Exhibit 8(a)
CUSTODIAN AGREEMENT
AGREEMENT, dated as of ____________________, 1986, between LAZARD
TAX-FREE RESERVES, INC., a Maryland corporation having its principal place of
business at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Fund"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts banking corporation, having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(the "Custodian").
The parties hereto agree as follows:
ARTICLE 1. EMPLOYMENT OF CUSTODIAN AND
PROPERTY TO BE HELD BY IT:
The Fund hereby employs the Custodian as the custodian of its
assets. The Fund agrees to deliver to the Custodian all securities (other than
securities issued by the Fund) and cash owned by it, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Fund from time to time, and the cash consideration
received by the Fund for shares of the Fund's Capital Stock, $0.001 par value
(the "Shares"), as may be issued or sold by the Fund from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
The Custodian may from time to time employ one or more
subcustodians, but only in accordance with an applicable resolution approved by
the Board of Directors of the Fund, and provided that the Custodian shall have
no more or less responsibility to the Fund on account of any actions or
omissions of any subcustodian so employed than any such subcustodian has to the
Custodian.
ARTICLE 2. DUTIES OF CUSTODIAN WITH RESPECT TO
PROPERTY OF FUND HELD BY CUSTODIAN
Section 2.1 Holding Securities. The Custodian shall hold and
physically segregate for the account of the Fund all non-cash property of the
Fund, including all securities owned by the Fund, other than (a) securities
issued by the Fund and (b) securities which are maintained pursuant to Section
2.12 in a clearing agency registered with the Securities and Exchange Commission
(the "SEC") under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository or in the book-entry system
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authorized by the United State Department of the Treasury and certain Federal
agencies (such clearing agency and book-entry system being collectively referred
to herein as a "Securities System").
Section 2.2 Delivery of Securities. The Custodian shall release and
deliver securities owned by the Fund which are held by the Custodian or in a
Securities System account of the Custodian only upon receipt of proper
instructions from the Fund, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(a) upon sale of such securities for the account of the Fund
and receipt of payment therefor;
(b) upon the receipt of payment in connection with any
repurchase agreement relating to such securities entered into by the
Fund;
(c) in the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.12;
(d) to a designated depository agent in connection with tender
or other similar offers for portfolio securities of the Fund;
(e) to the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided that, in
any such case, the cash or other consideration is to be delivered to the
Custodian;
(f) to the issuer thereof or its agent for transfer into the name of
the Fund or into the name of any nominee or nominees of the Custodian or
into the name or nominee name of any agent appointed pursuant to Section
2.11 or into the name or nominee name of any subcustodian appointed
pursuant to Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate face amount
or number of units; provided that, in any such case, the new securities
are to be delivered to the Custodian;
(g) to the broker selling such securities for examination in
accordance with the "street delivery" custom;
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(h) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
issuer of such securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash, if any, are
to be delivered to the Custodian;
(i) in the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary securities
for definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
(j) for delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund;
(k) for delivery as security in connection with any borrowings by
the Fund requiring a pledge or assets by the Fund, but only against
receipt of amounts borrowed;
(l) upon receipt of instructions from the transfer agent for the
Fund (the "Transfer Agent"), for delivery to the Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may be
described from time to time in the Fund's currently effective Prospectus
(the "Prospectus") included in the Fund's Registration Statement, as
amended from time to time, under the Securities Act of 1933, relating to
the offering of Shares for sale, in satisfaction of requests by holders of
Shares for repurchase or redemption; and
(m) for any other proper corporate purpose of the Fund, but only
upon receipt of, in addition to proper instructions from the Fund, a
certified copy of a resolution approved by the Fund's Board of Directors
or Executive Committee specifying the securities to the delivered, setting
forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose and naming the person or persons
to whom delivery of such securities shall be made.
Section 2.3 Registration of Securities. Securities held by the
Custodian (other than bearer
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securities) shall be registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian (which nominee shall be
assigned exclusively to the Fund, unless the Fund has authorized in writing the
appointment of a nominee to be used in common with other investment companies
registered under the Investment Company Act of 1940 (the "1940 Act") which have
the same investment adviser as the Fund) or in the name or nominee name of any
agent appointed pursuant to Section 2.11 or in the name or nominee name of any
subcustodian appointed pursuant to Article 1. All securities accepted by the
Custodian on behalf of the Fund under the terms of this Agreement shall be in
"street" or other good delivery form.
Section 2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the name of the Fund, subject only to draft
or order by the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof, all
cash received by it from or for the account of the Fund, other than cash
maintained by the Fund in a bank account established and used in accordance with
Rule 17f-3 promulgated by the SEC under the 1940 Act. Cash held by the Custodian
or in such other banks or trust companies as it may in its discretion deem
necessary or desirable, provided that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each such bank or
trust company and the funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of Directors of the Fund.
Such funds shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.
Section 2.5 Payments for Shares. The Custodian shall receive from
the distributor of Shares or from the Transfer Agent and deposit into the Fund's
account with the Custodian such payments as are received for Shares issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund and the Transfer Agent, at such times as the Fund may
request, of any receipt by the Custodian of payments for Shares.
Section 2.6 Investment and Availability of Federal Funds. Upon
mutual agreement between the Fund and the Custodian, the Custodian shall,
upon the receipt of proper instructions from the Fund,
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(a) invest all Federal funds received after a time agreed upon
between the Custodian and the Fund in such instruments as may be requested
by the Fund; and
(b) make Federal funds available to the Fund as of specified times
agreed upon from time to time by the Fund and the Custodian in the amount
of checks received in payment for Shares of the Fund which are deposited
into the Fund's account.
Section 2.7 Collection of Income. The Custodian shall collect on a
timely basis all income and other payments with respect to registered securities
held hereunder to which the Fund shall be entitled either by law or pursuant to
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income and other payments, as collected, to the
Fund's custodian account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and other income
items requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. In any case in which the
Custodian does not receive due and unpaid income with respect to securities held
hereunder within a reasonable time after the Custodian has made demands for the
same, the Custodian shall notify the Fund in writing and await instructions from
the Fund.
Section 2.8 Payment of Fund Moneys. Upon receipt of proper
instructions from the Fund, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall pay out moneys of the Fund in
the following cases only:
(a) upon the purchase of securities for the account of the Fund, but
only (i) against the delivery of such securities to the Custodian (or any
bank, banking firm or trust company doing business in the United States or
abroad which is qualified under the 1940 Act to act as a custodian and has
been designated by the Custodian as its agent for this purpose) registered
in the name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 and in proper form for transfer; (ii) in the
case of a purchase effected through a Securities Systems, in accordance
with the conditions set forth in Section 2.12 or (iii) in the case of
repurchase agreements entered into between the Fund
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and the Custodian or a dealer or another commercial bank, (A) against
delivery of the securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank of Boston
with such securities or (B) against delivery of the receipt evidencing
purchase by the Fund of securities owned by the Custodian along with
written evidence of the agreement by the Custodian to repurchase such
securities from the Fund;
(b) in connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2;
(c) for the redemption or repurchase of Shares as set forth in
Section 2.10;
(d) for the payment of any expense or liability incurred by the
Fund, including, but not limited to, the following payments for the
account of the Fund: interest, taxes, management, accounting, expenses of
the Transfer Agent, legal fees, and operating expenses of the Fund whether
or not such expenses are to be in whole or in part capitalized or treated
as deferred expenses;
(e) for the payment of any dividends or distributions declared
by the Board of Directors of the Fund;
(f) for the purpose of opening fixed time deposits as provided in
the Prospectus, but only against delivery of a non-negotiable receipt;
or
(g) for any other proper purpose, but only upon receipt of, in
addition to proper instructions from the Fund, a certified copy of a
resolution approved by the Fund's Board of Directors or Executive
Committee specifying the amount of such payments, setting forth the
purpose for which such payment is to be made, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to whom such
payment is to be made.
Section 2.9 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where payment for purchase of
securities for the account of the Fund is made by the Custodian in advance of
receipt of the securities purchased and in the absence of specific written
instructions from the Fund to so pay in advance, the Custodian shall be
absolutely liable to the Fund for such securities to the same extent as if the
securities had been
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received by the Custodian, except that in the case of repurchase agreements
entered into by the Fund with a bank which is a member of the Federal Reserve
System, the Custodian may transfer funds to the account of such bank prior to
the receipt of written evidence that the securities subject to such repurchase
agreement have been transferred by book-entry into a segregated non-proprietary
account of the Custodian maintained with the Federal Reserve Bank of Boston or
of the safekeeping receipt, provided that such securities have in fact been so
transferred by book-entry.
Section 2.10 Payments for Repurchases or Redemptions of Share of
the Fund. From such funds as may be available for the purpose but subject to the
limitations of the Fund's Articles of Incorporation and any applicable
resolutions approved by the Fund's Board of Directors or Executive Committee,
the Custodian shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares, the Custodian is
authorized, upon receipt of instructions from the Transfer Agent, to wire funds
to or through a domestic commercial bank which is a member of the Federal
Reserve System designated by the redeeming shareholder. In connection with the
redemption or repurchase of Shares, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
Section 2.11 Appointment of Agents. The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any other bank
or trust company which is itself qualified under the 1940 Act to act as a
custodian, as the Custodian's agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct, provided that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
Section 2.12 Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain securities owned by the Fund in a
Securities System in accordance with applicable rules and regulations of the
Federal Reserve Board and the SEC, subject to the following provisions:
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(a) the Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an account (the
"Account") of the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for Customers;
(b) the records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
(c) the Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account and (ii) the making
of any entry on the records of the Custodian to reflect such payment and
transfer for the account of the Fund; the Custodian shall transfer
securities sold from the account of the Fund upon (i) receipt of advice
from the Securities System that payment for such securities has been
transferred to the Account and (ii) the making of an entry on the records
of the Custodian to reflect such transfer and payment for the account of
the Fund; copies of all notices from the Securities System of transfers of
securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the Fund at
its request; and the Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund on the next business day
copies of daily transaction sheets reflecting each day's transactions in
the Securities System for the account of the Fund;
(d) the Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in
the Securities System;
(e) the Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9; and
(f) anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the Fund
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian
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or any of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such rights as
it may have against the Securities System; and, at the election of the
Fund, it shall be entitled to be subrogated to the rights of the Custodian
with respect to any clam against the Securities System or any other person
which the Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for any such
loss or damage.
Section 2.13 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits for all Federal
and state tax purposes in connection with the receipt of income or other
payments with respect to securities of the Fund held by it and in connection
with transfers or securities.
Section 2.14 Proxies. The Custodian shall, with respect to the
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Fund or a nominee of the Fund, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly deliver
to the Fund such proxies, all proxy soliciting materials and all notices
relating to such securities.
Section 2.15 Communications Relating to Fund Portfolio Securities.
The Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith) received by the Custodian
from issuers of the securities being held for the Fund. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the Fund all
written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Fund shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
Section 2.16 Proper Instructions. The term "proper instructions", as
used throughout this Article 2, means a writing signed or initialled by one or
more persons as the Board of Directors of the Fund shall have from time to time
authorized. Each such writing shall set forth the
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specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered "proper instructions" if the Custodian reasonably believes
them to have been given by a person authorized by the Board of Directors of the
Fund to give such instructions with respect to the transaction involved. The
Fund shall cause all oral instructions to be confirmed in writing. Upon receipt
of a certificate of the Secretary or an Assistant Secretary of the Fund as to
the authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, "proper
instructions" may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Directors of
the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets.
Section 2.17 Actions Permitted without Express Authority. The
Custodian may in its discretion, without express authority from the Fund:
(a) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to the
Fund;
(b) surrender securities in temporary form for securities in
definitive form;
(c) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
(d) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund except as
otherwise directed by the Board of Directors of the Fund.
Section 2.18. Evidence of Authority. The Custodian shall be
protected in acting upon any instructions, notice, request, consent, certificate
or other instrument or paper believed by it in good faith to be genuine and to
have been properly executed by or on behalf of the Fund. The Custodian may
receive and accept a certified copy of a resolution approved by the Fund's Board
of Directors or Executive Committee as conclusive evidence (a) of the authority
of any person to act in accordance with such
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resolution or (b) of any determination or of any action by the Fund's Board of
Directors or Executive Committee pursuant to the Fund's Articles of
Incorporation and By-laws as described in such resolution, and such resolution
may be considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
ARTICLE 3. DUTIES OF CUSTODIAN WITH RESPECT TO
THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INVESTMENT INCOME
The Custodian shall cooperate with and supply necessary information
to the entity or entities appointed by the Board of Directors of the Fund to
keep the books of account of the Fund and compute the net asset value per share
of the outstanding Shares or, if directed in writing to do so by the Fund, shall
itself keep such books of account and compute such net asset value per share. If
so directed, the Custodian shall also calculate daily the net investment income
of the Fund as described in the Prospectus and shall advise the Fund and the
Transfer Agent daily of the total amounts of such net investment income and, if
instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net investment income among
its various components. The calculations of the net asset value per share and
the daily net investment income of the Fund shall be made at the time or times
described in the Prospectus.
ARTICLE 4. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the 1940 Act, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 promulgated by the SEC thereunder,
applicable Federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be the
property of the Fund and shall at all times during the regular business hours of
the Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
such times as the Fund may request, supply the Fund with a tabulation of
securities owned by the Fund and held by the Custodian and shall, when requested
to do so by the Fund and for such compensation as shall be agreed upon
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between the Fund and the Custodian, include certificate numbers in such
tabulations.
ARTICLE 5. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANT
The Custodian shall take all reasonable action as the Fund may from
time to time request to obtain from year to year favorable opinions from the
Fund's independent public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1 and Form
N-1R and other annual reports for filing with the SEC and with respect to any
other requirements of the SEC.
ARTICLE 6. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, as such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Agreement.
The reports shall be of sufficient scope and in sufficient detail as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by the examination conducted by the
accountants, and, if there are no inadequacies, shall so state.
ARTICLE 7. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
ARTICLE 8. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title, validity
or genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
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The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of the Agreement, but shall be indemnified by and shall be
without liability to the Fund for any action in connection with the transactions
contemplated hereby taken or omitted by it in good faith and without negligence.
The Custodian shall be entitled to rely on and may act upon advice or counsel
(who may be counsel for the Fund) on all matters, and shall be without liability
for any action reasonably taken or omitted pursuant to such advice, provided
that such action is not in violation of applicable Federal or state laws or
regulations. Notwithstanding the foregoing, the responsibility of the Custodian
with respect to redemption effected pursuant to the check redemption service
described in the Prospectus shall be in accordance with a separate agreement
entered into between the Custodian and the Fund.
In order that the indemnification provision contained in this
Article 8 shall apply, it is understood that if in any case the Fund may be
asked to indemnify or save the Custodian harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Custodian will use all reasonable care to
identify and notify the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for indemnification
against the Fund. The Fund shall have the option to defend the Custodian against
any claim which may be the subject of this indemnification and, in the event
that the Fund so elects, it will so notify the Custodian and thereupon the Fund
shall take over complete defense of the claim and the Custodian shall in such
situation incur no further legal or other expenses for which it shall seek
indemnification under this Article 8. The Custodian shall in no case confess any
claim or make any compromise or settlement in any case in which the Fund will be
asked to indemnify the Custodian, except with the Fund's prior written consent.
If the Fund requires the Custodian to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Custodian, result in the Custodian or its nominee assigned
to the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
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ARTICLE 9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
The Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
delivered or mailed, postage prepaid to the other party, such termination to
take effect not sooner than 30 days after the date of such delivery or mailing
provided that the Custodian shall not act under Section 2.12 in the absence of
receipt of an initial certificate of the Secretary or an Assistant Secretary of
the Fund that the Board of Directors of the Fund has approved the initial use of
a particular Securities System and the receipt annually thereafter of a
certificate of the Secretary or an Assistant Secretary of the Fund that the
Board of Directors of the Fund has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 promulgated by the SEC
under the 1940 Act, provided further that the Fund shall not amend or terminate
this Agreement in contravention of any applicable Federal or state regulations,
or any provision of the Fund's Articles of Incorporation, and provided further
that the Fund may at any time by action of its Board of Directors (a) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (b) immediately terminate this Agreement in the event
of the appointment of a conservator or receiver for the Custodian by the United
State Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of this Agreement, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and disbursements
hereunder.
ARTICLE 10. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of
Directors of the Fund, the Custodian shall, upon termination, deliver to such
successor at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a cer-
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tified copy of a resolution approved by the Fund's Board of Directors or
Executive Committee, deliver at the office of the Custodian such securities,
funds and other properties in accordance with such resolution.
In the event that no written order designating a successor custodian
or certified copy of a resolution approved by the Fund's Board of Directors or
Executive Committee shall have been delivered to the Custodian on or before the
date when termination of this Agreement shall become effective, then the
Custodian shall have the right to deliver to a bank or trust company of its own
selection, which is a "bank" as defined in the 1940 Act, doing business in
Boston, Massachusetts, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than $25,000,000,
all securities, funds and other properties held by the Custodian and all
instruments held by the Custodian relative thereto and all other property held
by it under this Agreement. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in
the possession of the Custodian after failure of the Fund to procure the
certified copy of resolution referred to or of the Board of Director to appoint
a successor custodian, the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall remain in full
force and effect.
ARTICLE 11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian
and the Fund may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provision shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable Federal or state regulations or any provision of
the Articles of Incorporation or By-laws of the Fund. No interpretive or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
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ARTICLE 12. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the Laws of Massachusetts.
ARTICLE 13. PERSONAL LIABILITY
It is understood and expressly stipulated that neither the holders
of Shares nor directors of the Fund shall be personally liable hereunder.
ARTICLE 14. PRIOR CONTRACTS
This Agreement supersedes and terminates, as of the date hereof, all
prior agreements between the Fund and Custodian relating to the custody of the
Fund's assets.
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative as
of the date first above written.
LAZARD TAX-FREE RESERVES, INC.
By_____________________________
President
STATE STREET BANK AND TRUST COMPANY
By______________________________
Vice President
