AGREEMENT BETWEEN
XXXXX BROTHERS XXXXXXXX & CO.
AND
PIONEER HIGH YIELD FUND
TABLE OF CONTENTS
1. Employment of Custodian 1
2. Powers and Duties of the Custodian with
respect to Property of the
Fund held by the Custodian 1
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 3
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 6
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 7
L. Demand Deposit Bank Accounts 7
M. Interest Bearing Call or Time Deposits 8
N. Foreign Exchange Transactions
and Futures Contracts 9
O. Stock Loans 10
P. Collections 10
Q. Dividends, Distributions and Redemptions 11
R. Proxies, Notices, Etc. 12
S. Nondiscretionary Details 12
T. Bills 12
U. Deposit of Fund Assets in Securities Systems 13
V. Other Transfers 15
W. Investment Limitations 15
X. Proper Instructions 16
Y. Segregated Account 17
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 18
4. Assistance by the Custodian as to Certain Matters 22
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent 22
A. Records 22
B. Accounts 23
C. Access to Records 23
D. Disbursements 23
6. Standard of Care and Related Matters 23
A. Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 23
B. Liability of the Custodian with
Respect to Use of Securities System 25
C. Liability of the Custodian with
respect to Subcustodians 25
D. Standard of Care; Liability;
Indemnification 26
E. Reimbursement of Advances 27
F. Security for Obligations to Custodian 28
G. Appointment of Agents 28
X. Xxxxxx of Attorney 29
7. Compensation of the Custodian 29
8. Termination; Successor Custodian 29
9. Amendment 30
10. Governing Law 30
11. Notices 31
12. Binding Effect 31
13. Counterparts 31
CUSTODIAN AGREEMENT
AGREEMENT made this ________________________, 2000, between PIONEER
HIGH YIELD FUND (herein referred to as the "Fund") and Xxxxx Brothers Xxxxxxxx
& Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. POWERS AND DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
FUND HELD BY THE CUSTODIAN: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
appointed pursuant to the provisions of Section 3 hereof, the Custodian shall
have and perform the following powers and duties:
1
A. SAFEKEEPING - To keep safely the securities and other assets of
the Fund that have been delivered to the Custodian and, on behalf of the Fund,
from time to time to receive delivery of securities for safekeeping.
B. MANNER OF HOLDING SECURITIES - To hold securities of the Fund (1)
by physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in book-entry
form by a Securities System (as said term is defined in Section 2U).
C. REGISTERED NAME; NOMINEE - To hold registered securities of the
Fund (1) in the name or any nominee name of the Custodian or the Fund, or in the
name or any nominee name of any Agent appointed pursuant to Section 6F, or (2)
in street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets held
as fiduciary or custodian for customers.
D. PURCHASES - Upon receipt of Proper Instructions, as defined in
Section X on Page 17, insofar as funds are available for the purpose, to pay for
and receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, or (3) by a Securities System. However, (i) in the case of repurchase
agreements entered into by the Fund, the Custodian (as well as an Agent) may
release funds to a Securities System or to a
2
Subcustodian prior to the receipt of advice from the Securities System or
Subcustodian that the securities underlying such repurchase agreement have been
transferred by book entry into the Account (as defined in Section 2U) of the
Custodian (or such Agent) maintained with such Securities System or
Subcustodian, so long as such payment instructions to the Securities System or
Subcustodian include a requirement that delivery is only against payment for
securities, (ii) in the case of foreign exchange contracts, options, time
deposits, call account deposits, currency deposits, and other deposits,
contracts or options pursuant to Sections 2J, 2L, 2M and 2N, the Custodian may
make payment therefor without receiving an instrument evidencing said deposit,
contract or option so long as such payment instructions detail specific
securities to be acquired, and (iii) in the case of securities in which payment
for the security and receipt of the instrument evidencing the security are under
generally accepted trade practice or the terms of the instrument representing
the security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. EXCHANGES - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization,
3
split-up of shares, change of par value, conversion or other event relating
to the securities or the issuer of such securities and to deposit any such
securities in accordance with the terms of any reorganization or protective
plan. Without proper instructions, the Custodian may surrender securities in
temporary form for definitive securities, may surrender securities for transfer
into a name or nominee name as permitted in Section 2C, and may surrender
securities for a different number of certificates or instruments representing
the same number of shares or same principal amount of indebtedness, provided the
securities to be issued are to be delivered to the Custodian, and further
provided the Custodian shall at the time of surrendering securities or
instruments receive a receipt or other evidence of ownership thereof.
F. SALES OF SECURITIES - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank
cashier's check, bank credit, or bank wire transfer, or (2) by credit to the
account of the Custodian with a clearing corporation of a national securities
exchange of which the Custodian is a member, or (3) by credit to the account
of the Custodian or an Agent of the Custodian with a Securities System;
PROVIDED, HOWEVER, that (i) in the case of delivery of physical certificates
or instruments representing securities, the Custodian may make delivery to the
broker buying the securities, against receipt therefor, for examination in
4
accordance with "street delivery" custom, provided that the payment therefor
is to be made to the Custodian (which payment may be made by a broker's check)
or that such securities are to be returned to the Custodian, and (ii) in the
case of securities referred to in clause (iii) of the last sentence of Section
2D, the Custodian may make settlement, including with respect to the form of
payment, in accordance with generally accepted trade practice relating to such
securities or the terms of the instrument representing said security.
G. DEPOSITARY RECEIPTS - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged
5
receipt of instructions to cause its depositary to deliver the securities
underlying such ADRs to a Subcustodian or an Agent.
H. EXERCISE OF RIGHTS; TENDER OFFERS - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. STOCK DIVIDENDS, RIGHTS, ETC. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. OPTIONS - Upon receipt of proper instructions, to receive and
retain confirmations or other documents evidencing the purchase or writing of an
option on a security or securities index by the Fund; to deposit and maintain in
a segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with the
provisions of any agreement among the Fund, the Custodian and; and to pay,
release and/or transfer such securities, cash or other assets in
6
accordance with a broker-dealer relating to such securities or other assets
a notice or other communication evidencing the expiration, termination or
exercise of such covered option furnished by The Options Clearing Corporation,
the securities or options exchange on which such covered option is traded or
such other organization as may be responsible for handling such options
transactions.
K. BORROWINGS - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
L. DEMAND DEPOSIT BANK ACCOUNTS - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) (hereinafter collectively referred
to as "demand deposit bank accounts")
7
shall be in the name of the Custodian for account of the Fund and subject
only to the Custodian's draft or order. Such demand deposit accounts may be
opened with Banking Institutions in the United States and in other countries and
may be denominated in either U. S. Dollars or other currencies as the Fund may
determine. All such deposits shall be deemed to be portfolio securities of the
Fund and accordingly the responsibility of the Custodian therefore shall be the
same as and no greater than the Custodian's responsibility in respect of other
portfolio securities of the Fund.
M. INTEREST BEARING CALL OR TIME DEPOSITS - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records with respect
to the assets of the Fund appropriate notation as to the amount and currency of
each such deposit, the accepting Banking Institution and other appropriate
details, and shall retain such forms of advice or receipt evidencing the
deposit, if any, as may be forwarded to the Custodian by the Banking
Institution. Such deposits, other than those placed with the Custodian, shall be
deemed portfolio securities of the Fund and the responsibilities of the
Custodian
8
therefor shall be the same as those for demand deposit bank accounts
placed with other banks, as described in Section L of this Agreement. The
responsibility of the Custodian for such deposits accepted on the Custodian's
books shall be that of a U.S. bank for a similar deposit.
N. FOREIGN EXCHANGE TRANSACTIONS AND FUTURES CONTRACTS - Pursuant to
proper instructions, to enter into foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be undertaken by the
Custodian with such Banking Institutions, including the Custodian and
Subcustodian(s) as principals, as approved and authorized by the Fund. Foreign
exchange contracts and options other than those executed with the Custodian,
shall be deemed to be portfolio securities of the Fund and the responsibilities
of the Custodian therefor shall be the same as those for demand deposit bank
accounts placed with other banks as described in Section 2L of this agreement.
Upon receipt of proper instructions, to receive and retain confirmations
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Fund; to deposit and maintain in a segregated account, for the
benefit of any futures commission merchant or to pay to such futures commission
merchant, assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contracts purchased or sold or any options on futures
contracts written by the Fund,
9
in accordance with the provisions of any agreement or agreements among any
of the Fund, the Custodian and such futures commission merchant, designated to
comply with the rules of the Commodity Futures Trading Commission and/or any
contract market, or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such margin accounts
only in accordance with any such agreements or rules.
0. STOCK LOANS - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to the Securities System require that the Securities
System may deliver the securities to the borrower thereof only upon receipt of
the collateral for such borrowing.
P. COLLECTIONS - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; PROVIDED, THAT the payment is to be made in such form and manner
and at such time, which may be after delivery by the Custodian of the instrument
10
representing the security, as is in accordance with the terms of the instrument
representing the security, or such proper instructions as the Custodian may
receive, or governmental regulations, the rules of Securities Systems or other
U.S. securities depositories and clearing agencies or, with respect to
securities referred to in clause (iii) of the last sentence of Section 2D, in
accordance with generally accepted trade practice; (ii) to execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with respect to securities
of the Fund or in connection with transfer of securities, and (iii) pursuant to
proper instructions to take such other actions with respect to collection or
receipt of funds or transfer of securities which involve an investment decision.
Q. DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent
11
as the Fund shall have authorized), the Custodian shall release funds or
securities, insofar as available, to the Shareholder Servicing Agent or as such
Agent shall otherwise instruct for payment to Fund shareholders who have
delivered to such Agent a request for repurchase or redemption of their shares
of capital stock of the Fund.
R. PROXIES, NOTICES, ETC. - Promptly to deliver or mail to the Fund
all forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
S. NONDISCRETIONARY DETAILS - Without the necessity of express
authorization from the Fund, to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund.
T. BILLS - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose,
12
bills, statements, or other obligations of the Fund.
U. DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
13
2) 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;
3) 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 an 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 for 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 advices 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 or an Agent as referred to
above, and be provided to the Fund at its request. 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 copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by
the Custodian or any Agent as referred to above on
14
the Securities System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities System; and
the Custodian and such Agents shall send to the Fund such reports on their own
systems of internal accounting control as the Fund may reasonably request from
time to time.
5) At the written request of the Fund, the Custodian will terminate
the use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. OTHER TRANSFERS - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. INVESTMENT LIMITATIONS - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for the Fund, the Custodian may assume unless and until
notified in writing to the contrary that proper instructions received by it are
not in conflict with or in any way contrary to any provisions of the Fund's
Declaration of Trust or Certificate of Incorporation or
15
By-Laws (or comparable documents) or votes or proceedings of the
shareholders or Directors of the Fund. The Custodian shall in no event be liable
to the Fund and shall be indemnified by the Fund for any violation which occurs
in the course of carrying out instructions given by the Fund of any investment
limitations to which the Fund is subject or other limitations with respect to
the Fund's powers to make expenditures, encumber securities, borrow or take
similar actions affecting the Fund.
X. PROPER INSTRUCTIONS - Proper instructions shall mean a tested
telex from the Fund or a written request, direction, instruction or
certification signed or initialled on behalf of the Fund by one or more person
or persons as the Board of Directors or Trustees of the Fund shall have from
time to time authorized, provided, however, that no such instructions directing
the delivery of securities or the payment of funds to an authorized signatory of
the Fund shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Directors or Trustees by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions given by any one of
the above persons will be considered proper instructions if the Custodian
reasonably believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in
16
the manner set forth above but the lack of such confirmation shall in no
way affect any action taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian by or on behalf of
the Fund (including any of its officers, Directors, Trustees, employees or
agents) and will deliver to the Custodian a similar authorization from any
investment manager or adviser or person or entity with similar reponsibilities
which is authorized to give proper instructions on behalf of the Fund to the
Custodian. Proper instructions may relate to specific transactions or to types
or classes of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of such
device or system.
Y. SEGREGATED ACCOUNT - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2U hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers,
17
Inc. (or any futures commission merchant registered under the Commodity
Exchange Act) relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract market), or any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. POWERS AND DUTIES OF THE CUSTODIAN WITH RESPECT TO THE APPOINTMENT
OF SUBCUSTODIANS: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United
18
States, the country or countries in which the Subcustodian is authorized to
hold securities, cash and other property of the Fund. The Fund hereby further
authorizes and instructs the Custodian and any Subcustodian to utilize such
securities depositories located outside the United States which are approved in
writing by the Fund to hold securities, cash and other property of the Fund.
Upon such approval by the Fund, the Custodian is authorized on behalf of the
Fund to notify each Subcustodian of its appointment as such. The Custodian may,
at any time in its discretion, remove any Subcustodian that has been appointed
as such but will promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or securities depositories are changed,
added or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
for the Fund to give the approval required by the preceding paragraph and for
the Custodian to put the appropriate arrangements in place with such
Subcustodian, including negotiation of a subcustodian agreement and submission
19
of such subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
In the event that any Subcustodian appointed pursuant to the
provisions of this Section 3 fails to perform any of its obligations under the
terms and conditions of the applicable subcustodian agreement, the Custodian
shall use its best efforts
20
to cause such Subcustodian to perform such obligations. In the event that
the Custodian is unable to cause such Subcustodian to perform fully its
obligations thereunder, the Custodian shall forthwith upon the Fund's request
terminate such Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement and, if necessary or desirable, appoint
another subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's
21
Board of Directors or Trustees in accordance with the provisions of this
Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. ASSISTANCE BY THE CUSTODIAN AS TO CERTAIN MATTERS: The Custodian
may assist generally in the preparation of reports to Fund shareholders and
others, audits of accounts, and other ministerial matters of like nature.
5. POWERS AND DUTIES OF THE CUSTODIAN WITH RESPECT TO ITS ROLE AS
FINANCIAL AGENT: The Fund hereby also appoints the Custodian as the Funds
financial agent. With respect to the appointment as financial agent, the
Custodian shall have and perform the following powers and duties:
A. RECORDS - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination
22
of this Agreement shall be delivered to the successor custodian.
B. ACCOUNTS - To keep books of account and render statements,
including interim monthly and complete quarterly financial statements, or copies
thereof, from time to time as reasonably requested by proper instructions.
C. ACCESS TO RECORDS - The books and records maintained by the
Custodian pursuant to Sections 5A and 5B shall at all times during the
Custodian's regular business hours be open to inspection and audit by officers
of, attorneys for and auditors employed by the Fund and by employees and
agents of the Securities and Exchange Commission, provided that all such
individuals shall observe all security requirements of the Custodian
applicable to its own employees having access to similar records within the
Custodian and such regulations as may be reasonably imposed by the Custodian.
D. DISBURSEMENTS - Upon receipt of proper instructions, to pay or
cause to be paid, insofar as funds are available for the purpose, bills,
statements and other obligations of the Fund (including but not limited to
interest charges, taxes, management fees, compensation to Fund officers and
employees, and other operating expenses of the Fund).
6. STANDARD OF CARE AND RELATED MATTERS:
A. LIABILITY OF THE CUSTODIAN WITH RESPECT TO PROPER
INSTRUCTIONS; EVIDENCE OF AUTHORITY, ETC. The Custodian shall not be
liable for any action taken or omitted in reliance upon proper instructions
believed by it to be genuine or upon any
23
other written notice, request, direction, instruction, certificate or other
instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
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.
The Custodian shall be entitled, at the expense of the Fund, to
receive and act upon advice of (i) counsel regularly retained by the Custodian
in respect of custodian matters, (ii) counsel for the Fund, or (iii) such other
counsel as the Fund and the Custodian may agree upon, with respect to all
matters, and the Custodian shall be without liability for any action
reasonably
24
taken or omitted pursuant to such advice.
B. LIABILITY OF THE CUSTODIAN WITH RESPECT TO USE OF SECURITIES
SYSTEM - With respect to the portfolio securities, cash and other property of
the Fund held by a Securities System, the Custodian shall be liable to the Fund
only for any loss or damage to the Fund resulting from use of the Securities
System if caused by any negligence, misfeasance or misconduct of the Custodian
or any of its agents or of any of its or their employees or from any failure of
the Custodian or any such agent to enforce effectively such rights as it may
have against the Securities System. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage to the Fund if and to the
extent that the Fund has not been made whole for any such loss or damage.
C. LIABILITY OF THE CUSTODIAN WITH RESPECT TO SUBCUSTODIANS The
Custodian shall be liable to the Fund for any loss or damage to the Fund caused
by or resulting from the acts or omissions of any Subcustodian to the extent
that under the terms set forth in the subcustodian agreement between the
Custodian and the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary
Subcustodian) has failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement as determined in accordance with the
law
25
which is adjudicated to govern such agreement and in accordance with any
determination of any court as to the duties of said Subcustodian pursuant to
said agreement. The Custodian shall also be liable to the Fund for its own
negligence in transmitting any instructions received by it from the Fund and for
its own negligence in connection with the delivery of any securities or funds
held by it to any Subcustodian.
D. STANDARD OF CARE; LIABILITY; INDEMNIFICATION - The Custodian shall
be held only to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, provided that the Custodian shall not thereby
be required to take any action which is in contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from all claims and liabilities (including counsel fees) incurred or assessed
against it or its nominees in connection with the performance of this Agreement,
except such as may arise from its or its nominee's breach of the relevant
standard of conduct set forth in this Agreement. Without limiting the foregoing
indemnification obligation of the Fund, the Fund agrees to indemnify the
Custodian and any nominee in whose name portfolio securities or other property
of the Fund is registered against any liability the Custodian or such nominee
may incur by reason of taxes assessed to the Custodian or such nominee or other
costs, liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund is registered
26
in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any
loss involving any securities, currencies, deposits or other property of the
Fund, whether maintained by it, a Subcustodian, a securities depository, an
agent of the Custodian or a Subcustodian, a Securities System, or a Banking
Institution, or for any loss arising from a foreign currency transaction or
contract, where the loss results from a Sovereign Risk or where the entity
maintaining such securities, currencies, deposits or other property of the Fund,
whether the Custodian, a Subcustodian, a securities depository, an agent of the
Custodian or a Subcustodian, a Securities System or a Banking Institution, has
exercised reasonable care maintaining such property or in connection with the
transaction involving such property. A "Sovereign Risk" shall mean
nationalization, expropriation, devaluation, revaluation, confiscation, seizure,
cancellation, destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or enforcement by any
such governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. REIMBURSEMENT OF ADVANCES - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements,
27
expenses and charges (including the fees and expenses of any Subcustodian
or any Agent) in connection with this Agreement, but excluding salaries and
usual overhead expenses.
F. SECURITY FOR OBLIGATIONS TO CUSTODIAN - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's property,
including securities, to the extent necessary to obtain reimbursement or
indemnification.
G. 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 as its agent (an "Agent") to carry out such of the
provisions of this Agreement as the Custodian may from time to time direct,
provided, however, that the appointment of such Agent (other than an Agent
appointed pursuant to the
28
third paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this agreement.
X. XXXXXX OF ATTORNEY - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by the
Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
7. COMPENSATION OF THE CUSTODIAN: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6E, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
8. TERMINATION; SUCCESSOR CUSTODIAN: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6E and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
29
In the event of the appointment of a successor custodian, it is
agreed that the funds and securities owned by the Fund and held by the Custodian
or any Subcustodian shall be delivered to the successor custodian, and the
Custodian agrees to cooperate with the Fund in execution of documents and
performance of other actions necessary or desirable in order to substitute the
successor custodian for the Custodian under this Agreement.
9. AMENDMENT: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreements.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. GOVERNING LAW: This instrument is executed
30
and delivered in The Commonwealth of Massachusetts and shall be governed by and
construed according to the laws of said Commonwealth.
11. NOTICES: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
12. BINDING EFFECT: This Agreement shall be binding on and shall
inure to the benefit of the Fund and the Custodian and their respective
successors and assigns, provided that neither party hereto may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
13. COUNTERPARTS: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
31
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in its name and behalf on the day and year first above written.
PIONEER HIGH YIELD FUND XXXXX BROTHERS XXXXXXXX & CO.
By By
32
