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EXHIBIT (8)(b)
CUSTODY AGREEMENT
Agreement made as of this 1st day of May 1995, between Conestoga
Family of Funds, a trust organized and existing under the laws of the
Commonwealth of Massachusetts having its principal office and place of business
at 000 X. Xxxxxxxxxx Xxxx, Xxxxx, XX 00000, hereinafter called the "Company"),
and THE BANK OF NEW YORK, a New York corporation authorized to do a banking
business, having the principal office and place of business at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the "Custodian").
W I T N E S S E T E H:
that for and in consideration of the mutual promises hereinafter set forth, the
Company and the Custodian agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal agency
securities, its successor or successors and its nominee or nominees.
2. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options, Futures Contracts,
and Futures Contract Options entitling the holder, upon timely exercise and
payment of the exercise price, as specified therein, to purchase from the
writer thereof the specified underlying Securities.
3. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this Agreement to be
given to the Custodian which is actually received by the Custodian and signed
on behalf of the Company by any two officers, and the term Certificate shall
also include instructions by the Company to the Custodian communicated by a
Terminal Link.
4. "Clearing Member" shall mean a registered
broker-dealer which is a clearing member under the rules of O.C.C. and a member
of a national securities exchange qualified to act as a custodian for an
investment company, or any broker-dealer
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reasonably believed by the Custodian to be such a clearing member.
5. "Collateral Account" shall mean a segregated account
so denominated which is specifically allocated to the Fund and pledged to the
Custodian as security for, and in consideration of, the Custodian's issuance of
(a) any Put Option guarantee letter or similar document described in paragraph
8 of Article V herein, or (b) any receipt described in Article V or VIII
herein.
6. "Covered Call Option" shall mean an exchange traded
option entitling the holder, upon timely exercise and payment of the exercise
price, as specified therein, to purchase from the writer thereof the specified
underlying Securities (excluding Futures Contracts) which are owned by the
writer thereof and subject to appropriate restrictions.
7. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission, its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified in a certified
copy of a resolution of the Company's Board of Trustees specifically approving
deposits therein by the Custodian.
8. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities including, without
limitation, U.S. Treasury Bills, U.S. Treasury Notes, U.S. Treasury Bonds,
domestic bank certificates of deposit, and Eurodollar certificates of deposit,
during a specified month at an agreed upon price.
9. "Fund" shall mean the Conestoga International Equity
Fund.
10. "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
11. "Futures Contract Option" shall mean an option with
respect to a Futures Contract.
12. "Margin Account" shall mean a segregated account in
the name of a broker, dealer, futures commission merchant, or a Clearing
Member, or in the name of the Company for the benefit of a broker, dealer,
futures commission merchant, or Clearing Member, or otherwise, in accordance
with an agreement between the Company, the Custodian and a broker, dealer,
futures commission merchant or a Clearing Member (a "Margin Account
Agreement"),
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separate and distinct from the custody account, in which certain Securities
and/or money of the Company shall be deposited and withdrawn from time to time
in connection with such transactions as the Company may from time to time
determine. Securities held in the Book-Entry System or the Depository shall be
deemed to have been deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry in its books and records.
13. "Money Market Security" shall be deemed to include,
without limitation, certain Reverse Repurchase Agreements, debt obligations
issued or guaranteed as to interest and principal by the government of the
United States or agencies or instrumentalities thereof, any tax, bond or
revenue anticipation note issued by any state or municipal government or public
authority, commercial paper, certificates of deposit and bankers, acceptances,
repurchase agreements with respect to the same and bank time deposits, where
the purchase and sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale.
14. "O.C.C." shall mean the Options Clearing Corporation,
a clearing agency registered under Section 17A of the Securities Exchange Act
of 1934, its successor or successors, and its nominee or nominees.
15. "Officers" shall be deemed to include the President,
any Vice President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer, and any other person or persons, whether or
not any such other person is an officer of the Company, duly authorized by the
Board of Trustees of the Company to execute any Certificate, instruction,
notice or other instrument on behalf of the Company and listed in the
Certificate annexed hereto as Appendix A or such other Certificate as may be
received by the Custodian from time to time.
16. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.
17. "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from an Officer or from a person reasonably
believed by the Custodian to be an Officer.
18. "Put Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options, Futures Contracts,
and Futures Contract Options entitling the holder, upon timely exercise and
tender of the specified underlying Securities, to sell such Securities to the
writer thereof for the exercise price.
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19. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Company sells Securities and agrees to
repurchase such Securities at a described or specified date and price.
20. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options, Stock Index
Options, Stock Index Futures Contracts, Stock Index Futures Contract Options,
Financial Futures Contracts, Financial Futures Contract Options, Reverse
Repurchase Agreements, common stocks and other securities having
characteristics similar to common stocks, preferred stocks, debt obligations
issued by state or municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds, industrial bonds
and industrial development bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the same, or
evidencing or representing any other rights or interest therein, or any
property or assets.
21. "Senior Security Account" shall mean an account
maintained and specifically allocated to the Fund under the terms of this
Agreement as a segregated account, by recordation or otherwise, within the
custody account in which certain Securities and/or other assets of the Company
specifically allocated to the Fund shall be deposited and withdrawn from time
to time in accordance with Certificates received by the Custodian in connection
with such transactions as the Company may from time to time determine.
22. "Shares" shall mean the shares of beneficial
interest of the Fund.
23. "Stock Index Futures Contract" shall mean a bilateral
agreement pursuant to which the parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the difference between
the value of a particular stock index at the close of the last business day of
the contract and the price at which the futures contract is originally struck.
24. "Stock Index Option" shall mean an exchange traded
option entitling the holder, upon timely exercise, to receive an amount of cash
determined by reference to the difference between the exercise price and the
value of the index on the date of exercise.
25. "Terminal Link" shall mean an electronic data
transmission link between the Company and the Custodian requiring in connection
with each use of the Terminal Link by or on behalf of the Company use of an
authorization code provided by the
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Custodian and at least two access codes established by the Company.
ARTICLE II.
APPOINTMENT OF CUSTODIAN
1. The Company hereby constitutes and appoints the
Custodian as custodian of the Securities and moneys deposited by the Fund with
the Custodian during the period of this Agreement.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III.
CUSTODY OF CASE AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, the Fund will deliver or cause to be delivered to
the Custodian Securities and moneys owned by it, at any time during the period
of this Agreement. The Custodian shall segregate, keep and maintain the assets
of the Fund separate and apart. The Custodian will not be responsible for any
Securities and moneys not actually received by it. The Custodian will be
entitled to reverse any credits made on the Fund's behalf where such credits
have been previously made and moneys are not finally collected. The Company
shall deliver to the Custodian a certified resolution of the Board of Trustees
of the Company, substantially in the form of Exhibit A hereto, approving,
authorizing and instructing the Custodian on a continuous and on-going basis to
deposit in the Book-Entry System all Securities eligible for deposit therein,
and to utilize the Book-Entry System to the extent possible in connection with
its performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities and
deliveries and returns of Securities collateral. Priority to a deposit of
Securities in the Depository, the Company shall deliver to the Custodian a
certified resolution of the Board of Trustees of the Company, substantially in
the form of Exhibit B hereto, approving, authorizing and instructing the
Custodian on a continuous and ongoing basis until instructed to the contrary by
a Certificate actually received by the Custodian to deposit in the Depository
all Securities eligible for deposit therein, and to utilize the Depository to
the extent possible with respect to such Securities in connection with its
performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys
deposited in either
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the Book-Entry System or the Depository will be represented in accounts which
include only assets held by the Custodian for customers, including, but not
limited to, accounts in which the Custodian acts in a fiduciary or
representative capacity and will be specifically allocated on the Custodian's
books to the separate account for the applicable Series. Prior to the
Custodian's accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for the Fund as provided
in this Agreement, the Custodian shall have received a certified resolution of
the Company's Board of Trustees, substantially in the form of Exhibit C hereto,
approving, authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate actually
received by the Custodian, to accept, utilize and act in accordance with such
confirmations as provided in this Agreement.
2. The Custodian shall establish and maintain a separate
account, in the name of the Fund, and shall credit to the separate account all
moneys received by it for the account of the Fund. Money credited to a
separate account shall be disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the
name and address of the person to whom the payment is to be made, the Series
account from which payment is to be made and the purpose for which payment is
to be made; or
(c) In payment of the fees and in reimbursement
of the expenses and liabilities of the Custodian attributable to such Series.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Company with confirmations and a summary, of all
transfers to or from the account of the Fund, either hereunder or with any
co-custodian or sub-custodian appointed in accordance with this Agreement
during said day. Where Securities are transferred to the account of the Fund,
the Custodian shall also by book-entry or otherwise identify as belonging to
such Series a quantity of Securities in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the Depository.
At least monthly and from time to time, the Custodian shall furnish the Company
with a detailed statement of the Securities and moneys held by the Custodian
for the Fund.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held by the Custodian hereunder,
which are issued or issuable only in bearer
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form, except such Securities as are held in the Book-Entry System, shall be
held by the Custodian in that form; all other Securities held hereunder may be
registered in the name of the Company, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to time
determine, or in the name of the Book-Entry System or the Depository or their
successor or successors, or their nominee or nominees. The Company agrees to
furnish to the Custodian appropriate instruments to enable the Custodian to
hold or deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or the Depository
any Securities which it may hold hereunder and which may from time to time be
registered in the name of the Company. The Custodian shall hold all such
Securities specifically allocated to the Fund which are not held in the
Book-Entry System or in the Depository in a separate account in the name of
such Fund physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate, the Custodian by
itself, or through the use of the Book-Entry System or the Depository with
respect to Securities held hereunder and therein deposited, shall with respect
to all Securities held for the Company hereunder in accordance with preceding
paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount
payable upon such Securities which are called, but only if either (i) the
Custodian receives a written notice of such call, or (ii) notice of such call
appears in one or more of the publications listed in Appendix B annexed hereto,
which may be amended at any time by the Custodian without the prior
notification or consent of the Company;
(c) Present for payment and collect the amount
payable upon all Securities which mature;
(d) Surrender Securities in temporary form for
definitive Securities;
(e) Execute, as custodian, any necessary
declarations or certificates of ownership under the Federal Income Tax Laws or
the laws or regulations of any other taxing authority now or hereafter in
effect; and
(f) Hold directly, or through the Book-Entry
System or the Depository with respect to Securities therein deposited, for the
account of the Fund, all rights and similar securities issued with respect to
any Securities held by the Custodian for such Fund hereunder.
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6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or the
Depository, shall:
(a) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Company as owner of any Securities
held by the Custodian hereunder for the Fund specified in such Certificate may
be exercised;
(b) Deliver any Securities held by the Custodian
hereunder for the Fund specified in such Certificate in exchange for other
Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege and receive and hold
hereunder specifically allocated to such Fund any cash or other Securities
received in exchange;
(c) Deliver any Securities held by the Custodian
hereunder for the Fund specified in such Certificate to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, and receive and hold hereunder specifically
allocated to such Fund such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the
assets of the Fund specified in such Certificate, and take such other steps as
shall be stated in such Certificate to be for the purpose of effectuating any
duly authorized plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) Present for payment and collect the amount
payable upon Securities not described in preceding paragraph 5(b) of this
Article which may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain possession of any
instrument or certificate representing any Futures Contract, any Option, or any
Futures Contract Option until after it shall have determined, or shall have
received a Certificate from the Company stating, that any such instruments or
certificates are available. The Company shall deliver to the Custodian such a
Certificate no later than the business day preceding the availability of any
such instrument or certificate. Prior to such availability, the Custodian
shall comply with Section 17(f) of the Investment Company Act of 1940, as
amended,
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in connection with the purchase, sale, settlement, closing out or writing of
Futures Contracts, Options, or Futures Contract Options by making payments or
deliveries specified in Certificates received by the Custodian in connection
with any such purchase, sale, writing, settlement or closing out upon its
receipt from a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by the Custodian to be in the form customarily
used by brokers, dealers, or future commission merchants with respect to such
Futures Contracts, Options, or Futures Contract Options, as the case may be,
confirming that such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the name of the
Custodian (or any nominee of the Custodian) as custodian for the Fund,
provided, however, that notwithstanding the foregoing, payments to or
deliveries from the Margin Account, and payments with respect to Securities to
which a Margin Account relates, shall be made in accordance with the terms and
conditions of the Margin Account Agreement. Whenever any such instruments or
certificates are available, the Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any Futures Contract,
Option, or Futures Contract Option for which such instruments or such
certificates are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures Contract, Option or
Futures Contract Option for which such instruments or such certificates are
available only against receipt by the Custodian of payment therefor. Any such
instrument or certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the provisions of this
Agreement.
ARTICLE IV.
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the
Fund, other than a purchase of an Option, a Futures Contract, or a Futures
Contract Option, the Company shall deliver to the Custodian (i) with respect to
each purchase of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each purchase of Money Market Securities,
a Certificate or Oral Instructions, specifying with respect to each such
purchase: (a) the name of the issuer and the title of the Securities; (b) the
number of shares or the principal amount purchased and accrued interest, if
any; (c) the date of purchase and settlement; (d) the purchase price per unit;
(e) the total amount payable upon such purchase; (f) the name of the person
from whom or the broker through whom the purchase was made, and the name of the
clearing broker, if any; and (g) the name of the
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broker to whom payment is to be made. The Custodian shall, upon receipt of
Securities purchased by or for the Fund, pay to the broker specified in the
Certificate out of the moneys held for the account of such Fund the total
amount payable upon such purchase, provided that the same conforms to the total
amount payable as set forth in such Certificate or Oral Instructions.
2. Promptly after each sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures Contract Option, or
any Reverse Repurchase Agreement, the Company shall deliver to the Custodian
(i) with respect to each sale of Securities which are not Money Market
Securities, a Certificate, and (ii) with respect to each sale of Money Market
Securities, a Certificate or Oral Instructions, specifying with respect to each
such sale: (a) the name of the issuer and the title of the Security; (b) the
number of shares or principal amount sold, and accrued interest, if any; (c)
the date of sale; (d) the sale price per unit; (e) the total amount payable to
the Fund upon such sale; (f) the name of the broker through whom or the person
to whom the sale was made, and the name of the clearing broker, if any; and (g)
the name of the broker to whom the Securities are to be delivered. The
Custodian shall deliver the Securities specifically allocated to such Fund to
the broker specified in the Certificate against payment of the total amount
payable to the Fund upon such sale, provided that the same conforms to the
total amount payable as set forth in such Certificate or Oral Instructions.
ARTICLE V.
OPTIONS
1. Promptly after the purchase of any Option by the
Fund, the Company shall deliver to the Custodian a Certificate specifying with
respect to each option purchased: (a) the type of Option (put or call); (b) the
name of the issuer and the title and number of shares subject to such Option
or, in the case of a Stock Index Option, the stock index to which such Option
relates and the number of Stock Index Options purchased; (c) the expiration
date; (d) the exercise price; (e) the dates of purchase and settlement; (f) the
total amount payable by the Fund in connection with such purchase; (g) the name
of the Clearing Member through whom such Option was purchased; and (h) the name
of the broker to whom payment is to be made. The Custodian shall pay, upon
receipt of a Clearing Member's statement confirming the purchase of such Option
held by such Clearing Member for the account of the Custodian (or any duly
appointed and registered nominee of the Custodian) as custodian for the Fund,
out of moneys held for the account of the Fund to which such Option is to be
specifically allocated, the total amount payable upon such purchase to the
Clearing Member through whom the purchase was
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made, provided that the same conforms to the total amount payable as set forth
in such Certificate.
2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Company shall deliver to the
Custodian a Certificate specifying with respect to each such sale: (a) the type
of Option (put or call); (b) the name of the issuer and the title and number of
shares subject to such Option or, in the case of a Stock Index Option, the
stock index to which such Option relates and the number of Stock Index Options
sold; (c) the date of sale; (d) the sale price; (e) the date of settlement; (f)
the total amount payable to the Fund upon such sale; and (g) the name of the
Clearing Member through whom the sale was made. The Custodian shall consent to
the delivery of the Option sold by the Clearing Member which previously
supplied the confirmation described in preceding paragraph 1 of this Article
with respect to such Option against payment to the Custodian of the total
amount payable to the Fund, provided that the same conforms to the total amount
payable as set forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof, the Company shall
deliver to the Custodian a Certificate specifying with respect to such Call
Option: (a) the name of the issuer and the title and number of shares subject
to the Call Option; (b) the expiration date; (c) the date of exercise and
settlement; (d) the exercise price per share; (e) the total amount to be paid
by the Fund upon such exercise; and (f) the name of the Clearing Member through
whom such Call Option was exercised. The Custodian shall, upon receipt of the
Securities underlying the Call Option which was exercised, pay out of the
moneys held for the account of the Fund to which such Call Option was
specifically allocated the total amount payable to the Clearing Member through
whom the Call Option was exercised, provided that the same conforms to the
total amount payable as set forth in such Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof, the Company shall
deliver to the Custodian a Certificate specifying with respect to such Put
Option: (a) the name of the issuer and the title and number of shares subject
to the Put Option; (b) the expiration date; (c) the date of exercise and
settlement; (d) the exercise price per share; (e) the total amount to be paid
to the Fund upon such exercise; and (f) the name of the Clearing Member through
whom such Put Option was exercised. The Custodian shall, upon receipt of the
amount payable upon the exercise of the Put Option, deliver or direct the
Depository to deliver the Securities specifically allocated to such Fund,
provided the same conforms to the amount payable to the Fund as set forth in
such Certificate.
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5. Promptly after the exercise by the Fund of any Stock
Index Option purchased by the Fund pursuant to paragraph 1 hereof, the Company
shall deliver to the Custodian a Certificate specifying with respect to such
Stock Index Option: (a) the type of Stock Index Option (put or call); (b) the
number of Options being exercised; (c) the stock index to which such Option
relates; (d) the expiration date; (e) the exercise price; (f) the total amount
to be received by the Fund in connection with such exercise; and (g) the
Clearing Member from whom such payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the
Company shall promptly deliver to the Custodian a Certificate specifying with
respect to such Covered Call Option: (a) the name of the issuer and the title
and number of shares for which the Covered Call Option was written and which
underlie the same; (b) the expiration date; (c) the exercise price; (d) the
premium to be received by the Fund; (e) the date such Covered Call Option was
written; and (f) the name of the Clearing Member through whom the premium is to
be received. The Custodian shall deliver or cause to be delivered, in exchange
for receipt of the premium specified in the Certificate with respect to such
Covered Call Option, such receipts as are required in accordance with the
customs prevailing among Clearing Members dealing in Covered Call Options and
shall impose, or direct the Depository to impose, upon the underlying
Securities specified in the Certificate specifically allocated to such Fund
such restrictions as may be required by such receipts. Notwithstanding the
foregoing, the Custodian has the right, upon prior written notification to the
Company, at any time to refuse to issue any receipts for Securities in the
possession of the Custodian and not deposited with the Depository underlying a
Covered Call Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is exercised, the
Company shall promptly deliver to the Custodian a Certificate instructing the
Custodian to deliver, or to direct the Depository to deliver, the Securities
subject to such Covered Call Option and specifying: (a) the name of the issuer
and the title and number of shares subject to the Covered Call Option; (b) the
Clearing Member to whom the underlying Securities are to be delivered; and (c)
the total amount payable to the Fund upon such delivery. Upon the return
and/or cancellation of any receipts delivered pursuant to paragraph 6 of this
Article, the Custodian shall deliver, or direct the Depository to deliver, the
underlying Securities as specified in the Certificate against payment of the
amount to be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Company
shall promptly deliver to the Custodian a Certificate specifying with respect
to such Put Option: (a) the name of the issuer and
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the title and number of shares for which the Put Option is written and which
underlie the same; (b) the expiration date; (c) the exercise price; (d) the
premium to be received by the Fund; (e) the date such Put Option is written;
(f) the name of the Clearing Member through whom the premium is to be received
and to whom a Put Option guarantee letter is to be delivered; (g) the amount of
cash, and/or the amount and kind of Securities, if any, specifically allocated
to such Fund to be deposited in the Senior Security Account for such Fund; and
(h) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Fund to be deposited into the Collateral Account for such
Fund. The Custodian shall, after making the deposits into the Collateral
Account specified in the Certificate, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the Certificate against
receipt of the premium specified in said Certificate. Notwithstanding the
foregoing, the Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of the
representations contained therein-
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Company shall promptly
deliver to the Custodian a Certificate specifying: (a) the name of the issuer
and title and number of shares subject to the Put Option; (b) the Clearing
Member from whom the underlying Securities are to be received; (c) the total
amount payable by the Fund upon such delivery; (d) the amount of cash and/or
the amount and kind of Securities specifically allocated to such Fund to be
withdrawn from the Collateral Account for such Fund and (e) the amount of cash
and/or the amount and kind of Securities, specifically allocated to such Fund,
if any, to be withdrawn from the Senior Security Account. Upon the return
and/or cancellation of any Put Option guarantee letter or similar document
issued by the Custodian in connection with such Put Option, the Custodian shall
pay out of the moneys held for the account of the Fund to which such Put Option
was specifically allocated the total amount payable to the Clearing Member
specified in the Certificate as set forth in such Certificate against delivery
of such Securities, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes a Stock Index Option, the
Company shall promptly deliver to the Custodian a Certificate specifying with
respect to such Stock Index Option: (a) whether such Stock Index Option is a
put or a call; (b) the number of options written; (c) the stock index to which
such Option relates; (d) the expiration date; (e) the exercise price; (f) the
Clearing Member through whom such Option was written; (g) the premium to be
received by the Fund; (h) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Fund to be deposited in the
Senior Security Account for
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such Fund; (i) the amount of cash and/or the amount and kind of Securities, if
any, specifically allocated to such Fund to be deposited in the Collateral
Account for such Fund; and (j) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Fund to be deposited in a
Margin Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium specified in the
Certificate, make the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such receipts, if any,
which the Custodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index options and
make the deposits into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and
described in the preceding paragraph of this Article is exercised, the Company
shall promptly deliver to the Custodian a Certificate specifying with respect
to such Stock Index Option: (a) such information as may be necessary to
identify the Stock Index Option being exercised; (b) the Clearing Member
through whom such Stock Index Option is being exercised; (c) the total amount
payable upon such exercise, and whether such amount is to be paid by or to the
Fund; (d) the amount of cash and/or amount and kind of Securities, if any, to
be withdrawn from the Margin Account; and (e) the amount of cash and/or amount
and kind of Securities, if any, to be withdrawn from the Senior Security
Account for such Fund; and the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account for such Fund.
Upon the return and/or cancellation of the receipt, if any, delivered pursuant
to the preceding paragraph of this Article, the Custodian shall pay out of the
moneys held for the account of the Fund to which such Stock Index Option was
specifically allocated to the Clearing Member specified in the Certificate the
total amount payable, if any, as specified therein.
12. Whenever the Fund purchases any option identical to a
previously written Option described in paragraphs, 6, 8 or 10 of this Article
in a transaction expressly designated as a "Closing Purchase Transaction" in
order to liquidate its position as a writer of an Option, the Company shall
promptly deliver to the Custodian a Certificate specifying with respect to the
Option being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the name of the issuer and the title and number of shares
subject to the Option, or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Options held; (c) the exercise
price; (d) the premium to be paid by the Fund; (e) the expiration date; (f) the
type of Option (put or call); (g) the date of such purchase; (h) the name of
the Clearing Member to whom the premium is to be paid; and (i)
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the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Collateral Account, a specified Margin Account, or the
Senior Security Account for such Fund. Upon the Custodian's payment of the
premium and the return and/or cancellation of any receipt issued pursuant to
paragraphs 6, 8 or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction, the Custodian shall
remove, or direct the Depository to remove, the previously imposed restrictions
on the Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a
Closing Purchase Transaction with respect to any Option purchased or written by
the Fund and described in this Article, the Custodian shall delete such Option
from the statements delivered to the Company pursuant to paragraph 3 Article
III herein, and upon the return and/or cancellation of any receipts issued by
the Custodian, shall make such withdrawals from the Collateral Account, and the
Margin Account and/or the Senior Security Account as may be specified in a
Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI.
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Company shall deliver to the Custodian a Certificate specifying
with respect to such Futures Contract, (or with respect to any number of
identical Futures Contract(s)): (a) the category of Futures Contract (the name
of the underlying stock index or financial instrument); (b) the number of
identical Futures Contracts entered into; (c) the delivery or settlement date
of the Futures Contract(s); (d) the date the Futures Contract(s) was (were)
entered into and the maturity date; (e) whether the Fund is buying (going long)
or selling (going short) on such Futures Contract(s); (f) the amount of cash
and/or the amount and kind of Securities, if any, to be deposited in the Senior
Security Account for such Fund; (g) the name of the broker, dealer, or futures
commission merchant through whom the Futures Contract was entered into; and (h)
the amount of fee or commission, if any, to be paid and the name of the broker,
dealer, or futures commission merchant to whom such amount is to be paid. The
Custodian shall make the deposits, if any, to the Margin Account in accordance
with the terms and conditions of the Margin Account Agreement. The Custodian
shall make payment out of the moneys specifically allocated to such Fund of the
fee or commission, if any, specified in the Certificate and deposit in the
Senior Security Account for such Fund the amount of cash and/or the amount and
kind of Securities specified in said Certificate.
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2. (a) Any variation margin payment or similar
payment required to be made by the Fund to a broker, dealer, or futures
commission merchant with respect to an outstanding Futures Contract, shall be
made by the Custodian in accordance with the terms and conditions of the Margin
Account Agreement.
(b) Any variation margin payment or similar
payment from a broker, dealer, or futures commission merchant to the Fund with
respect to an outstanding Futures Contract, shall be received and dealt with by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement is made on such
Futures Contract, the Company shall deliver to the Custodian a Certificate
specifying: (a) the Futures Contract; (b) with respect to a Stock Index Futures
Contract, the total cash settlement amount to be paid or received, and with
respect to a Financial Futures Contract, the Securities and/or amount of cash
to be delivered or received; (c) the broker, dealer, or futures commission
merchant to or from whom payment or delivery is to be made or received; and (d)
the amount of cash and/or Securities to be withdrawn from the Senior Security
Account for such Fund. The Custodian shall make the payment or delivery
specified in the Certificate, and delete such Futures Contract from the
statements delivered to the Company pursuant to paragraph 3 of Article III
herein.
4. Whenever the Fund shall enter into a Futures Contract
to offset a Futures Contract held by the Custodian hereunder, the Company shall
deliver to the Custodian a Certificate specifying: (a) the items of information
required in a Certificate described in paragraph 1 of this Article, and (b) the
Futures Contract being offset. The Custodian shall make payment out of the
money specifically allocated to such Fund of the fee or commission, if any,
specified in the Certificate and delete the Futures Contract being offset from
the statements delivered to the Company pursuant to paragraph 3 of Article III
herein, and make such withdrawals from the Senior Security Account for such
Fund as may be specified in such Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
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ARTICLE VII.
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract
Option by the Fund, the Company shall promptly deliver to the Custodian a
Certificate specifying with respect to such Futures Contract Option: (a) the
type of Futures Contract Option (put or call); (b) the type of Futures Contract
and such other information as may be necessary to identify the Futures Contract
underlying the Futures Contract option purchased; (c) the expiration date; (d)
the exercise price; (e) the dates of purchase and settlement; (f) the amount of
premium to be paid by the Fund upon such purchase; (g) the name of the broker
or futures commission merchant through whom such option was purchased; and (h)
the name of the broker, or futures commission merchant, to whom payment is to
be made. The Custodian shall pay out of the moneys specifically allocated to
such Fund, the total amount to be paid upon such purchase to the broker or
futures commissions merchant through whom the purchase was made, provided that
the same conforms to the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract
Option purchased by the Fund pursuant to paragraph 1 hereof, the Company shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such sale: (a) the type of Future Contract Option (put or call); (b) the type
of Futures Contract and such other information as may be necessary to identify
the Futures Contract underlying the Futures Contract Option; (c) the date of
sale; (d) the sale price; (e) the date of settlement; (f) the total amount
payable to the Fund upon such sale; and (g) the name of the broker of futures
commission merchant through whom the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option being closed against
payment to the Custodian of the total amount payable to the Fund, provided the
same conforms to the total amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the
Fund pursuant to paragraph 1 is exercised by the Fund, the Company shall
promptly deliver to the Custodian a Certificate specifying: (a) the particular
Futures Contract Option (put or call) being exercised; (b) the type of Futures
Contract underlying the Futures Contract Option; (c) the date of exercise; (d)
the name of the broker or futures commission merchant through whom the Futures
Contract Option is exercised; (e) the net total amount, if any, payable by the
Fund; (f) the amount, if any, to be received by the Fund; and (g) the amount of
cash and/or the amount and kind of Securities to be deposited in the Senior
Security Account for such Fund. The Custodian shall make, out of the moneys
and Securities specifically allocated to such Fund,
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the payments, if any, and the deposits, if any, into the Senior Security
Account as specified in the Certificate. The deposits, if any, to be made to
the Margin Account shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option,
the Company shall promptly deliver to the Custodian a Certificate specifying
with respect to such Futures Contract Option: (a) the type of Futures Contract
Option (put or call); (b) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract underlying the
Futures Contract Option; (c) the expiration date; (d) the exercise price; (e)
the premium to be received by the Fund; (f) the name of the broker or futures
commission merchant through whom the premium is to he received; and (g) the
amount of cash and/or the amount and kind of Securities, if any, to be
deposited in the Senior Security Account for such Fund. The Custodian shall,
upon receipt of the premium specified in the Certificate, make out of the
moneys and Securities specifically allocated to such Fund the deposits into the
Senior Security Account, if any, as specified in the Certificate. The
deposits, if any, to be made to the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Company shall promptly deliver to the
Custodian a Certificate specifying: (a) the particular Futures Contract Option
exercised; (b) the type of Futures Contract underlying the Futures Contract
Option; (c) the name of the broker or futures commission merchant through whom
such Futures Contract Option was exercised; (d) the net total amount, if any,
payable to the Fund upon such exercise; (e) the net total amount, if any,
payable by the Fund upon such exercise; and (f) the amount of cash and/or the
amount and kind of Securities to be deposited in the Senior Security Account
for such Fund. The Custodian shall, upon its receipt of the net total amount
payable to the Fund, if any, specified in such Certificate make the payments,
if any, and the deposits, if any, into the Senior Security Account as specified
in the Certificate. The deposits, if any, to be made to the Margin Account
shall be made by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written
by the Fund and which is a put is exercised, the Company shall promptly deliver
to the Custodian a Certificate specifying: (a) the particular Futures Contract
Option exercised; (b) the type of Futures Contract underlying such Futures
Contract option; (c) the name of the broker or futures commission merchant
through whom such Futures Contract Option is exercised; (d) the net total
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amount, if any, payable to the Fund upon such exercise; (e) the net total
amount, if any, payable by the Fund upon such exercise; and (f) the amount and
kind of Securities and/or cash to be withdrawn from or deposited in, the Senior
Security Account for such Fund, if any. The Custodian shall, upon its receipt
of the net total amount payable to the Fund, if any, specified in the
Certificate, make out of the moneys and Securities specifically allocated to
such Fund, the payments, if any, and the deposits, if any, into the Senior
Security Account as specified in the Certificate. The deposits to and/or
withdrawals from the Margin Account, if any, shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account Agreement.
7. Whenever the Fund purchases any Futures Contract
Option identical to a previously written Futures Contract Option described in
this Article in order to liquidate its position as a writer of such Futures
Contract Option, the Company shall promptly deliver to the Custodian a
Certificate specifying with respect to the Futures Contract Option being
purchased: (a) that the transaction is a closing transaction; (b) the type of
Futures Contract and such other information as may be necessary to identify the
Futures Contract underlying the Futures Option Contract; (c) the exercise
price; (d) the premium to be paid by the Fund; (e) the expiration date; (f) the
name of the broker or futures commission merchant to whom the premium is to be
paid; and (g) the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Senior Security Account for such Fund. The
Custodian shall effect the withdrawals from the Senior Security Account
specified in the Certificate. The withdrawals, if any, to be made from the
Margin Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a
closing transaction with respect to, any Futures Contract Option written or
purchased by the Fund and described in this Article, the Custodian shall (a)
delete such Futures Contract Option from the statements delivered to the
Company pursuant to paragraph 3 of Article III herein and, (b) make such
withdrawals from and/or in the case of an exercise such deposits into the
Senior Security Account as may be specified in a Certificate. The deposits to
and/or withdrawals from the Margin Account, if any, shall be made by the
Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article shall be
subject to Article VI hereof.
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ARTICLE VIII.
SHORT SALES
1. Promptly after any short sales by any Series of the
Fund, the Company shall promptly deliver to the Custodian a Certificate
specifying: (a) the name of the issuer and the title of the Security; (b) the
number of shares or principal amount sold, and accrued interest or dividends,
if any; (c) the dates of the sale and settlement; (d) the sale price per unit;
(e) the total amount credited to the Fund upon such sale, if any, (f) the
amount of cash and/or the amount and kind of Securities, if any, which are to
be deposited in a Margin Account and the name in which such Margin Account has
been or is to be established; (g) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in a Senior Security Account, and (h)
the name of the broker through whom such short sale was made. The Custodian
shall upon its receipt of a statement from such broker confirming such sale and
that the total amount credited to the Fund upon such sale, if any, as specified
in the Certificate is held by such broker for the account of the Custodian (or
any nominee of the Custodian) as custodian of the Fund, issue a receipt or make
the deposits into the Margin Account and the Senior Security Account specified
in the Certificate.
2. In connection with the closing-out of any short sale,
the Company shall promptly deliver to the Custodian a Certificate specifying
with respect to each such closing out: (a) the name of the issuer and the title
of the Security; (b) the number of shares or the principal amount, and accrued
interest or dividends, if any, required to effect such closing-out to be
delivered to the broker; (c) the dates of closing-out and settlement; (d) the
purchase price per unit; (e) the net total amount payable to the Fund upon
such closing-out; (f) the net total amount payable to the broker upon such
closing-out; (g) the amount of cash and the amount and kind of Securities to be
withdrawn, if any, from the Margin Account; (h) the amount of cash and/or the
amount and kind of Securities, if any, to be withdrawn from the Senior Security
Account; and (i) the name of the broker through whom the Fund is effecting such
closing-out. The Custodian shall, upon receipt of the net total amount payable
to the Fund upon such closing-out, and the return and/or cancellation of the
receipts, if any, issued by the Custodian with respect to the short sale being
closed-out, pay out of the moneys held for the account of the Fund to the
broker the net total amount payable to the broker, and make the withdrawals
from the Margin Account and the Senior Security Account, as the same are
specified in the Certificate.
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ARTICLE IX.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase
Agreement with respect to Securities and money held by the Custodian hereunder,
the Company shall deliver to the Custodian a Certificate, or in the event such
Reverse Repurchase Agreement is a Money Market Security, a Certificate or Oral
Instructions specifying: (a) the total amount payable to the Fund in connection
with such Reverse Repurchase Agreement and specifically allocated to such Fund;
(b) the broker or dealer through or with whom the Reverse Repurchase Agreement
is entered; (c) the amount and kind of Securities to be delivered by the Fund
to such broker or dealer; (d) the date of such Reverse Repurchase Agreement;
and (e) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Fund to be deposited in a Senior Security
Account for such Fund in connection with such Reverse Repurchase Agreement.
The Custodian shall, upon receipt of the total amount payable to the Fund
specified in the Certificate, Oral Instructions, or Written Instructions make
the delivery to the broker or dealer, and the deposits, if any, to the Senior
Security Account, specified in such Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in preceding paragraph 1 of this Article, the Company shall
promptly deliver a Certificate or, in the event such Reverse Repurchase
Agreement is a Money Market Security, a Certificate or Oral Instructions to the
Custodian specifying: (a) the Reverse Repurchase Agreement being terminated;
(b) the total amount payable by the Fund in connection with such termination;
(c) the amount and kind of Securities to be received by the Fund; (d) the date
of termination; (e) the name of the broker or dealer with or through whom
the Reverse Repurchase Agreement is tobe terminated; and (f) the amount of cash
and/or the amount and kind of Securities to be withdrawn from the Senior
Securities Account for such Fund. The Custodian shall, upon receipt of the
amount and kind of Securities to be received by the Fund specified in the
Certificate or Oral Instructions, make the payment to the broker or dealer, and
the withdrawals, if any, from the Senior Security Account, specified in such
Certificate or Oral Instructions.
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ARTICLE X.
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities
specifically allocated to the Series held by the Custodian hereunder, the
Company shall deliver or cause to be delivered to the Custodian a Certificate
specifying with respect to each such loan: (a) the name of the issuer and the
title of the Securities, (b) the number of shares or the principal amount
loaned, (c) the date of loan and delivery, (d) the total amount to be delivered
to the Custodian against the loan of the Securities, including the amount of
cash collateral and the premium, if any, separately identified, and (e) the
name of the broker, dealer, or financial institution to which the loan was
made. The Custodian shall deliver the Securities thus designated to the
broker, dealer or financial institution to which the loan was made upon receipt
of the total amount designated as to be delivered against the loan of
Securities. The Custodian may accept payment in connection with a delivery
otherwise than through the Book-Entry System or Depository only in the form of
a certified or bank cashier's check payable to the order of the Company or the
Custodian drawn on New York Clearing House funds and may deliver Securities in
accordance with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of
Securities by the Company, the Company shall deliver or cause to be delivered
to the Custodian a Certificate specifying with respect to each such loan
termination and return of Securities: (a) the name of the issuer and the title
of the Securities to be returned, (b) the number of shares or the principal
amount to be returned, (c) the date of termination, (d) the total amount to be
delivered by the Custodian (including the cash collateral for such Securities
minus any offsetting credits as described in said Certificate), and (e) the
name of the broker, dealer, or financial institution from which the Securities
will be returned. The Custodian shall receive all Securities returned from the
broker, dealer, or financial institution to which such Securities were loaned
and upon receipt thereof shall pay, out of the moneys held for the account of
the Fund, the total amount payable upon such return of Securities as set forth
in the Certificate.
ARTICLE XI.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Senior Security Account as specified in a
Certificate received by the Custodian. Such
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Certificate shall specify the Fund for which such deposit or withdrawal is to
be made and the amount of cash and/or the amount and kind of Securities
specifically allocated to such Fund to be deposited in, or withdrawn from, such
Senior Security Account for such Fund. In the event that the Company fails to
specify in a Certificate, the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities to be deposited by
the Custodian into, or withdrawn from, a Senior Securities Account, the
Custodian shall be under no obligation to make any such deposit or withdrawal
and shall so notify the Company.
2. The Custodian shall make deliveries or payments from
a Margin Account to the broker, dealer, futures commission merchant or Clearing
Member in whose name, or for whose benefit, the account was established as
specified in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin Account shall
be dealt with in accordance with the terms and conditions of the Margin Account
Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by the Custodian in
any Collateral Account described herein. In accordance with applicable law the
Custodian may enforce its lien and realize on any such property whenever the
Custodian has made payment or delivery pursuant to any Put Option guarantee
letter or similar document or any receipt issued hereunder by the Custodian.
In the event the Custodian should realize on any such property net proceeds
which are less than the Custodian; obligations under any Put Option guarantee
letter or similar document or any receipt, such deficiency shall be a debt owed
the Custodian by the Company within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the
Company with a statement with respect to each Margin Account in which money or
Securities are held specifying as of the close of business on the previous
business day: (a) the name of the Margin Account; (b) the amount and kind of
Securities held therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker, dealer, or futures
commission merchant specified in the name of a Margin Account a copy of the
statement furnished to the Company with respect to such Margin Account.
6. Promptly after the close of business on each business
day in which cash and/or Securities are maintained in a Collateral Account for
any Fund, the Custodian shall furnish the Company with a statement with respect
to such Collateral Account specifying the amount of cash and/or the amount and
kind of
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Securities held therein. No later than the close of business next succeeding
the delivery to the Company of such statement, the Company shall furnish to the
Custodian a Certificate or Written Instructions specifying the then market
value of the Securities described in such statement. In the event such then
market value is indicated to be less than the Custodian's obligation with
respect to any outstanding Put Option guarantee letter or similar document, the
Company shall promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to eliminate such
deficiency.
ARTICLE XII.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Company shall furnish to the Custodian a copy of
the resolution of the Board of Trustees of the Company, certified by the
Secretary or any Assistant Secretary, either (i) setting forth with respect to
the Series specified therein the date of the declaration of a dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable per
Share of such Fund to the shareholders of record as of that date and the total
amount payable to the Dividend Agent and any sub-dividend agent or co-dividend
agent of the Fund on the payment date, or (ii) authorizing with respect to the
Fund specified therein the declaration of dividends and distributions on a
daily basis and authorizing the Custodian to rely on Oral Instructions or a
Certificate setting forth the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable per
Share of such Series to the shareholders of record as of that date and the
total amount payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution,
Oral Instructions or Certificate, as the case may be, the Custodian shall pay
out of the moneys held for the account of such Fund the total amount payable to
the Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund.
ARTICLE XIII.
SALE AND REDEMPTION OF SHARES
1. Whenever the Company shall sell any Shares of the
Fund, it shall deliver to the Custodian a Certificate duly specifying:
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(a) The number of Shares sold, trade date, and
price; and
(b) The amount of money to be received by the
Custodian for the sale of such Shares and specifically allocated to the
separate account in the name of such Fund.
2. Upon receipt of such money from the Transfer Agent,
the Custodian shall credit such money to the separate account in the name of
the Fund for which such money was received.
3. Upon issuance of any Shares of the Fund described in
the foregoing provisions of this Article, the Custodian shall pay, out of the
money held for the account of such Fund, all original issue or other taxes
required to be paid by the Company in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Company
desires the Custodian to make payment out of the money held by the Custodian
hereunder in connection with a redemption of any Shares of the Fund, it shall
furnish to the Custodian a Certificate specifying:
(a) The number and Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice
setting forth the number of Shares received by the Transfer Agent for
redemption and that such Shares are in good form for redemption, the Custodian
shall make payment to the Transfer Agent out of the moneys held in the separate
account in the name of the Fund the total amount specified in the Certificate
issued pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the
redemption of any Shares, whenever any Shares are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the
Company, the Custodian, unless otherwise instructed by a Certificate, shall,
upon receipt of an advice from the Company or its agent setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check
redemption privilege out of the moneys held in the separate account of the Fund
of the Shares being redeemed.
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ARTICLE XIV.
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion
advance funds on behalf of the Series which results in an overdraft because the
moneys held by the Custodian in the separate account for such Series shall be
insufficient to pay the total amount payable upon a purchase of Securities
specifically allocated to such Series, as set forth in a Certificate or Oral
Instructions, or which results in an overdraft in the separate account of such
Series for some other reason, or if the Company is for any other reason
indebted to the Custodian with respect to the Fund (except a borrowing for
investment or for temporary or emergency purposes using Securities as
collateral pursuant to a separate agreement and subject to the provisions of
paragraph 2 of this Article), such overdraft or indebtedness shall be deemed to
be a loan made by the Custodian to the Company for such Series payable on
demand and shall bear interest from the date incurred at a rate per annum
(based on a 360-day year for the actual number of days involved) equal to 1/2%
over Custodian's prime commercial lending rate in effect from time to time,
such rate to be adjusted on the effective date of any change in such prime
commercial lending rate but in no event to be less than 6% per annum. In
addition, the Company hereby agrees that the Custodian shall have a continuing
lien and security interest in and to any property specifically allocated to
such Series at any time held by it for the benefit of such Series or in which
the Company may have an interest which is then in the Custodian's possession or
control or in possession or control of any third party acting in the
Custodian's behalf. The Company authorizes the Custodian, in its sole
discretion, at any time to charge any such overdraft or indebtedness together
with interest due thereon against any balance of account standing to such
Series' credit on the Custodian's books. In addition, the Company hereby
covenants that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business the Fund
had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall
prior to 9 a.m., New York City time, advise the Custodian, in writing, of each
such borrowing and shall not incur any indebtedness not so specified other than
from the Custodian.
2. The Company will cause to be delivered to the
Custodian by any bank (including, if the borrowing is pursuant to a separate
agreement, the Custodian) from which it borrows money for investment or for
temporary or emergency purposes using Securities held by the Custodian
hereunder as collateral for such borrowings, a notice or undertaking in the
form currently employed by any such bank setting forth the amount which such
bank will loan to the Company against delivery of a stated amount
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of collateral. The Company shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a) the name of the
bank, (b) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement, (c) the time and date, if known, on which the
loan is to be entered into, (d) the date on which the loan becomes due and
payable, (e) the total amount payable to the Fund on the borrowing date, (f)
the market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities, and (g) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the Investment Company Act
of 1940 and the Fund's prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank of the
total amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the Certificate. The Custodian may, at the
option of the lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending bank by
virtue of any promissory note or loan agreement. The Custodian shall deliver
such Securities as additional collateral as may be specified in a Certificate
to collateralize further any transaction described in this paragraph. The
Company shall cause all Securities released from collateral status to be
returned directly to the Custodian, and the Custodian shall receive from time
to time such return of collateral as may be tendered to it. In the event that
the company fails to specify in a Certificate the Series, the name of the
issuer, the title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by the Custodian, the
Custodian shall not be under any obligation to deliver any Securities.
ARTICLE XV.
TERMINAL LINK
1. At no time and under no circumstances shall the
Company be obligated to have or utilize the Terminal Link, and the provisions
of this Article shall apply if, but only if, the Company in its sole and
absolute discretion elects to utilize the Terminal Link to transmit
Certificates to the Custodian.
2. The Terminal Link shall be utilized by the Company
only for the purpose of the Company providing Certificates to the Custodian
with respect to transactions involving Securities or for the transfer of money
to be applied to the payment of dividends, distributions or redemptions of Fund
Shares, and shall
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be utilized by the Custodian only for the purpose of providing notices to the
Company. Such use shall commence only after the Company shall have delivered
to the Custodian a Certificate substantially in the form of Exhibit D and shall
have established access codes. Each use of the Terminal Link by the Company
shall constitute a representation and warranty that the Terminal Link is being
used only for the purposes permitted hereby, that at least two Officers have
each utilized an access code, that such safekeeping procedures have been
established by the Company, and that such use does not contravene the
Investment Company Act of 1940, as amended, or the rules or regulations
thereunder.
3. The Company shall obtain and maintain at its own cost
and expense all equipment and services, including, but not limited to
communications services, necessary for it to utilize the Terminal Link, and the
Custodian shall not be responsible for the reliability or availability of any
such equipment or services.
4. The Company acknowledges that any data bases made
available as part of, or through the Terminal Link and any proprietary data,
software, processes, information and documentation (other than any such which
are or become part of the public domain or are legally required to be made
available to the public) (collectively, the "Information"), are the exclusive
and confidential property of the Custodian. The Company shall, and shall
inform others to which it discloses the Information, to keep the Information
confidential by using the same care and discretion it uses with respect to its
own confidential property and trade secrets, and shall neither make nor permit
any disclosure without the express prior written consent of the Custodian.
5. Upon termination of this Agreement for any reason,
the Company shall return to the Custodian any and all copies of the Information
which are in the Company's possession or under its control, or which the
Company distributed to third parties. The provisions of this Article shall not
affect the copyright status of any of the Information which may be copyrighted
and shall apply to all Information whether or not copyrighted.
6. The Custodian reserves the right to modify the
Terminal Link from time to time without notice to the Company except that the
Custodian shall give the Company notice not less than 75 days in advance of any
modification which would materially adversely affect the Company's operation,
and the Company agrees that the Company shall not modify or attempt to modify
the Terminal Link without the Custodian's prior written consent. The Company
acknowledges that any software or procedures provided the Company as part of
the Terminal Link are the property of the Custodian and, accordingly, the
Company agrees that any modifications to the Terminal Link, whether by
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the Company, or by the Custodian and whether with or without the Custodian's
consent, shall become the property of the Custodian.
7. Neither the Custodian nor any manufacturers and
suppliers it utilizes or the Company utilizes in connection with the Terminal
Link makes any warranties or representations, express or implied, in fact or in
law, including but not limited to warranties of merchantability and fitness for
a particular purpose.
8. The Company will advise its Officers and employees to
treat the authorization codes and the access codes applicable to Terminal Link
with extreme care, and irrevocably authorizes the Custodian to act in
accordance with and rely on Certificates received by it through the Terminal
Link. The Company acknowledges that it is its responsibility to assure that
only its Officers use the Terminal Link on its behalf, and that a Custodian
shall not be responsible nor liable for use of the Terminal Link on the
Company's behalf by persons other than such persons or Officers, or by only a
single Officer, nor for any alteration, omission, or failure to promptly
forward.
9.(a). Except as otherwise specifically provided in Section
9(b) of this Article, the Custodian shall have no liability for any losses,
damages, injuries, claims, costs or expenses arising out of or in connection
with any failure, malfunction or other problem relating to the Terminal Link
except for money damages suffered as the direct result of the negligence of the
Custodian in an amount not exceeding for any incident $25,000 provided,
however, that the Custodian shall have no liability under this Section 9 if the
Company fails to comply with the provisions of Section 11.
9(b). The Custodian's liability for its negligence in
executing or failing to execute in accordance with a Certificate received
through Terminal Link shall be only with respect to a transfer of funds which
is not made in accordance with such Certificate after such Certificate shall
have been duly acknowledged by the Custodian, and shall be contingent upon the
Company complying with the provisions of Section 12 of this Article, and shall
be limited to (i) restoration of the principal amount mistransferred, if and to
the extent that the Custodian would be required to make such restoration under
applicable law, and (ii) the lesser of (A) a Company's actual pecuniary loss
incurred by reason of its loss of use of the mistransferred funds or the funds
which were not transferred, as the case may be, or (B) compensation for the
loss of the use of the mistransferred funds or the funds which were not
transferred, as the case may be, at a rate per annum equal to the average
federal funds rate as computed from the Federal Reserve Bank of New York's
daily determination of the effective rate for federal funds, for the period
during which a Company has lost use of such funds. In no
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event shall the Custodian have any liability for failing to execute in
accordance with a Certificate a transfer of funds where the Certificate is
received by the Custodian through Terminal Link other than through the
applicable transfer module for the particular instructions contained in such
Certificate.
10. Without limiting the generality of the foregoing, in
no event shall the Custodian or any manufacturer or supplier of its computer
equipment, software or services relating to the Terminal Link be responsible
for any special, indirect, incidental or consequential damages which the
Company may incur or experience by reason of its use of the Terminal Link even
if the Custodian or any manufacturer or supplier has been advised of the
possibility of such damages, nor with respect to the use of the Terminal Link
shall the Custodian or any such manufacturer or supplier be liable for acts of
God, or with respect to the following to the extent beyond such person's
reasonable control: machine or computer breakdown or malfunction, interruption
or malfunction of communication facilities, labor difficulties or any other
similar or dissimilar cause.
11. The Company shall notify the Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, the Terminal Link
as promptly as practicable, and in any event within 24 hours after the earliest
of (i) discovery thereof, (ii) the Business Day on which discovery should have
occurred through the exercise of reasonable care and (iii) in the case of any
error, the date of actual receipt of the earliest notice which reflects such
error, it being agreed that discovery and receipt of notice may only occur on a
business day. The Custodian shall advise the Company as aforesaid whenever the
Custodian learns of any errors, omissions or interruption in, or delay or
unavailability of, the Terminal Link.
12. The Custodian shall verify to the Company, by use of
the Terminal Link, receipt of each Certificate the Custodian receives through
the Terminal Link, and in the absence of such verification the Custodian shall
not be liable for any failure to act in accordance with such Certificate and
the Company may not claim that such Certificate was received by the Custodian.
Such verification, which may occur after the Custodian has acted upon such
Certificate, shall be accomplished on the same day on which such Certificate is
received.
ARTICLE XVI.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ,
as sub-custodian for the Series' Foreign Securities (as
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such term is defined in paragraph (c)(1) of Rule 17f-5 under the Investment
Company Act of 1940, as amended) and other assets, the foreign banking
institutions and foreign securities depositories and clearing agencies
designated on Schedule I hereto ("Foreign Sub-Custodians") to carry out their
respective responsibilities in accordance with the terms of the sub-custodian
agreement between each such Foreign SubCustodian and the Custodian, copies of
which have been previously delivered to the Company and receipt of which is
hereby acknowledged (each such agreement, a "Foreign SubCustodian Agreement").
Upon receipt of a Certificate, together with a certified resolution
substantially in the form attached as Exhibit E of the Company's Board of
Trustees, the Company may designate any additional foreign sub-custodian with
which the Custodian has an agreement for such entity to act as the Custodian's
agent, as its sub-custodian and any such additional foreign sub-custodian shall
be deemed added to Schedule I. Upon receipt of a Certificate from the Company,
the Custodian shall cease the employment of any one or more Foreign
Sub-Custodians for maintaining custody of the Fund's assets and such Foreign
Sub-Custodian shall be deemed deleted from Schedule I
2. Each Foreign Sub-Custodian Agreement shall be
substantially in the form previously delivered to the Company and will not be
amended in a way that materially adversely affects the Company or the Fund
without the Company's prior written consent.
3. The Custodian shall identify on its books as
belonging to the Fund the Foreign Securities held by each Foreign
Sub-Custodian. At the election of the Company, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims by the
Company against a Foreign Sub-Custodian as a consequence of any loss, damage,
cost, expense, liability or claim sustained or incurred by the Fund or the
Company if and to the extent that the Fund or the Company has not been made
whole for any such loss, damage, cost, expense, liability or claim.
4. Upon request of the Company, the Custodian will,
consistent with the terms of the applicable Foreign Sub-Custodian Agreement,
use reasonable efforts to arrange for the independent accountants of the
Company to be afforded access to the books and records of any Foreign
Sub-Custodian insofar as such books and records relate to the performance of
such Foreign Sub-Custodian under its agreement with the Custodian on behalf of
the Fund.
5. The Custodian will supply to the Company from time to
time, as mutually agreed upon, statements in respect of the securities and
other assets of the Fund held by Foreign SubCustodians, including but not
limited to, an identification of entities having possession of the Fund's
Foreign Securities and
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other assets, and advices or notifications of any transfers of Foreign
Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for the Custodian on behalf of the Fund.
6. The Custodian shall furnish annually to the Company,
as mutually agreed upon, information concerning the Foreign Sub-Custodians
employed by the Custodian. Such information shall be similar in kind and scope
to that furnished to the Company in connection with the Company's initial
approval of such Foreign Sub-Custodians and, in any event, shall include
information pertaining to (i) the Foreign Custodians' financial strength,
general reputation and standing in the countries in which they are located and
their ability to provide the custodial services required, and (ii) whether the
Foreign Sub-Custodians would provide a level of safeguards for safekeeping and
custody of securities not materially different form those prevailing in the
United States. The Custodian shall monitor the general operating performance
of each Foreign Sub-Custodian, and at least annually obtain and review the
annual financial report published by such Foreign Sub-Custodian to determine
that it meets the financial criteria of an "Eligible Foreign Custodian" under
Rule 17f-5(c)(2)(i) or (ii). The Custodian will promptly inform the Company in
the event that the Custodian learns that a Foreign Sub-Custodian no longer
satisfies the financial criteria of an "Eligible Foreign Custodian" under such
Rule. The Custodian agrees that it will use reasonable care in monitoring
compliance by each Foreign Sub-Custodian with the terms of the relevant Foreign
Sub-Custodian Agreement and that if it learns of any breach of such Foreign
Sub-Custodian Agreement believed by the Custodian to have a material adverse
effect on the Fund or the Company it will promptly notify the Company of such
breach. The Custodian also agrees to use reasonable and diligent efforts to
enforce its rights under the relevant Foreign Sub-Custodian Agreement.
7. The Custodian shall transmit promptly to the Company
all notices, reports or other written information received pertaining to the
Fund's Foreign Securities, including without limitation, notices of corporate
action, proxies and proxy solicitation materials.
8. Notwithstanding any provision of this Agreement to
the contrary, settlement and payment for securities received for the account of
the Fund and delivery of securities maintained for the account of the Fund may
be effected in accordance with the customary or established securities trading
or securities processing practices and procedures in the jurisdiction or market
in which the transaction occurs, including, without limitation, delivery of
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a
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receipt with the expectation of receiving later payment for such securities
from such purchaser or dealer.
9. Notwithstanding any other provision in this Agreement
to the contrary other than this Section 9, with respect to any losses or
damages arising out of or relating to actions or omissions of any Foreign
sub-Custodian the sole responsibility and liability of the Custodian shall be
to take appropriate action at the Fund's expense to recover such loss or damage
from the Foreign sub-Custodian. It is expressly understood and agreed that the
Custodian's sole responsibility and liability with respect to any such losses
or damages shall be limited to amounts so recovered from the Foreign
sub-Custodian, provided, however, that if the Custodian has failed to fulfill
its duties and obligations under this Article then the Custodian shall, in
addition, be liable for the direct money damages caused by any such failure,
but in no event shall be liable for any special, indirect, or consequential
damages, or lost profits or loss of business, even if previously informed of
the possibility of such damages and regardless of the form of action.
ARTICLE XVII.
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in
Article XVI neither the Custodian nor its nominee shall be liable for any loss
or damage, including counsel fees, resulting from its action or omission to act
or otherwise, either hereunder or under any Margin Account Agreement, except
for any such loss or damage arising out of its own negligence or willful
misconduct. In no event shall the Custodian be liable to the Company or any
third party for special, indirect or consequential damages or lost profits or
loss of business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action. The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and obtain the
advice and opinion of counsel to the Company or of its own counsel and shall be
fully protected with respect to anything done or omitted by it in good faith in
conformity with such written advice or written opinion. The Custodian shall be
liable to the Company for any loss or damage resulting from the use of the
Book-Entry System or any Depository arising by reason of any negligence or
willful misconduct on the part of the Custodian or any of its employees or
agents.
2. Without limiting the generality of the foregoing, the
Custodian shall be under no obligation to inquire into, and shall not be liable
for:
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(a) The validity of the issue of any Securities
purchased, sold, or written by or for the Company, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor;
(b) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of
any dividend by the Company;
(d) The legality of any borrowing by the Company
using Securities as collateral;
(e) The legality of any loan of portfolio
Securities, nor shall the Custodian be under any duty or obligation to see to
it that any cash collateral delivered to it by a broker, dealer, or financial
institution or held by it at any time as a result of such loan of portfolio
Securities of the Company is adequate collateral for the Fund against any loss
it might sustain as a result of such loan. The Custodian specifically, but not
by way of limitation, shall not be under any duty or obligation periodically to
check or notify the Company that the amount of such cash collateral held by it
for the Company is sufficient collateral for the Fund, but such duty or
obligation shall be the sole responsibility of the Company. In addition, the
Custodian shall be under no duty or obligation to see that any broker, dealer
or financial institution to which portfolio Securities of the Company are lent
pursuant to Article XIV of this Agreement makes payment to it of any dividends
or interest which are payable to or for the account of the Company during the
period of such loan or at the termination of such loan, provided, however, that
the Custodian shall promptly notify the Company in the event that such
dividends or interest are not paid and received when due; or
(f) The sufficiency or value of any amounts of
money and/or Securities held in any Margin Account, Senior Security Account or
Collateral Account in connection with transactions by the Company. In
addition, the Custodian shall be under no duty or obligation to see that any
broker, dealer, futures commission merchant or Clearing Member makes payment to
the Company of any variation margin payment or similar payment which the
Company may be entitled to receive from such broker, dealer, futures commission
merchant or Clearing Member, to see that any payment received by the Custodian
from any broker, dealer, futures commission merchant or Clearing Member is the
amount the Company is entitled to receive, or to notify the Company of the
Custodian's receipt or non-receipt of any such payment.
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3. The Custodian shall not be liable for, or considered
to be the Custodian of, any money, whether or not represented by any check,
draft, or other instrument for the payment of money, received by it on behalf
of the Company until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing the Company's
interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall
not be liable for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository, unless the Custodian shall have actually
received timely notice from the Depository. In no event shall the Custodian
have any responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the Depository of any
amount payable upon Securities deposited in the Depository which may mature or
be redeemed, retired, called or otherwise become payable. However, upon
receipt of a Certificate from the Company of an overdue amount on Securities
held in the Depository the Custodian shall make a claim against the Depository
on behalf of the Company, except that the Custodian shall not be under any
obligation to appear in, prosecute or defend any action suit or proceeding in
respect to any Securities held by the Depository which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount due to the Company
from the Transfer Agent of the Company nor to take any action to effect payment
or distribution by the Transfer Agent of the Company of any amount paid by the
Custodian to the Transfer Agent of the Company in accordance with this
Agreement.
6. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount, if the Securities
upon which such amount is payable are in default, or if payment is refused
after due demand or presentation, unless and until (i) it shall be directed to
take such action by a Certificate and (ii) it shall be assured to its
satisfaction of reimbursement of its costs and expenses in connection with any
such action.
7. The Custodian may in addition to the employment of
Foreign Sub-Custodians pursuant to Article XVI appoint one or more banking
institutions as Depository or Depositories, as Sub-Custodian or Sub-Custodians,
or as Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and moneys at any time
owned by the Company, upon such terms and conditions as may be approved in
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a Certificate or contained in an agreement executed by the Custodian, the
Company and the appointed institution.
8. The Custodian shall not be under any duty or
obligation (a) to ascertain whether any Securities at any time delivered to, or
held by it or by any Foreign Sub-Custodian, for the account of the Company and
specifically allocated to the Fund are such as properly may be held by the
Company or the Fund under the provisions of its then current prospectus, or (b)
to ascertain whether any transactions by the Company, whether or not involving
the Custodian, are such transactions as may properly be engaged in by the
Company.
9. The Custodian shall be entitled to receive and the
Company agrees to pay to the Custodian all out-of-pocket expenses and such
compensation as may be agreed upon in writing from time to time between the
Custodian and the Company. The Custodian may charge such compensation and any
expenses with respect to the Series incurred by the Custodian in the
performance of its duties pursuant to such agreement against any money
specifically allocated to such Series. The expenses for which the Custodian
shall be entitled to reimbursement hereunder shall include, but are not limited
to, the expenses of sub-custodians and foreign branches of the Custodian
incurred in settling outside of New York City transactions involving the
purchase and sale of Securities of the Company.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by the Custodian
and reasonably believed by the Custodian to be a Certificate. The Custodian
shall be entitled to rely upon any Oral Instructions actually received by the
Custodian hereinabove provided for. The Company agrees to forward to the
Custodian a Certificate or facsimile thereof confirming such Oral Instructions
in such manner so that such Certificate or facsimile thereof is received by the
Custodian, whether by hand delivery, telecopier or other similar device, or
otherwise, by the close of business of the same day that such Oral Instructions
are given to the Custodian. The Company agrees that the fact that such
confirming instructions are not received, or that contrary instructions are
received, by the Custodian shall in no way affect the validity of the
transactions or enforceability of the transactions hereby authorized by the
Company. The Company agrees that the Custodian shall incur no liability to the
Company in acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably appear to
have been received from an Officer.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and reasonably
believed by the Custodian to be given in accordance with the terms and
conditions of any Margin Account Agreement.
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Without limiting the generality of the foregoing, the Custodian shall be under
no duty to inquire into, and shall not be liable for, the accuracy of any
statements or representations contained in any such instrument or other notice
including, without limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or Clearing Member.
12. The books and records pertaining to the Company which
are in the possession of the Custodian shall be the property of the Company.
Such books and records shall be prepared and maintained as required by the
Investment Company Act of 1940, as amended, and other applicable securities
laws and rules and regulations. The Company, or the Company's authorized
representatives, shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request of the Company,
copies of any such books and records shall be provided by the Custodian to the
Company or the Company's authorized representative, and the Company shall
reimburse the Custodian its expenses of providing such copies. Upon reasonable
request of the Company, the Custodian shall provide in hard copy or on
microfilm, whichever the Custodian elects, any records included in any such
delivery which are maintained by the Custodian on a computer disc, or are
similarly maintained, and the Company shall reimburse the Custodian for its
expenses of providing such hard copy or micro-film.
13. The Custodian shall provide the Company with any
report obtained by the Custodian on the system of internal accounting control
of the Book-Entry System, the Depository or O.C.C., and with such reports on
its own systems of internal accounting control as the Company may reasonably
request from time to time.
14. The Company agrees to indemnify the Custodian against
and save the Custodian harmless from all liability, claims, losses and demands
whatsoever, including reasonable attorney's fees, howsoever arising or incurred
because of or in connection with this Agreement, including the Custodian's
payment or non-payment of checks pursuant to paragraph 6 of Article XIII as
part of any check redemption privilege program of the Company, except for any
such liability, claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, including, without limitation, those contained in article XVI the
Custodian may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the Custodian
in accordance with the customs prevailing from time to time among brokers or
dealers in such Securities. When the Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed
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simultaneously. The Company assumes all responsibility and liability for all
credit risks involved in connection with the Custodian's delivery of Securities
pursuant to instructions of the Company, which responsibility and liability
shall continue until final payment in full has been received by the Custodian.
16. The Custodian shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall
be implied in this Agreement against the Custodian.
ARTICLE XVIII.
TERMINATION
1. Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in writing specifying the date
of such termination, which shall be not less than ninety (90) days after the
date of giving of such notice. In the event such notice is given by the
Company, it shall be accompanied by a copy of a resolution of the Board of
Trustees of the Company, certified by the Secretary or any Assistant Secretary,
electing to terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. In the event such
notice is given by the Custodian, the Company shall, on or before the
termination date, deliver to the Custodian a copy of a resolution of the Board
of Trustees of the Company, certified by the Secretary or any Assistant
Secretary, designating a successor custodian or custodians. In the absence of
such designation by the Company, the Custodian may designate a successor
custodian which shall be a bank or trust company having not less than
$2,000,000 aggregate capital, surplus and undivided profits. Upon the date set
forth in such notice this Agreement shall terminate, and the Custodian shall
upon receipt of a notice of acceptance by the successor custodian on that date
deliver directly to the successor custodian all Securities and moneys then
owned by the Company and held by it as Custodian, after deducting all fees,
expenses and other amounts for the payment or reimbursement of which it shall
then be entitled.
2. If a successor custodian is not designated by the
Company or the Custodian in accordance with the preceding paragraph, the
Company shall upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the
Company) and moneys then owned by the Company be deemed to be its own custodian
and the Custodian shall thereby be relieved of all
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duties and responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book Entry System which cannot be
delivered to the Company to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE XIX.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed
by two of the present Officers of the Company under its seal, setting forth the
names and the signatures of the present Officers of the Company. The Company
agrees to furnish to the Custodian a new Certificate in similar form in the
event any such present Officer ceases to be an Officer of the Company, or in
the event that other or additional Officers are elected or appointed. Until
such new Certificate shall be received, the Custodian shall be fully protected
in acting under the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate.
2. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Custodian, shall be
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at 00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as the Custodian may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Company shall be sufficiently
given if addressed to the Company and mailed or delivered to it at its office
at the address for the Company first above written, or at such other place as
the Company may from time to time designate in writing.
4. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties with the same
formality as this Agreement and approved by a resolution of the Board of
Trustees of the Company.
5. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of the Company's
Board of Trustees.
6. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts New York
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without giving effect to conflict of laws principles thereof. Each party
hereby consents to the jurisdiction of a state or federal court situated in New
York City, New York in connection with any dispute arising hereunder and hereby
waives its right to trial by jury.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
8. The names "Conestoga Family of Funds," the "Company,"
the "Board of Trustees of the Company," and the "Company's Board of Trustees"
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated August 1, 1989, as amended, which is hereby referred to and a copy
of which is on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Company. The obligations of
the Company entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders or
representatives of the Company personally, but bind only Company property, and
all persons dealing with any class of Shares of the Company must look solely to
the Company property belonging to such class for the enforcement of any claims
against the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate Officers, thereunto duly
authorized and their respective corporate seals to be hereunto affixed, as of
the day and year first above written.
CONESTOGA FAMILY OF FUNDS
[SEAL] BY:s/
----------------------
Attest:
s/
---------------------------
THE BANK OF NEW YORK
[SEAL] By:s/
----------------------
Name:
Title:
Attest:
----------------------------
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XXXXXXXX X
I, , a Vice President with THE BANK OF NEW
YORK do hereby designate the following publications:
The Bond Buyer
Depository trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
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EXHIBIT A
CERTIFICATION
The undersigned, Xxxxx X. Xxxxxx, hereby certifies that he or
she is the duly elected and acting Vice President of Conestoga
Family of Funds, a Massachusetts trust (the "Company"), and
further certifies that the following resolution was adopted by
the Board of Trustees of the Company by unanimous consent on
May 1, 1995, and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
VOTED: That The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Company in the
form presented to this Board (the "Custody Agreement') is
authorized and instructed on a continuous and ongoing basis to
deposit in the Book-Entry System, as defined in the Custody
Agreement, all securities allocated to the Fund, as defined in
the Custody Agreement, eligible for deposit therein, and to
utilize the Book-Entry System to the extent possible in
connection with its performance thereunder, including, without
limitation, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries and
returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Conestoga Family of Funds as of the 1 day of May, 1995.
(SEAL) s/ Xxxxx X. Xxxxxx
------------------------------
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EXHIBIT B
CERTIFICATION
The undersigned, Xxxxx X. Xxxxxx, hereby certifies that he or
she is the duly elected and acting Vice President of Conestoga
Family of Funds, a Massachusetts trust (the "Company"), and
further certifies that the following resolution was adopted by
the Board of Trustees of the Company by unanimous consent on
May 1, 1995, and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
VOTED: That The Bank of New York, as Custodian pursuant to the
Custody Agreement is authorized and instructed on a continuous
and ongoing basis until such time as it receives a
Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Depository, as defined in the
Custody Agreement, all securities allocated to the
International Equity Fund, as defined in the Custody
Agreement, eligible for deposit therein, and to utilize the
Depository to the extent possible in connection with its
performance thereunder, including, without limitation, in
connection with settlements of purchases and sales of
securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Conestoga Family of Funds as of the 1 day of May, 1995.
(SEAL) s/ Xxxxx X. Xxxxxx
------------------------------
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EXHIBIT C
CERTIFICATION
The undersigned, Xxxxx X. Xxxxxx, hereby certifies that he or
she is the duly elected and acting Vice President of Conestoga
Family of Funds, a Massachusetts trust (the "Company"), and
further certifies that the following resolution was adopted by
the Board of Trustees of the Company by unanimous consent on
May 1, 1995, and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
VOTED: That The Bank of New York, as Custodian pursuant to the
Custody Agreement is authorized and instructed on a continuous
and ongoing basis until such time as it receives a
Certificate, as defined in the Custody Agreement, to the
contrary, to accept, utilize and act with respect to Clearing
Member confirmations for Options and transactions in Options
allocated to the Fund, as such terms are defined in the
Custody Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Conestoga Family of Funds as of the 1 day of May, 1995.
(SEAL) s/ Xxxxx X. Xxxxxx
------------------------------
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EXHIBIT D
CERTIFICATION
The undersigned, Xxxxx X. Xxxxxx, hereby certifies that he or
she is the duly elected and acting Vice President of Conestoga
Family of Funds, a Massachusetts trust (the "Company"), and
further certifies that the following resolution was adopted by
the Board of Trustees of the Company by unanimous consent on
May 1, 1995, and that such resolution has not been modified or
rescinded and is in full force and effect as of the date
hereof.
VOTED That The Bank of New York, as Custodian pursuant to the
Custody Agreement is authorized and instructed on a continuous
and ongoing basis to act in accordance with, and to rely on
Certificates (as defined in the Custody Agreement) given by
the Company to the Custodian by a Terminal Link (as defined in
the Custody Agreement).
FURTHER That the Company shall establish access codes and
VOTED: grant use of such access codes only to Officers of the Company
as defined in the Custody Agreement, shall establish internal
safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes, shall
limit its use of the Terminal Link to those purposes
permitted by the Custody Agreement, shall require at least two
such Officers to utilize their respective access codes in
connection with each such Certificate, and shall use the
Terminal Link only in a manner that does not contravene the
Investment Company Act of 1940, as amended, or the rules and
regulations thereunder.
FURTHER That Officers of the Company shall, following the
VOTED: establishment of such access codes and internal safekeeping
procedures, advise the Custodian that the same have been
established by delivering a Certificate, as defined in the
Custody Agreement, and the Custodian shall be entitled to rely
upon such advice.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of Conestoga Family of Funds as of the 1 day of May, 1995.
(SEAL) s/ Xxxxx X. Xxxxxx
-----------------------------
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THE BANK OF NEW YORK
GLOBAL CUSTODY FEE SCHEDULE
17F-5 QUALIFIED SUB-CUSTODIANS
FOR
CONESTOGA INTERNATIONAL EQUITY FUND
GLOBAL/
SAFEKEEPING FEE TRANSACTION FEE
*(IN BASIS POINTS) (U.S. DOLLARS)
Argentina 34.50 90
Australia 4.00 70
Austria 6.00 85
Bangladesh 50.00 000
Xxxxxxx (reg.bds) 2.50 85
Belgium (equities and cpn bds.) 4.00 85
Brazil 55.00 85
Canada 2.00 17
Chile 50.00 000
Xxxxx 31.00 60
Columbia 75.00 000
Xxxx Xxxxxxxx 23.00 50
Denmark 3.50 105
Euromarket 3.00 15
Finland 12.50 70
France 5.00 85
Germany 2.00 35
Greece 37.50 165
Hong Kong 11.00 90
Hungary 50.00 150
India 55.00 175
Indonesia 13.50 000
Xxxxxxx 3.50 50
Israel 75.00 55
Italy 9.00 00
Xxxxx (bonds) 4.00 00
Xxxxx (equities) 3.00 10
Luxembourg 8.00 80
Malaysia 15.00 000
Xxxxxx (bonds) 8.00 70
Mexico (equities) 15.00 70
Netherlands 6.00 12
New Zealand 3.50 85
Norway 2.00 85
Pakistan 40.00 000
Xxxx 75.00 000
Xxxxxxxxxxx 14.50 140
Poland 60.00 165
Portugal 31.00 000
Xxxxxxxxx 15.00 135
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GLOBAL/
SAFEKEEPING FEE TRANSACTION FEE
*(IN BASIS POINTS) (U.S. DOLLARS)
South Africa 1.50 35
South Korea 13.00 00
Xxxxx 0.00 00
Xxx Xxxxx 20.00 70
Sweden 3.00 60
Switzerland 3.50 125
Taiwan 17.00 000
Xxxxxxxx 15.00 00
Xxxxxx 00.00 000
Xxxxxx Xxxxxxx 3.00 35
United Kingdom (gilts) 4.00 55
Uruguay 55.00 85
Venezuela 41.50 75
*Fee is expressed in basis points per annum and is calculated based upon month
end market value.
Minimum fee for use of our global network
$500 per month, per portfolio
Minimum charges imposed by Agent Banks/Local Administrators
Chile - USD 5,000 per annum.
Columbia - USD 600 per month.
Multicurrency Accounting
Monthly fee of $1,250.00/per account/manager.
Additional Charges
Charges incurred by The Bank of New York for local taxes, stamp duties or other
local duties and assessments, stock exchange fees, postage and insurance for
shipping, extraordinary telecommunication fees or other unusual expenses which
are unique to a country in which our client is investing will be in addition to
the states fees.
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