Exhibit (g)(3)
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of January 17, 2002, by
and between Each of the Parties Indicated on Appendix A (the "Funds") and State
Street Bank and Trust Company (the "Custodian"). This Amendment shall only apply
to the Funds listed on Schedule 1 (each, a "Fund"), as amended from time to
time, attached to this Amendment. Capitalized terms used in this Amendment
without definition shall have the respective meanings given to such terms in the
Custodian Contract referred to below.
WHEREAS, Each of the Parties Indicated on Appendix A and the Custodian have
entered into a Custodian Contract (the "Contract"); and
WHEREAS, each Fund listed on Schedule 1 attached hereto and the Custodian
desire to amend certain provisions of the Contract to provide for the custody
and handling of interests in Loans (as defined below).
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereby agree as follows:
I. New Section 20 is hereby added to the Contract, as of the effective date of
this Amendment, as set forth below.
SECTION 20. SPECIAL PROVISIONS REGARDING INTERESTS IN LOANS.
The following provisions shall apply with respect to investments, property
or assets in the nature of loans, or interests or participations in loans,
including without limitation interests in syndicated bank loans and bank loan
participations (collectively, "Loans").
SECTION 20.1 SAFEKEEPING. Instruments, certificates, agreements and/or
other documents which the Custodian may receive in respect of Loans, if any
(collectively "Financing Documents"), from time to time, shall be held by the
Custodian at its offices in Boston, Massachusetts.
SECTION 20.2 DUTIES OF THE CUSTODIAN.
1) The Custodian shall accept such Financing Documents, if any, in
respect of Loans as may be delivered to it from time to time by a
Fund. The Custodian shall be under no obligation to examine the
contents or determine the sufficiency of any such Financing Documents
or to provide any certification with respect thereto, whether received
by the Custodian as original documents, photocopies, by facsimile or
otherwise. Without limiting the foregoing, the Custodian is under no
duty to examine any such Financing Documents to determine whether
necessary steps have been
taken or requirements met in respect of the assignment or transfer of
the related Loan or applicable interest or participation therein. The
Custodian shall be entitled to assume the genuineness, sufficiency and
completeness of any Financing Documents received, and the genuineness
and due authority of any signature appearing thereon.
2) Notwithstanding any term of this Contract to the contrary, with
respect to any Loans, (i) the Custodian shall be under no obligation
to determine, and shall have no liability for, the sufficiency of, or
to require delivery of, any instrument, document or agreement
constituting, evidencing or representing such Loan, other than to
receive such Financing Documents, if any, as may be delivered or
caused to be delivered to it by the Fund (or its investment manager or
investment adviser (the "Adviser") on its behalf), (ii) without
limiting the generality of the foregoing, delivery of any such Loan
(including without limitation, for purposes of Section 2.7 above) may
be made to the Custodian by, and may be represented solely by,
delivery to the Custodian of a facsimile or photocopy of an assignment
agreement (an "Assignment Agreement") or a confirmation or
certification from the Fund (or the Adviser) to the effect that it has
acquired such Loan and/or has received or will receive , and will
deliver to the Custodian, appropriate Financing Documents
constituting, evidencing or representing such Loan (such confirmation
or certification, together with any Assignment Agreement,
collectively, an "Assignment Agreement or Confirmation"), in any case
without delivery of any promissory note, participation certificate or
similar instrument (collectively, an "Instrument"), (iii) if an
original Instrument shall be or shall become available with respect to
any such Loan, it shall be the sole responsibility of the Fund (or the
Adviser acting on its behalf) to make or cause delivery thereof to the
Custodian, and the Custodian shall be under no obligation at any time
or times to determine whether any such original Instrument has been
issued or made available with respect to such Loan, and shall not be
under any obligation to compel compliance by the Fund to make or cause
delivery of such Instrument to the Custodian, and (iv) any reference
to Financing Documents appearing in Section 20.3(a) shall be deemed to
include, without limitation, any such Instrument and/or Assignment
Agreement or Confirmation.
3) If payments with respect to a Loan ("Loan Payment") are not received
by the Custodian on the date on which they are due, as reflected in
the Payment Schedule (as such term is defined in Section 20.3 below)
of the Loan ("Payment Date"), or in the case of interest payments, not
received either on a scheduled interest payable date, as reported to
the Custodian by the Fund (or the Adviser, on its behalf) for the Loan
(the "Interest Payable Date"), or in the amount of their accrued
interest payable, the Custodian shall promptly, but in no event later
than one business day after the Payment Date or the Interest Payable
Date, give telephonic notice to the party obligated under the
Financing Documents to make such Loan
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Payment (the "Obligor") of its failure to make timely payment, and (2)
if such payment is not received within three business days of its due
date, shall notify the Fund (or the Adviser on its behalf) of such
Obligor's failure to make the Loan Payment. The Custodian shall have
no responsibility with respect to the collection of Loan Payments
which are past due, other than the duty to notify the Obligor and the
Fund (or the Adviser on its behalf) as provided herein.
4) The Custodian shall have no responsibilities or duties whatsoever
under this Contract, with respect to Loans or the Financing Documents,
except for such responsibilities as are expressly set forth herein.
Without limiting the generality of the foregoing, the Custodian shall
have no obligation to preserve any rights against prior parties or to
exercise any right or perform any obligation in connection with the
Loans or any Financing Documents (including, without limitation, no
obligation to take any action in respect of or upon receipt of any
consent solicitation, notice of default or similar notice received
from any bank agent or Obligor, except that the Custodian shall
undertake reasonable efforts to forward any such notice to the Fund or
the Adviser). In case any question arises as to its duties hereunder,
the Custodian may request instructions from the Fund and shall be
entitled at all times to refrain from taking any action unless it has
received Proper Instructions from the Fund or the Adviser and the
Custodian shall in all events have no liability, risk or cost for any
action taken, with respect to a Loan, pursuant to and in compliance
with the Proper Instructions of such parties.
5) The Custodian shall be only responsible and accountable for Loan
Payments actually received by it and identified as for the account of
the Fund; any and all credits and payments credited to the Fund, with
respect to Loans, shall be conditional upon clearance and actual
receipt by the Custodian of final payment thereon.
6) The Custodian shall promptly, upon the Fund's request, release to the
Fund's Adviser or to any party as the Fund or the Adviser may specify,
any Financing Documents being held on behalf of the Fund. Without
limiting the foregoing, the Custodian shall not be deemed to have or
be charged with knowledge of the sale of any Loan, unless and except
to the extent it shall have received written notice and instruction
from the Fund (or the Adviser on its behalf) with respect thereto, and
except to the extent it shall have received the sale proceeds thereof.
7) In no event shall the Custodian be under any obligation or liability
to make any advance of its own funds in respect of any Loan.
SECTION 20.3 RESPONSIBILITY OF THE FUND. With respect to each Loan held by
the Custodian hereunder in accordance with the provisions hereof, the Fund shall
(a) cause the Financing Documents evidencing such Loan to be delivered to the
Custodian;
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(b) include with such Financing Documents an amortization schedule of
payments (the "Payment Schedule") identifying the amount and due dates of
scheduled principal payments, the Interest Payable Date(s) and related payment
amount information, and such other information with respect to the related Loan
and Financing Documents as the Custodian reasonably may require in order to
perform its services hereunder (collectively, "Loan Information"), in such form
and format as the Custodian reasonably may require; (c) take, or cause the
Adviser to take, all actions necessary to acquire good title to such Loan (or
the participation therein, as the case may be), as and to the extent intended to
be acquired; and (d) cause the Custodian to be named as its nominee for payment
purposes under the Financing Documents or otherwise provide for the direct
payment of the Payments to the Custodian. The Custodian shall be entitled to
rely upon the Loan Information provided to it by the Fund (or the Adviser on its
behalf) without any obligation on the part of the Custodian independently to
verify, investigate, recalculate, update or otherwise confirm the accuracy or
completeness thereof; and the Custodian shall have no liability for any delay or
failure on the part of the Fund in providing necessary Loan Information to the
Custodian, or for any inaccuracy therein or incompleteness thereof. With respect
to each such Loan, the Custodian shall be entitled to rely on any information
and notices it may receive from time to time from the related bank agent,
Obligor or similar party with respect to the related Loan, and shall be entitled
to update its records on the basis of such information or notices received,
without any obligation on its part independently to verify, investigate or
recalculate such information.
SECTION 20.4 INSTRUCTIONS; AUTHORITY TO ACT. The certificate of the
Secretary or an Assistant Secretary of the Trust, identifying certain
individuals to be officers of the Trust or employees of the Adviser of the Fund
authorized to sign any such instructions, may be received and accepted as
conclusive evidence of the incumbency and authority of such to act and may be
considered by the Custodian to be in full force and effect until it receives
written notice to the contrary from the Secretary or Assistant Secretary of the
Trust. Notwithstanding any other provision of this Contract, the Custodian shall
have no responsibility to ensure that any investment by the Trust or any Fund
with respect to Loans has been authorized.
SECTION 20.5 ATTACHMENT. In case any portion of the Loans or the Financing
Documents shall be attached or levied upon pursuant to an order of court, or the
delivery or disbursement thereof shall be stayed or enjoined by an order of
court, or any other order, judgment or decree shall be made or entered by any
court affecting the property of the Fund or any act of the Custodian relating
thereto, the Custodian is hereby expressly authorized in its sole discretion to
obey and comply with all orders, judgments or decrees so entered or issued,
without the necessity of inquire whether such court had jurisdiction, and, in
case the Custodian obeys or complied with any such order, judgment or decree, it
shall not be liable to anyone by reason of such compliance.
SECTION 20.6 PAYMENT OF FUND MONIES. Notwithstanding Section 2.7 and
Section 2.8 of the Custodian Contract, upon receipt of Proper Instructions (as
defined in the Custodian Contract), the Custodian shall deliver cash and/or
other assets of the Fund upon purchase of Loans to parties identified in such
Proper Instructions, which delivery
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may be made without contemporaneous receipt by the Custodian of cash or other
assets, including Financing Documents, in exchange therefor. Upon such delivery
of cash or other assets in accordance with such Proper Instructions, the
Custodian shall have no further responsibility or obligation to the Fund as a
custodian of the Fund with respect to the cash or assets so delivered. In
preparing reports of monies received by or paid out of the Fund or of assets
comprising the Fund, the Custodian shall be entitled to rely upon information
received from time to time regarding the Loans or Loan Payments and shall not be
responsible for the accuracy or completeness of such information included in the
Custodian's reports until such assets are received by the Custodian.
II. Except as specifically superseded or modified hereby, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed
in its name and behalf by its duly authorized representative as of the date
first above written.
WITNESSED BY: STATE STREET BANK and TRUST COMPANY
/s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
WITNESSED BY: EACH OF THE INVESTMENT COMPANIES
LISTED ON SCHEDULE I ATTACHED
/s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxx
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Name: Xxxxxxxx X. Xxxxx Name: Xxxx X. Xxxx
Title: Secretary of certain Title: Vice President
of the Prudential
mutual funds.
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SCHEDULE 1
to
Amendment to Custodian Contract
Dated January 17, 2002
PRUDENTIAL HIGH YIELD FUND, INC.
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