notice of any such settlement or judgment, and without the
Fund's prior written consent. All Persons shall submit written evidence to the
Fund with respect to any cost or expense for which they are seeking
indemnification in such form and detail as the Fund may reasonably request.
SECTION 5.04. INVESTMENT LIMITATIONS. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase, sale or
exchange of securities made by or for a Portfolio, the Custodian shall not be
liable to the Fund and the Fund agrees to indemnify the Custodian and its
nominees, for any loss, damage or expense suffered or incurred by the Custodian
and its nominees arising out of any violation of any investment or other
limitation to which the Fund is subject.
SECTION 5.05. FUND'S RIGHT TO PROCEED. Notwithstanding anything to the
contrary contained herein, the Fund shall have, at its election upon reasonable
notice to the Custodian, the right to enforce, to the extent permitted by any
applicable agreement and applicable law, the Custodian's rights against any
Subcustodian, Securities System, Eligible Securities Depository or other Person
for loss, damage or expense caused the Fund by such Subcustodian, Securities
System, Eligible Securities Depository or other Person, and shall be entitled to
enforce the rights of the Custodian with respect to any claim against such
Subcustodian, Securities System, Eligible Securities Depository or other Person,
which the Custodian may have as a consequence of any such loss, damage or
expense, if and to the extent that the Fund has not been made whole for any such
loss or damage. If the Custodian makes the Fund whole for any such loss or
damage, the Custodian shall retain the ability to enforce its rights directly
against such Subcustodian, Securities System, Eligible Securities Depository or
other Person. Upon the Fund's election to enforce any rights of the Custodian
under this Section 5.05, the Fund shall reasonably prosecute all actions and
proceedings directly relating to the rights of the Custodian in respect of the
loss, damage or expense incurred by the Fund; PROVIDED THAT, so long as the Fund
has acknowledged in writing its obligation to indemnify the Custodian under
Section 5.03 hereof with respect to such claim, the Fund shall retain the right
to settle, compromise and/or terminate any action or proceeding in respect of
the loss, damage or expense incurred by the Fund without the Custodian's consent
and provided further, that if the Fund has not made an acknowledgment of its
obligation to indemnify, the Fund shall not settle, compromise or terminate any
such action or proceeding without the written consent of the Custodian, which
consent shall not be unreasonably withheld or delayed. The Custodian agrees to
cooperate with the Fund and take all actions reasonably requested by the Fund in
connection with the Fund's enforcement of any rights of the Custodian. The Fund
agrees to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of the Fund in connection with the
fulfillment of its obligations under this Section 5.05; provided, however, that
such reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, the Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in writing,
from time to time, by the Custodian and the Fund.
ARTICLE VII
TERMINATION
20 of 35
SECTION 7.01. TERMINATION OF AGREEMENT. With respect to the Fund, this
Agreement shall continue in full force and effect until the first to occur of:
(a) termination by the Custodian by an instrument in writing delivered or mailed
to the Fund, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; (b) termination by the Fund by an instrument in
writing delivered or mailed to the Custodian, such termination to take effect
not sooner than thirty (30) days after the date of such delivery; or (c)
termination by the Fund by written notice delivered to the Custodian, based upon
the Fund's determination that there is a reasonable basis to conclude that the
Custodian is insolvent or that the financial condition of the Custodian is
deteriorating in any material respect, in which case termination shall take
effect upon the Custodian's receipt of such notice or at such later time as the
Fund shall designate. In the event of termination pursuant to this Section 7.01
by the Fund, the Fund shall make payment of all accrued fees and unreimbursed
expenses with respect to the Fund within a reasonable time following termination
and delivery of a statement to the Fund setting forth such fees and expenses.
The Fund shall identify in any notice of termination a successor custodian or
custodians to which the cash, securities and other assets of its Portfolios
shall, upon termination of this Agreement with respect to the Fund, be
delivered. In the event that no written notice designating a successor custodian
shall have been delivered to the Custodian on or before the date when
termination of this Agreement shall become effective, the Custodian may deliver
to a bank or trust company doing business in Boston, Massachusetts, 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 and
other assets of the Fund's Portfolios held by the Custodian and all instruments
held by the Custodian relative thereto and all other property of the Fund's
Portfolios held by the Custodian under this Agreement. Thereafter, such bank or
trust company shall be the successor of the Custodian with respect to the Fund
under this Agreement. In the event that securities and other assets of the
Fund's Portfolios remain in the possession of the Custodian after the date of
termination hereof with respect to the Fund owing to a failure of the Fund to
appoint a successor custodian, the Custodian shall be entitled to compensation
for its services in accordance with the fee schedule most recently in effect,
for such period as the Custodian retains possession of such securities and other
assets, and the provisions of this Agreement relating to the duties and
obligations of the Custodian and the Fund shall remain in full force and effect.
In the event of the appointment of a successor custodian, it is agreed that the
cash, securities and other property owned by the Fund and held by the Custodian,
any Subcustodian or nominee shall be delivered to the successor custodian; and
the Custodian agrees to cooperate with the Fund in the execution of documents
and performance of other actions necessary or desirable in order to substitute
the successor custodian for the Custodian under this Agreement.
SECTION 7.02. TERMINATION AS TO ONE OR MORE PORTFOLIOS. This Agreement
may be terminated as to one or more of the Fund's Portfolios (but less than all
of its Portfolios) by delivery of the Amending Letter (as hereinafter defined)
deleting such Portfolios pursuant to Section 9.06(b) hereof, in which case
termination as to such deleted Portfolios shall take effect thirty (30) days
after the date of such delivery. The execution and delivery of the Amending
Letter which deletes one or more Portfolios shall constitute a termination of
this Agreement only with respect to such deleted Portfolio(s), shall be governed
by the preceding provisions of Section 7.01 as to the identification of a
successor custodian and the delivery of cash, securities and other assets of the
Portfolio(s) so deleted, and shall not affect the obligations of the Custodian
and any Fund hereunder with respect to the other Portfolios set forth in this
Agreement, as amended from time to time.
21 of 35
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
TERM SECTION
---- -------
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Amending Letter 7.02(a)
Authorized Person(s) 3.02
Bank Accounts 2.21
Banking Institution 2.12(a)
Broker's Futures Margin Account 2.10
Business Day Appendix "B"
Bank Accounts 2.21
Central Fund 2.02(c)
Central Fund Control Procedures 2.02(c)
Central Fund Purchase Instructions 2.03(v)
Central Fund Sell Instructions 2.05(iv)
Central Fund Transfer Agent 2.02(c)
Distribution Account 2.16
Domestic Subcustodian 4.01
Eligible Securities Depository 2.22(b)
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interest Bearing Deposits 2.12
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
Purchase Instructions 2.03
SEC 2.22(a)
Securities System 2.22(a)
Segregated Futures Margin Account 2.10
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Underlying Fund 2.02(d)
Underlying Fund Transfer Agent 2.02(d)
1940 Act Preamble
22 of 35
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. EXECUTION OF DOCUMENTS, ETC.
(a) ACTIONS BY THE FUND. Upon request, the Fund shall execute
and deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection with
the performance by the Custodian or any Subcustodian of their respective
obligations to the Fund under this Agreement or any applicable subcustodian
agreement with respect to the Fund, provided that the exercise by the Custodian
or any Subcustodian of any such rights shall in all events be in compliance with
the terms of this Agreement.
(b) ACTIONS BY CUSTODIAN. Upon receipt of Proper Instructions,
the Custodian shall execute and deliver to the Fund or to such other parties as
the Fund may designate in such Proper Instructions, all such documents,
instruments or agreements as may be reasonable and necessary or desirable in
order to effectuate any of the transactions contemplated hereby.
SECTION 9.02. REPRESENTATIVE CAPACITY; NONRECOURSE OBLIGATIONS. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF THE FUND IS ON
FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S FORMATION, AND NOTICE IS
HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE DIRECTORS OF
THE FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING
UPON ANY OF THE DIRECTORS, OFFICERS, SHAREHOLDERS OR PARTNERS OF THE FUND
INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF THE FUND'S
RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT NO SHAREHOLDER, DIRECTORS,
OFFICER OR PARTNER OF THE FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR
ANY OBLIGATIONS OF THE FUND ARISING OUT OF THIS AGREEMENT.
SECTION 9.03. SEVERAL OBLIGATIONS OF THE FUND AND THE PORTFOLIOS. WITH
RESPECT TO ANY OBLIGATIONS OF THE FUND ON BEHALF OF ANY OF ITS PORTFOLIOS
ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS
ARISING UNDER SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF, THE CUSTODIAN
SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSETS
AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH THE
FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY SEPARATE WRITTEN INSTRUMENT
WITH RESPECT TO EACH OF ITS PORTFOLIOS.
SECTION 9.04. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund hereby
severally and not jointly represents and warrants that each of the following
shall be true, correct and complete with respect to the Fund at all times during
the term of this Agreement: (i) the Fund is duly organized under the laws of its
jurisdiction of organization and is registered as an open-end management
investment company under the 1940 Act; and (ii) the execution, delivery and
performance by the Fund of this Agreement are (w) within its power, (x) have
been duly authorized by all necessary action, and (y) will not (A) contribute to
or result in a breach of or default under or conflict with any existing law,
order, regulation or ruling of any governmental or regulatory agency or
authority, or (B) violate any provision of the Fund's corporate charter or other
organizational document, or bylaws, or any amendment thereof or any provision of
its most recent Prospectus or Statement of Additional Information.
(b) REPRESENTATIONS AND WARRANTIES OF THE CUSTODIAN. The
Custodian hereby represents and warrants to the Fund that the following shall be
true, correct and complete at all times during the term of this Agreement: (i)
the Custodian is duly organized under the laws of its jurisdiction of
23 of 35
organization and qualifies to act as a custodian to open-end management
investment companies under the provisions of the 1940 Act; (ii) the execution,
delivery and performance by the Custodian of this Agreement are (w) within its
power, (x) have been duly authorized by all necessary action, and (y) will not
(A) contribute to or result in a breach of or default under or conflict with any
existing law, order, regulation or ruling of any governmental or regulatory
agency or authority, or (B) violate any provision of the Custodian's corporate
charter, or other organizational document, or bylaws, or any amendment thereof,
(iii) the Custodian is a "Qualified Foreign Bank" (as defined in Rule 17f-5), a
"US Bank" (as defined in Rule 17f-5) or an entity which by order of the SEC or
by no-action letter of the staff of the SEC is exempt from meeting the
requirements of an "Eligible Foreign Custodian" (as set forth in Rule 17f-5),
(iv) the Custodian qualifies as a "Primary Custodian" (as defined in Rule 17f-7)
and accepts the responsibilities thereof, and (v) the Custodian has entered into
policies, bonds or similar arrangements which provide the types and minimum
amounts of insurance and related coverage set forth in Section 2.29 hereof and
such policies, bonds or similar arrangements are in full force and effect.
SECTION 9.05. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the Custodian, on
the other, with respect to the subject matter hereof and accordingly, supersedes
as of the effective date of this Agreement any custodian agreement heretofore in
effect between the Fund and the Custodian.
SECTION 9.06. WAIVERS AND AMENDMENTS. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by the
party against which enforcement of such waiver, amendment or termination is
sought; provided, however: (a) the Portfolios of the Fund for which the
Custodian serves as custodian may be amended from time to time to add one or
more Portfolios for the Fund, by the Fund's execution and delivery to the
Custodian of an Amending Letter, and the execution of such Amending Letter by
the Custodian, in which case such amendment shall take effect immediately upon
execution by the Custodian; (b) An Amending Letter may be sent from time to time
to delete one or more Portfolios (but less than all of the Portfolios) of the
Fund, by the Fund's execution and delivery to the Custodian of an Amending
Letter, in which case such amendment shall take effect thirty (30) days after
such delivery, unless otherwise agreed by the Custodian and the Fund in writing;
(c) APPENDIX "A" listing Foreign Subcustodians, Eligible Securities
Depositories, Special Subcustodians and Additional Custodians approved by the
Fund may be amended from time to time to add or delete one or more Foreign
Subcustodians, Eligible Securities Depositories, Special Subcustodians or
Additional Custodians for the Fund by either party's execution and delivery to
the other party hereto of an amended APPENDIX "A", in which case such amendment
shall take effect immediately upon execution by the other party hereto; (d)
APPENDIX "B" setting forth the procedures relating to the Custodian's security
interest with respect to the Fund may be amended only by an instrument in
writing executed by the Fund and the Custodian; and (e) APPENDIX "C" listing the
Central Funds for which the Custodian serves as custodian may be amended from
time to time to add or delete one or more of the Central Funds, by the Central
Funds' or Portfolio's execution and delivery to the Custodian of an amended
APPENDIX "C", and the execution of such amended Appendix by the Custodian, in
which case such amendment shall take effect immediately upon execution by the
Custodian.
SECTION 9.07. INTERPRETATION. In connection with the operation of this
Agreement, the Custodian and the Fund may agree in writing from time to time on
such provisions interpretative of or in addition to the provisions of this
Agreement with respect to the Fund as may in their joint opinion be consistent
with the general tenor of this Agreement. No interpretative or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement or affect the Fund.
SECTION 9.08. CAPTIONS. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the parties
hereto.
SECTION 9.09. GOVERNING LAW. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant to an
agreement with a Foreign Subcustodian that is governed by the laws of the State
of New York, the provisions of this Agreement shall be construed in accordance
24 of 35
with and governed by the laws of the State of New York, provided that in all
other instances this Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts, in each case without
giving effect to principles of conflicts of law.
SECTION 9.10. NOTICES. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this Agreement
shall be delivered by hand or by facsimile transmission (provided that in the
case of delivery by facsimile transmission, notice shall also be mailed postage
prepaid to the parties at the following addresses:
(a) If to the Fund:
c/o Fidelity Management & Research Company
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn:
Telephone: (000) 000-0000
Telefax: (000) 000-0000
(b) If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Manager, Investment Services
Telephone: (000) 000-0000
Telefax: (000) 000-0000
or to such other address as the Fund or the Custodian may have designated in
writing to the other.
SECTION 9.11. ASSIGNMENT. This Agreement shall be binding on and shall
inure to the benefit of the Fund severally and the Custodian and their
respective successors and assigns, provided that, subject to the provisions of
Section 7.01 hereof, neither the Custodian nor the Fund may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
SECTION 9.12. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. With respect to the
Fund, this Agreement shall become effective when one or more counterparts have
been signed and delivered by the Fund and the Custodian.
SECTION 9.13. CONSENT TO RECORDING. The Fund and the Custodian hereby
agree that each may electronically record all telephonic conversations between
them and that any such recordings may be submitted in evidence in any
proceedings relating to this Agreement.
SECTION 9.14. CONFIDENTIALITY; SURVIVAL OF OBLIGATIONS. The parties
hereto agree that each shall treat confidentially the terms and conditions of
this Agreement and all information provided by each party to the other regarding
its business and operations. All confidential information provided by a party
hereto shall be used by any other party hereto solely for the purpose of
rendering services pursuant to this Agreement and, except as may be required in
carrying out this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not be applicable
to any information that is publicly available when provided or thereafter
becomes publicly available other than through a breach of this Agreement, or
that is required to be disclosed by any bank examiner of the Custodian or any
Subcustodian, any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation. The provisions of this
Section 9.14 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of this
Agreement shall survive any termination of this Agreement.
25 of 35
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
The Japan Fund, Inc.
, on Behalf Xxxxx Brothers Xxxxxxxx & Company
of each of its Respective Portfolios
By: /S/ XXXX X. XXXXX By: /S/ XXXXX X. XXXX
----------------- -----------------
Name: XXXX X. XXXXX Name: XXXXX X. XXXX
------------- -----------------
Title: V.P. & SECRETARY Title: Managing Director
26 of 35
APPENDIX A
TO
CUSTODIAN AGREEMENT
BETWEEN
[CUSTODIAN] AND THE JAPAN FUND, INC.
DATED AS OF [DATE, 200_]
The following is a list of Additional Custodians, Special Subcustodians, Foreign
Subcustodians and Eligible Securities Depositories under the Custodian Agreement
dated as of [Date, 200_] (the "Custodian Agreement"):
A. ADDITIONAL CUSTODIANS
------------------------
ADDITIONAL CUSTODIANS
---------------------
PURPOSE
-------
B. SPECIAL SUBCUSTODIANS:
-------------------------
SPECIAL SUBCUSTODIANS
---------------------
PURPOSE
-------
C. FOREIGN SUBCUSTODIANS
------------------------
FOREIGN SUBCUSTODIANS COUNTRY
----------------------------------------------------------------------------
D. ELIGIBLE SECURITIES DEPOSITORIES
-----------------------------------
ELIGIBLE SECURITIES DEPOSITORIES COUNTRY
----------------------------------------------------------------------------
The Japan Fund, Inc., on Behalf of
Each of Their Respective Portfolios
A - 1
By: /s/ Xxxx X. Xxxxx
-----------------------
Name: Xxxx X. Xxxxx
Title: V. P. & Secretary
A - 2
"APPENDIX B" TO THE
CUSTODIAN AGREEMENT
BETWEEN
THE JAPAN FUND, INC.
AND
XXXXX BROTHERS XXXXXXXX & COMPANY
DATED AS OF JANUARY 22, 2003
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
----------------------------------------------------
As security for any Overdrafts (as defined in the Custodian Agreement)
of any Portfolio, the Fund, on behalf of such Portfolio, shall pledge, assign
and grant to the Custodian a security interest in Collateral (as hereinafter
defined), under the terms, circumstances and conditions set forth in this
Appendix "B".
SECTION 1. DEFINED TERMS. As used in this Appendix "B" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday
or a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, securities
held by the Custodian on behalf of the Portfolio having a fair market value (as
determined in accordance with the procedures set forth in the prospectus for the
Portfolio) equal to the aggregate of all Overdraft Obligations of such
Portfolio: (i) identified in any Pledge Certificate executed on behalf of such
Portfolio; or (ii) designated by the Custodian for such Portfolio pursuant to
Section 3 of this Appendix B. Such securities shall consist of marketable
securities held by the Custodian on behalf of such Portfolio or, if no such
marketable securities are held by the Custodian on behalf of such Portfolio,
such other securities designated by the Fund in the applicable Pledge
Certificate or by the Custodian pursuant to Section 3 of this Appendix B.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio,
the amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "B" as Schedule 1 executed by a duly authorized
officer of the Fund and delivered by the Fund to the Custodian by facsimile
transmission or in such other manner as the Fund and the Custodian may agree in
writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "B" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the Fund by facsimile
transmission or in such other manner as the Fund and the Custodian may agree in
writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by facsimile
transmission or in such other manner as the Fund and the Custodian shall agree
in writing.
SECTION 2. PLEDGE OF COLLATERAL. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business on the
first Business Day following the Business Day on which the Fund receives Written
Notice requesting security for such Overdraft Obligation and stating the amount
of such Overdraft Obligation, the Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a first priority security interest, by
delivering to the Custodian, a Pledge Certificate executed by the Fund on behalf
of such Portfolio describing the applicable Collateral. Such Written Notice may,
B - 1
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
SECTION 3. FAILURE TO PLEDGE COLLATERAL. In the event that the Fund
shall fail: (a) to pay, on behalf of the applicable Portfolio, the Overdraft
Obligation described in such Written Notice; (b) to deliver to the Custodian a
Pledge Certificate pursuant to Section 2; or (c) to identify substitute
securities pursuant to Section 6 upon the sale or maturity of any securities
identified as Collateral, the Custodian may, by Written Notice to the Fund
specify Collateral which shall secure the applicable Overdraft Obligation. The
Fund, on behalf of any applicable Portfolio, hereby pledges, assigns and grants
to the Custodian a first priority security interest in any and all Collateral
specified in such Written Notice; PROVIDED THAT such pledge, assignment and
grant of security shall be deemed to be effective only upon receipt by the Fund
of such Written Notice.
SECTION 4. DELIVERY OF ADDITIONAL COLLATERAL. If at any time the
Custodian shall notify the Fund by Written Notice that the fair market value of
the Collateral securing any Overdraft Obligation of one of the Fund's Portfolios
is less than the amount of such Overdraft Obligation, the Fund, on behalf of the
applicable Portfolio, shall deliver to the Custodian, within one (1) Business
Day following the Fund's receipt of such Written Notice, an additional Pledge
Certificate describing additional Collateral. If the Fund shall fail to deliver
such additional Pledge Certificate, the Custodian may specify Collateral which
shall secure the unsecured amount of the applicable Overdraft Obligation in
accordance with Section 3 of this Appendix B.
SECTION 5. RELEASE OF COLLATERAL. Upon payment by the Fund, on behalf of
one of its Portfolios, of any Overdraft Obligation secured by the pledge of
Collateral, the Custodian shall promptly deliver to the Fund a Release
Certificate pursuant to which the Custodian shall release Collateral from the
lien under the applicable Pledge Certificate or Written Notice pursuant to
Section 3 having a fair market value equal to the amount paid by the Fund on
account of such Overdraft Obligation. In addition, if at any time the Fund shall
notify the Custodian by Written Notice that the Fund desires that specified
Collateral be released and: (a) that the fair market value of the Collateral
securing any Overdraft Obligation shall exceed the amount of such Overdraft
Obligation; or (b) that the Fund has delivered a Pledge Certificate substituting
Collateral for such Overdraft Obligation, the Custodian shall deliver to the
Fund, within one (1) Business Day following the Custodian's receipt of such
Written Notice, a Release Certificate relating to the Collateral specified in
such Written Notice.
SECTION 6. SUBSTITUTION OF COLLATERAL. The Fund may substitute
securities for any securities identified as Collateral by delivery to the
Custodian of a Pledge Certificate executed by the Fund on behalf of the
applicable Portfolio, indicating the securities pledged as Collateral.
SECTION 7. SECURITY FOR INDIVIDUAL PORTFOLIOS' OVERDRAFT OBLIGATIONS.
The pledge of Collateral by the Fund on behalf of any of its individual
Portfolios shall secure only the Overdraft Obligations of such Portfolio. In no
event shall the pledge of Collateral by one of the Fund's Portfolios be deemed
or considered to be security for the Overdraft Obligations of any other
Portfolio of the Fund or of any other Fund.
SECTION 8. CUSTODIAN'S REMEDIES. Upon (a) the Fund's failure to pay any
Overdraft Obligation of an applicable Portfolio within thirty (30) days after
receipt by the Fund of a Written Notice demanding security therefor, and (b) one
(1) Business Day's prior Written Notice to the Fund, the Custodian may elect to
enforce its security interest in the Collateral securing such Overdraft
Obligation, by taking title to (at the then prevailing fair market value), or
selling in a commercially reasonable manner, so much of the Collateral as shall
be required to pay such Overdraft Obligation in full. Notwithstanding the
provisions of any applicable law, including, without limitation, the Uniform
Commercial Code, the remedy set forth in the preceding sentence shall be the
only right or remedy to which the Custodian is entitled with respect to the
pledge and security interest granted pursuant to any Pledge Certificate or
Section 3. Without limiting the foregoing, the Custodian hereby waives and
relinquishes all contractual and common law rights of set off to which it may
now or hereafter be or become entitled with respect to any obligations of the
Fund to the Custodian arising under this Appendix "B" to the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
B - 2
The Japan Fund, Inc., on
Behalf of Each of Their Respective Portfolios Xxxxx Brothers Xxxxxxxx & Company
By: /S/XXXX X. XXXXX By: /s/Xxxxx X. Xxxx
----------------
Name: XXXX X. XXXXX Name: Xxxxx X. Xxxx
-------------
Title: V.P. & SECRETARY Title: Managing Director
----------------
B - 3
SCHEDULE 1
TO
APPENDIX "B"
PLEDGE CERTIFICATE
------------------
This Pledge Certificate is delivered pursuant to the Custodian
Agreement, dated as of January 23, 2003 (the "Agreement"), between The Japan
Fund, Inc. (the "Fund") and [CUSTODIAN] (the "Custodian"). Capitalized terms
used herein without definition shall have the respective meanings ascribed to
them in the Agreement. Pursuant to Section 2 of Appendix "B" attached to the
Agreement, the Fund, on behalf of The Japan Fund (the "Portfolio"), hereby
pledges, assigns and grants to the Custodian a first priority security interest
in the securities listed on Exhibit "A" attached to this Pledge Certificate
(collectively, the "Pledged Securities"). Upon delivery of this Pledge
Certificate, the Pledged Securities shall constitute Collateral, and shall
secure all Overdraft Obligations of the Portfolio described in that certain
Written Notice dated, delivered by the Custodian to the Fund. The pledge,
assignment and grant of security in the Pledged Securities hereunder shall be
subject in all respect to the terms and conditions of the Agreement, including,
without limitation, Sections 7 and 8 of Appendix "B" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of January 23, 2003.
The Japan Fund, Inc., on Behalf of [Portfolio]
By: /s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: V.P. & Secretary
B - 4
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
ISSUER SECURITY NUMBERS SHARES
------ -------- -------- ---------
B - 5
SCHEDULE 2
TO
APPENDIX "B"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian
Agreement, dated as of [DATE, 2001] (the "Agreement"), between The Japan Fund,
Inc. (the "Fund") and [CUSTODIAN] (the "Custodian"). Capitalized terms used
herein without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to Section 5 of Appendix "B" attached to the Agreement,
the Custodian hereby releases the securities listed on Exhibit "A" attached to
this Release Certificate from the lien under the [Pledge Certificate dated
___________, or the Written Notice delivered pursuant to Section 3 of Appendix
"B" dated _________ ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this ____ day of ___________.
Xxxxx Brothers Xxxxxxxx & Company
By: _____________________
Name: _____________________
Title: _____________________
B - 6
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
ISSUER SECURITY NUMBERS SHARES
------ -------- ------- ---------
B - 7
Appendix C
Dated as of: January 23, 2003
A. CENTRAL FUNDS
-------------
TRUST FUND
----- ----
Fidelity Xxxxxxxx Street Trust Fidelity Money Market Central Fund
Fidelity Revere Street Trust Fidelity Cash Central Fund
Fidelity Revere Street Trust Fidelity Municipal Cash Central Fund
Fidelity Revere Street Trust Fidelity Securities Lending Cash Central Fund
- C1 -
