MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
DEFINITIONS..................................................................2
ARTICLE I - CUSTODY PROVISIONS...............................................5
1. Appointment of Custodian...............................................5
2. Custody of Cash and Securities.........................................5
3. Settlement of Fund Transactions........................................9
4. Lending of Securities.................................................10
5. Persons Having Access to Assets of the Fund...........................10
6. Standard of Care; Limit of Custodial Responsibilities.................10
7. Appointment of Subcustodians..........................................12
8. Overdraft Facility and Security for Payment...........................12
9. Tax Obligations.......................................................13
ARTICLE II - FOREIGN CUSTODY MANAGER SERVICES...............................15
1. Delegation............................................................15
2. Changes to Appendix B.................................................15
3. Reports to Board......................................................15
4. Monitoring System.....................................................15
5. Standard of Care......................................................15
6. Use of Securities Depositories........................................16
ARTICLE III - INFORMATION SERVICES..........................................17
1. Risk Analysis........................................................17
2. Monitoring of Securities Depositories................................17
3. Use of Agents........................................................17
4. Exercise of Reasonable Care..........................................17
5. Liabilities and Warranties...........................................17
ARTICLE IV - GENERAL PROVISIONS.............................................18
1. Compensation..........................................................18
2. Insolvency of Foreign Custodians......................................18
3. Liability for Depositories............................................18
4. Damages...............................................................18
5. Indemnification; Liability of the Fund................................18
6. Force Majeure.........................................................19
7. Termination...........................................................19
8. Books and Records.....................................................20
9. Miscellaneous.........................................................20
APPENDIX A List of Authorized Persons.....................................23
APPENDIX B Selected Countries.............................................24
APPENDIX C Self Custody Rider.............................................25
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of April 18, 2001, and is between DREYFUS
GNMA FUND, INC., (the "Fund") corporation organized under the laws of the State
of Maryland having its principal office and place of business at 000 XXXX
XXXXXX, XXX XXXX, XXX XXXX 00000, AND MELLON BANK, N.A., (the "Custodian"), a
national banking association with its principal place of business at Xxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Fund and the Custodian desire to set forth their agreement
with respect to the custody of the Fund's Securities and cash and the processing
of Securities transactions;
WHEREAS, the Board desires to delegate certain of its responsibilities for
performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to the Custodian as a Foreign Custody Manager (as defined in Rule
17f-5);
WHEREAS, the Custodian agrees to accept such delegation with respect to
Assets, including those held by Foreign Custodians in the Selected Countries;
and
WHEREAS, the Custodian meets the requirements of a Primary Custodian and
agrees to perform the function of a Primary Custodian under Rule 17f-7;
NOW THEREFORE, the Fund and the Custodian agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires otherwise, shall
have the following meanings:
1. "ACT": the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time.
2. "AGREEMENT": this agreement and any amendments.
3. "ASSETS": any of the Fund's investments, including foreign
currencies and investments for which the primary market is
outside the United States, and such cash and cash equivalents as
are reasonably necessary to effect the Fund's transactions in
such investments.
4. "AUTHORIZED PERSON": any person, whether or not any such person
is an officer or employee of the Fund, duly authorized by the
Board to give Instructions on behalf of the Fund, who is listed
IN THE CERTIFICATE ANNEXED HERETO AS APPENDIX A or such other
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Certificate as may be received by the Custodian from time to time.
5. "BOARD": the Board of Directors (or the body authorized to
exercise authority similar to that of the board of directors of a
corporation) of the Fund.
6. "BOOK-ENTRY SYSTEM": the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its
successor or successors and its nominee or nominees.
7. "BUSINESS DAY": each day on which the Fund is required to
determine its net asset value, and any other day on which the
Securities and Exchange Commission may require the Fund to be
open for business.
8. "CERTIFICATE": any notice, instruction or other instrument in
writing, authorized or required by this Agreement to be given to
the Custodian, which is actually received by the Custodian and
signed on behalf of the Fund by an Authorized Person.
9. "COUNTRY RISK": all factors reasonably related to the systemic
risk of holding assets in a particular country including, but not
limited to, such country's financial infrastructure (including
Securities Depositories), prevailing or developing custody and
settlement practices and laws applicable to the safekeeping and
recovery of Assets held in custody.
10. "ELIGIBLE SECURITIES DEPOSITORY": the meaning of the term set
forth in Rule 17f-7(b)(1).
11. "FOREIGN CUSTODIAN": (a) a banking institution or trust company
incorporated or organized under the laws of a country other than
the United States, that is regulated as such by the country's
government or an agency of the country's government; (b) a
majority-owned direct or indirect subsidiary of a U.S. Bank or
bank holding company; or (c) any entity other than a Securities
Depository with respect to which exemptive or no-action relief
has been granted by the Securities and Exchange Commission to
permit it to hold Assets of a registered investment company. For
the avoidance of doubt, the term "Foreign Custodian" shall not
include Euroclear, Clearstream, or any other transnational system
for the central handling of securities or equivalent book-entries
regardless of whether or not such entities or their service
providers are acting in a custodial capacity with respect to
Assets, Securities or other property of the Fund.
12. "INSTRUCTIONS": directions and instructions to the Custodian from an
Authorized Person in writing by facsimile or electronic transmission
subject to the Custodian's practices or any other method
specifically agreed upon, provided that the Custodian may, in its
discretion, accept oral directions and instructions from an
individual it reasonably believes to be an Authorized Person and may
require confirmation in writing.
13. "PRIMARY CUSTODIAN": the meaning set forth in Rule 17f-7(b)(2).
14. "PROSPECTUS": the Fund's current prospectus and statement of
additional information relating to the registration of the Fund's
Shares under the Securities Act of 1933, as amended.
15. "RISK ANALYSIS": the analysis required under Rule 17f-7(a)(1)(i)(A).
16. "RULES 17F-4, 17F-5 AND 17F-7": such Rules as promulgated under
Section 17(f) of the Act, as such rules (and any successor rules
or regulations) may be amended from time to time.
17. "SECURITY" OR "SECURITIES": bonds, debentures, notes, stocks,
shares, evidences of indebtedness, options, futures, warrants and
other securities, commodities, interests and investments from
time to time owned by the Fund.
18. "SECURITIES DEPOSITORY": a system for the central handling of
securities as defined in Rule 17f-4.
19. "SELECTED COUNTRIES": THE JURISDICTIONS LISTED ON APPENDIX B as
such may be amended from time to time in accordance with Article
II.
20. "SHARES" shares of the Fund, however designated.
21. "TRANSFER AGENT": the person which performs the transfer agent
functions for the Fund.
22. "U.S. BANK": the meaning set forth in Rule 17f-5(a)(7).
ARTICLE I
CUSTODY PROVISIONS
1. APPOINTMENT OF CUSTODIAN. The Board appoints the Custodian, and the Custodian
accepts such appointment, as custodian of all the Securities and monies at the
time owned by or in the possession of the Fund during the period of this
Agreement.
2. CUSTODY OF CASH AND SECURITIES.
(A) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver or cause
to be delivered to the Custodian all Securities and monies owned
by it at any time during the period of this Agreement. The
Custodian will not be responsible for such Securities and monies
until actually received. The Custodian shall establish and
maintain a separate account for the Fund and shall credit to the
separate account all Securities and monies so received. The
Board specifically authorizes the Custodian to hold Securities,
Assets or other property of the Fund with any domestic
subcustodian, or Securities Depository; and Foreign Custodians or
Eligible Securities Depositories in the Selected Countries as
provided in Article II. Securities and monies of the Fund
deposited in a Securities Depository or Eligible Securities
Depositories will be reflected in an account or accounts which
include only assets held by the Custodian or a Foreign Custodian
for its customers.
(B) DISBURSEMENTS OF CASH AND DELIVERY OF SECURITIES. The Custodian
shall disburse cash or deliver out Securities only for the purposes
listed below. Instructions must specify or evidence the purpose for
which any transaction is to be made and the Fund shall be solely
responsible to assure that Instructions are in accord with any
limitations or restrictions applicable to the Fund.
(1) In payment for Securities purchased for the Fund, upon
receipt of such Securities in accord with market practice;
(2) In payment of dividends or distributions with respect to
Shares;
(3) In payment for Shares which have been redeemed by the Fund;
(4) In payment of taxes;
(5) When Securities are called, redeemed, retired, or otherwise
become payable;
(6) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan or
merger, consolidation, reorganization, recapitalization or
readjustment;
(7) Upon conversion of Securities pursuant to their terms into
other securities;
(8) Upon exercise of subscription, purchase or other similar
rights represented by Securities;
(9) For the payment of interest, management or supervisory fees,
distributions or operating expenses;
(10) In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund;
(11) In connection with any borrowings by the Fund or short sales
of securities requiring a pledge of Securities, but only
against receipt of amounts borrowed;
(12) In connection with any loans, but only against receipt of
adequate collateral as specified in Instructions which shall
reflect any restrictions applicable to the Fund;
(13) For the purpose of redeeming Shares of the Fund and the
delivery to, or the crediting to the account of, the
Custodian or the Fund's transfer agent, net amounts payable
with respect to such Shares to be redeemed;
(14) For the purpose of redeeming in kind Shares of the Fund
against delivery to the Custodian or the Transfer Agent of
such Shares to be so redeemed;
(15) For delivery 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 (the
"Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or
other arrangements in connection with transactions by the
Fund. The Custodian will act only in accordance with
Instructions in the delivery of Securities to be held in
escrow and will have no responsibility or liability for any
such Securities which are not returned promptly when due
other than to make proper requests for such return;
(16) For spot or forward foreign exchange transactions to
facilitate security trading, receipt of income from
Securities or related transactions;
(17) When Securities are sold by the Fund, upon receipt of the
total amount payable to the Fund therefore, in accord with
market practice;
(18) Upon the termination of this Agreement; and
(19) Pursuant to a Certificate setting forth the name and address
of the person to whom the payment is to be made, the account
from which payment is to be made, the amount to be paid and
the purpose for which payment is to be made, provided that
in the event of disbursements pursuant to this paragraph 19
of Section 2(b), the Fund shall indemnify and hold the
Custodian harmless from any claims or losses arising out of
such disbursements in reliance on such Certificate.
(C) ACTIONS WHICH MAY BE TAKEN WITHOUT INSTRUCTIONS. Unless an
Instruction to the contrary is received, the Custodian shall:
(1) Collect all income due or payable, provided that the
Custodian shall not be responsible for the failure to
receive payment of (or late payment of) distributions or
other payments with respect to Securities or other property
held in the account;
(2) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, retired
or otherwise become payable. Notwithstanding the foregoing,
the Custodian shall have no responsibility to the Fund for
monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds or similar
instruments which are owned by the Fund and held by the
Custodian or its nominees where such dates are not published
in sources routinely used by the Custodian. The Custodian
shall have no responsibility or liability to the Fund for
any loss by the Fund for any missed payments or other
defaults resulting therefrom when information is not
published in sources routinely used by the Custodian, unless
the Custodian received timely notification from the Fund
specifying the time, place and manner for the presentment of
any such put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability for the accuracy or
completeness of any notification the Custodian may furnish
to the Fund with respect to put bonds or similar
instruments;
(3) Surrender Securities in temporary form for definitive
Securities;
(4) Hold directly, or through a Securities Depository with
respect to Securities therein deposited, for the account of
the Fund all rights and similar Securities issued with
respect to any Securities held by the Custodian hereunder
for the Fund;
(5) Submit or cause to be submitted to Fund or its investment
advisor, as designated by Fund, information actually
received by the Custodian regarding ownership rights
pertaining to property held for the Fund;
(6) Deliver or cause to be delivered any Securities held for the
Fund in exchange for other Securities or cash issued or paid
in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of
any corporation, or the exercise of any conversion
privilege;
(7) Deliver Securities upon the receipt of payment in connection
with any repurchase agreement related to such Securities
entered into by the Fund;
(8) Deliver Securities owned by the Fund to the issuer thereof
or its agent when such Securities are called, redeemed,
retired or otherwise become payable; provided, however, that
in any such case the cash or other consideration is to be
delivered to the Custodian. Notwithstanding the foregoing,
the Custodian shall have no responsibility to the Fund for
monitoring or ascertaining any call, redemption or
retirement dates with respect to put bonds or similar
instruments which are owned by the Fund and held by the
Custodian or its nominee where such dates are not published
in sources routinely used by the Custodian. The Custodian
shall have no responsibility or liability to the Fund for
any loss by the Fund for any missed payment or other default
resulting therefrom when information is not published in
sources routinely used by the Custodian, unless the
Custodian received timely notification from the Fund
specifying the time, place and manner for the presentment of
any such put bond owned by the Fund and held by the
Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability to the Fund for the
accuracy or completeness of any notification the Custodian
may furnish to the Fund with respect to put bonds or similar
investments;
(9) Endorse and collect all checks, drafts or other orders for
the payment of money received by the Custodian for the
account of the Fund; and
(10) Execute any and all documents, agreements or other
instruments as may be necessary or desirable for the
accomplishment of the purposes of this Agreement.
(D) CONFIRMATION AND STATEMENTS. Promptly after the close of
business on each day, the Custodian shall furnish the Fund with
confirmations and a summary of all transfers to or from the
account of the Fund during the day. Where securities purchased
by the Fund are in a fungible bulk of securities registered in
the name of the Custodian (or its nominee) or shown in the
Custodian's account on the books of a Securities Depository, the
Custodian shall by book-entry or otherwise identify the quantity
of those securities belonging to the Fund. At least monthly, the
Custodian shall furnish the Fund with a detailed statement of the
Securities and monies held for the Fund under this Agreement.
(E) REGISTRATION OF SECURITIES. The Custodian is authorized to hold
all Securities, Assets, or other property of the Fund in nominee
name, in bearer form or in book-entry form. The Custodian may
register any Securities, Assets or other property of the Fund in
the name of the Fund, in the name of the Custodian, any domestic
subcustodian, or Foreign Custodian, in the name of any duly
appointed registered nominee of such entity, or in the name of a
Securities Depository or its successor or successors, or its
nominee or nominees. The Fund agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name
of its registered nominee or in the name of a Securities
Depository, any Securities which it may hold for the account of
the Fund and which may from time to time be registered in the
name of the Fund.
(F) SEGREGATED ACCOUNTS. Upon receipt of Instruction, the Custodian
will, from time to time establish segregated accounts on behalf of
the Fund to hold and deal with specified assets as shall be
directed.
3. SETTLEMENT OF FUND TRANSACTIONS.
(A) CUSTOMARY PRACTICES. Settlement of transactions may be effected in
accordance with trading and processing practices customary in the
jurisdiction or market where the transaction occurs. The Fund
acknowledges that this may, in certain circumstances, require the
delivery of cash or Securities (or other property) without the
concurrent receipt of Securities (or other property) or cash. In such
circumstances, the Custodian shall have no responsibility for
nonreceipt of payments (or late payment) or nondelivery of Securities
or other property (or late delivery) by the counterparty.
(B) CONTRACTUAL INCOME. Unless the parties agree to the contrary, the
Custodian shall credit the Fund; in accordance with the Custodian's
standard operating procedure, with income and maturity proceeds on
securities on contractual payment date, net of any taxes, or upon
actual receipt. To the extent the Custodian credits income on
contractual payment date, the Custodian may reverse such accounting
entries with back value to the contractual payment date if the
Custodian reasonably believes that such amount will not be received.
(C) CONTRACTUAL SETTLEMENT. Unless the parties agree to the contrary, the
Custodian will attend to the settlement of securities transactions in
accordance with the Custodian's standard operating procedure, on the
basis of either contractual settlement date accounting or actual
settlement date accounting. To the extent the Custodian settles
certain securities transactions on the basis of contractual
settlement date accounting, the Custodian may reverse with back value
to the contractual settlement date any entry relating to such
contractual settlement if the Custodian reasonably believes that such
amount will not be received.
4. LENDING OF SECURITIES. The Custodian may lend the assets of the Fund
in accordance with the terms and conditions of a separate securities lending
agreement.
5. PERSONS HAVING ACCESS TO ASSETS OF THE FUND.
(a) No trustee or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any
sub-investment adviser of the Fund, or of the Fund's
administrator, shall have physical access to the assets of the
Fund held by the Custodian or be authorized or permitted to
withdraw any investments of the Fund, nor shall the Custodian
deliver any assets of the Fund to any such person.
No officer, director, employee or agent of the Custodian who
holds any similar position with the Fund's investment adviser,
with any sub-investment adviser of the Fund or with the Fund's
administrator shall have access to the assets of the Fund.
(b) Nothing in this Section 5 shall prohibit any duly authorized
officer, employee or agent of the Fund, or any duly authorized
officer, director, employee or agent of the investment adviser,
of any sub-investment adviser of the Fund or of the Fund's
administrator, from giving Instructions to the Custodian or
executing a Certificate so long as it does not result in delivery
of or access to assets of the Fund prohibited by paragraph (a) of
this Section 5.
6. STANDARD OF CARE; LIMIT OF CUSTODIAL RESPONSIBILITIES.
(a) STANDARD OF CARE. In connection with its duties and
responsibilities under this Article I, the Custodian shall not be
liable for any loss or damage, including counsel fees, resulting
from its action or omission to act or otherwise, except for any such
loss or damage arising out of the negligence or willful misconduct
of the Custodian, its employees, agents or domestic subcustodians.
The Custodian may, with respect to questions of law, apply for and
obtain the advice and opinion of counsel to the Fund or of its own
counsel, at the expense of the Fund, and shall be fully protected
with respect to anything reasonably done or omitted by it in
conformity with such advice or opinion.
(b) LIMIT OF DUTIES. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into,
and shall not be liable for:
(1) The acts or omissions of any agent appointed pursuant to
Instructions of the Fund or its investment advisor including,
but not limited to, any broker-dealer or other entity to hold
any Securities or other property of the Fund as collateral or
otherwise pursuant to any investment strategy;
(2) The validity of the issue of any Securities purchased by the
Fund, the legality of the purchase thereof, or the propriety
of the amount paid therefor;
(3) The legality of the sale of any Securities by the Fund or
the propriety of the amount for which the same are sold;
(4) The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
(5) The legality of the redemption of any Shares, or the
propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of the Fund;
(7) The legality of any borrowing for temporary or emergency
purposes.
(c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable for,
or considered to be the Custodian of, any money, whether or not
represented by any check, draft, or other instrument for the payment
of money, received by it on behalf of the Fund until the Custodian
actually receives and collects such money, directly or by the final
crediting of the account representing the Fund's interest in the
Book- Entry System or Securities Depository.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall not be required
to effect collection of any amount due to the Fund from the Transfer
Agent nor be required to cause payment or distribution by the
Transfer Agent of any amount paid by the Custodian to the Transfer
Agent.
(e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall not be
required to take action to effect collection of any amount, if the
Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and
until it shall be directed to take such action and it shall be
assured to its satisfaction of reimbursement of its related costs
and expenses.
(f) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund are such as may properly be
held by the Fund under the provisions of its governing instruments
or Prospectus.
(g) RELIANCE ON INSTRUCTIONS. The Custodian shall be entitled to rely
upon any Certificate, Instruction, notice or other instrument in
writing received by the Custodian and reasonably believed by the
Custodian to be genuine and to be signed by an Authorized Person
of the Fund. Where the Custodian is issued Instructions orally,
the Fund acknowledges that if written confirmation is requested,
the validity of the transactions or enforceability of the
transactions authorized by the Fund shall not be affected if such
confirmation is not received or is contrary to oral Instructions
given. The Custodian shall be under no duty to question any
direction of an Authorized Person, to review any property held in
the Fund's account, to make any suggestions with respect to the
investment of the Assets in the Fund's account, or to evaluate or
question the performance of any Authorized Person. The Custodian
shall not be responsible or liable for any diminution of value of
any Securities or other property held by the Custodian, absent a
breach of the Custodian's duties under this Agreement.
7. APPOINTMENT OF SUBCUSTODIANS. The Custodian is hereby authorized to appoint
one or more domestic subcustodians (which may be an affiliate of the Custodian)
to hold Securities and monies at any time owned by the Fund. The Custodian is
also hereby authorized when acting pursuant to Instructions to: 1) place Assets
with any Foreign Custodian located in a jurisdiction which is not a Selected
Country and with Euroclear, Clearstream, or any other transnational depository;
and 2) place Assets with a broker or other agent as subcustodian in connection
with futures, options, short selling or other transactions. When acting pursuant
to such Instructions, the Custodian shall not be liable for the acts or
omissions of any subcustodian so appointed.
8. OVERDRAFT FACILITY AND SECURITY FOR PAYMENT. In the event that the Custodian
receives Instructions to make payments or transfers of monies on behalf of the
Fund for which there would be, at the close of business on the date of such
payment or transfer, insufficient monies held by the Custodian on behalf of the
Fund, the Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Fund in an amount sufficient to allow the completion of such
payment or transfer. Any Overdraft provided hereunder: (a) shall be payable on
the next Business Day, unless otherwise agreed by the Fund and the Custodian;
and (b) shall accrue interest from the date of the Overdraft to the date of
payment in full by the Fund at a rate agreed upon from time to time, by the
Custodian and the Fund or, in the absence of specific agreement, at such rate as
charged to other customers of Custodian under procedures uniformly applied. The
Custodian and the Fund acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt delivery in accordance
with the terms hereof, to meet unanticipated or unusual redemptions, to allow
the settlement of foreign EXCHANGE CONTRACTS or to meet other unanticipated Fund
expenses. The Custodian shall promptly notify the Fund (an "Overdraft Notice")
of any Overdraft. To secure payment of any Overdraft, the Fund hereby grants to
the Custodian a continuing security interest in and right of setoff against the
Securities and cash in the Fund's account from time to time in the full amount
of such Overdraft. Should the Fund fail to pay promptly any amounts owed
hereunder, the Custodian shall be entitled to use available cash in the Fund's
account and to liquidate Securities in the account as necessary to meet the
Fund's obligations under the Overdraft. In any such case, and without limiting
the foregoing, the Custodian shall be entitled to take such other actions(s) or
exercise such other options, powers and rights as the Custodian now or hereafter
has as a secured creditor under the Massachusetts Uniform Commercial Code or any
other applicable law.
9. TAX OBLIGATIONS. For purposes of this Agreement, "Tax Obligations"
shall mean taxes, withholding, certification and reporting requirements, claims
forexemptions or refund, interest, penalties, additions to tax and other related
expenses. To the extent that the Custodian has received relevant and necessary
information with respect to the Fund's account, the Custodian shall perform the
following services with respect to Tax Obligations:
a. the Custodian shall file claims for exemptions or refunds with respect
to withheld foreign (non-U.S.) taxes in instances in which such claims
are appropriate;
b. the Custodian shall withhold appropriate amounts, as required by U.S.
tax laws, with respect to amounts received on behalf of nonresident
aliens; and
c. the Custodian shall provide to the Fund or an Authorized Person such
information received by the Custodian which could, in the Custodian's
reasonable belief, assist the Fund or the Authorized Person in the
submission of any reports or returns with respect to Tax Obligations.
The Fund shall inform the Custodian in writing as to which party or
parties shall receive information from the Custodian.
The Custodian shall provide such other services with respect to Tax
Obligations, including preparation and filing of tax returns and reports and
payment of amounts due (to the extent funded), as requested by the Fund and
agreed to by the Custodian in writing. The Custodian shall have no independent
obligation to determine the existence of any information with respect to, or the
extent of, any Tax Obligations now or hereafter imposed on the Fund or its
account by any taxing authority. Except as specifically provided herein or
agreed to in writing by the Custodian, the Custodian shall have no obligations
or liability with respect to Tax Obligations, including, without limitation, any
obligation to file or submit returns or reports with any taxing authorities.
In making payments to service providers pursuant to Instructions, the Fund
acknowledges that the Custodian is acting as a paying agent and not as the
payor, for tax information reporting and withholding purposes.
ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. DELEGATION. The Board delegates to the Custodian, and the Custodian HEREBY
AGREES TO ACCEPT, RESPONSIBILITY as the Fund's Foreign Custody Manager for
selecting, contracting with and monitoring Foreign Custodians in Selected
Countries set forth in Appendix B (except as noted therein) in accordance with
Rule 17f-5(c).
2. CHANGES TO APPENDIX B. Appendix B may be amended from time to time to add or
delete jurisdictions by written agreement signed by an Authorized Person of the
Fund and the Custodian, but the Custodian reserves the right to delete
jurisdictions upon reasonable notice to the Fund.
3. REPORTS TO BOARD. Custodian shall provide written reports notifying the Board
of the placement of Assets with a particular Foreign Custodian. Such reports
shall be provided to the Board quarterly, except as otherwise agreed by the
Custodian and the Fund. The Custodian shall promptly notify the Board, in
writing, of any material change in Fund's foreign custody arrangements.
4. MONITORING SYSTEM. IN each case in which the Custodian has exercised
delegated authority to place Assets with a Foreign Custodian, the Custodian
shall monitor the appropriateness of maintaining the Assets with such Foreign
Custodian, and the performance of the Foreign Custodian under its contract with
the custodian, in accordance with Rule 17f-5(c)(3). The Custodian will notify
the Fund as soon as possible if an arrangement with a Foreign Custodian no
longer meets the requirements of Rule 17f-5, so that the Fund may withdraw its
Assets in accordance with Rule 17f-5(c)(3)(ii).
5. STANDARD OF CARE; INDEMNITY. In exercising the delegated authority under this
Article of the Agreement, the Custodian agrees to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of the Assets would exercise in like circumstances. Contracts with
Foreign Custodians shall comply with Rule 17f-5(c)(2), and provide for
reasonable care for Assets based on the standards applicable to Foreign
Custodians in the Selected Country. In making this determination, the Custodian
shall consider the factors set forth in Rule 17f-5(c)(1). In addition, the
Custodian shall hold the Fund harmless from, and indemnify the Fund against, any
loss, action, claim, demand, expense and proceeding, including counsel fees,
that occurs as a result of the failure of any Foreign Custodian to exercise
reasonable care with respect to the safekeeping of Securities and monies of the
Fund. Notwithstanding the generality of the foregoing, however, the Custodian
shall not be liable for any losses resulting from Country Risk.
6. USE OF SECURITIES DEPOSITORIES. In exercising its delegated authority,
Custodian may assume, unless instructed in writing to the contrary, that the
Board or the Fund's investment adviser has determined, pursuant to Rule 17f-7,
to place and maintain foreign assets with any Securities Depository as to which
the Custodian has provided the Fund with a Risk Analysis.
[BALANCE OF PAGE INTENTIONALLY BLANK]
ARTICLE III
INFORMATION SERVICES
1. RISK ANALYSIS. The Custodian will provide the Fund with a Risk Analysis with
respect to Securities Depositories operating in the countries LISTED IN APPENDIX
B. If the Custodian is unable to provide a Risk Analysis with respect to a
particular Securities Depository, it will notify the Fund. If a new Securities
Depository commences operation in one of the Appendix B countries, the Custodian
will provide the Fund with a Risk Analysis in a reasonably practicable time
after such Securities Depository becomes operational. If a new country is added
to Appendix B, the Custodian will provide the Fund with a Risk Analysis with
respect to each Securities Depository in that country within a reasonably
practicable time after the addition of the country to Appendix B.
2. MONITORING OF SECURITIES DEPOSITORIES. The Custodian will monitor, on a
continuing basis, the custody risks associated with maintaining assets with each
Securities Depository for which it has provided the Fund with a Risk Analysis,
as required under Rule 17f-7. The Custodian will promptly notify Fund or its
investment adviser of any material change in these risks, or if the custody
arrangements with a Securities Depository may no longer meet the requirements of
Rule 17f-7.
3. USE OF AGENTS. Subject to its standard of care in Section 4, below,
The Custodian may employ agents, including, but not limited to Foreign
Custodians, to perform its responsibilities under Sections 1 and 2 above.
4. EXERCISE OF REASONABLE CARE. The Custodian will exercise reasonable care,
prudence, and diligence in performing its responsibilities under this Article
III. With respect to the Risk Analyses provided or monitoring performed by an
agent, the Custodian will exercise reasonable care in the selection of such
agent, and shall be entitled to rely upon information provided by agents so
selected in the performance of its duties and responsibilities under this
Article III, unless the Custodian knows or should have known such information to
be incorrect, incomplete or misleading.
5. LIABILITIES AND WARRANTIES. While the Custodian will take reasonable
precautions to ensure that information provided is accurate, the Custodian shall
have no liability with respect to information provided to it by third parties,
unless the Custodian knows or should have known such information to be
incorrect, incomplete or misleading. Except as provided, due to the nature and
source of information, and the necessity of relying on various information
sources, most of which are external to the Custodian, the Custodian shall have
no liability for direct or indirect use of such information.
ARTICLE IV
GENERAL PROVISIONS
1. COMPENSATION.
(a) The Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees, including out
of pocket disbursements, set forth in a separate Fee Schedule,
which schedule may be modified by the Custodian upon not less
than sixty days prior written notice to the Fund. The Custodian
shall also be entitled to reimbursement from the Fund for the
amount of any loss, damage, liability or expense incurred with
respect to the Fund, including counsel fees, for which it shall
be entitled to reimbursement under the provisions of this
Agreement.
(b) The Custodian will xxxx the Fund as soon as practicable after the
end of each calendar month. The Fund will promptly pay to the
Custodian the amount of such billing.
(c) If not paid timely by the Fund, and unless otherwise reasonably
disputed by the Fund, the Custodian may charge against assets held
on behalf of the Fund compensation and any expenses incurred by the
Custodian in the performance of its duties pursuant to this
Agreement.
2. INSOLVENCY OF FOREIGN CUSTODIANS. The Custodian shall be responsible for
losses or damages suffered by the Fund arising as a result of the insolvency of
a Foreign Custodian only to the extent that the Custodian failed to comply with
the standard of care set forth in Article II with respect to the selection and
monitoring of such Foreign Custodian.
3. LIABILITY FOR DEPOSITORIES. The Custodian shall not be responsible for any
losses resulting from the deposit or maintenance of Securities, Assets or other
property of the Fund with a Securities Depository. Nothing in this provision
shall preclude damages for a breach of duties under Article III.
4. DAMAGES. The Custodian shall not be liable for any indirect, consequential or
special damages with respect to its role as Foreign Custody Manager, Custodian
or information vendor, except as may arise from its bad faith or willful
misconduct in performing its responsibilities hereunder.
5. LIABILITY OF THE FUND. The Fund and the Custodian agree that the obligations
of the Fund under this Agreement shall not be binding upon any of the Directors,
Trustees, shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only upon the
assets and property of the Fund.
6. FORCE MAJEURE. The Custodian shall not be liable for any losses resulting
from or caused by events or circumstances beyond its reasonable control,
including, but not limited to, losses resulting from nationalization, strikes,
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 the breakdown, failure
or malfunction of any utilities or telecommunications systems; or any order or
regulation of any banking or securities industry including changes in market
rules and market conditions affecting the execution or settlement of
transactions; or acts of war, terrorism, insurrection or revolution; or any
other similar event.
7. TERMINATION.
(a) Either party may terminate this Agreement by giving the other party
two hundred seventy (270) days notice in writing, specifying the date
of such termination. In the event notice is given by the Fund, it
shall be accompanied by a Certificate evidencing the vote of the
Fund's Board to terminate this Agreement.
(b) The Fund shall, on or before a specified termination date, deliver to
the Custodian a Certificate evidencing the vote of the Board
designating a successor custodian. In the absence of such designation,
the Custodian may designate a successor custodian, which shall be a
person qualified to so act under the Act, or the Fund. If both the
Custodian and the Fund fail to designate a successor custodian, the
Fund shall, upon the date specified in the notice of termination, and
upon the delivery by the Custodian of all Securities and monies then
owned by the Fund, be deemed to be its own custodian and the Custodian
shall thereby be relieved of all duties and responsibilities under
this Agreement, other than the duty with respect to Securities held in
the Book-Entry System which cannot be delivered to the Fund.
(c) Upon termination of the Agreement, the Custodian shall, upon receipt
of a notice of acceptance by the successor custodian, deliver to the
successor all Securities and monies then held by the Custodian on
behalf of the Fund, after deducting all fees, expenses and other
amounts owed which have not been reasonably disputed.
(d) In the event of a dispute following the termination of this Agreement,
all relevant provisions shall be deemed to continue to apply to the
obligations and liabilities of the parties with respect thereto.
8. BOOKS AND RECORDS. The books and records pertaining to the Fund which are in
the possession of the Custodian shall be the property of the Fund. (The
Custodian may, however, to the extent required by law or regulation retain
copies of the same if the Fund requests the return of its books and records.)
Such books and records shall be prepared and maintained as required by the Act,
and other applicable securities laws, rules and regulations. Such books and
records shall be open to inspection and audit at reasonable times by officers
and auditors employed by the Fund at its own expense and with prior written
notice to the Custodian, and by the appropriate employees of the Securities and
Exchange Commission.
9. MISCELLANEOUS.
(a) APPENDIX A is a Certificate signed by the Secretary of the Fund
setting forth the names and the signatures of Authorized Persons.
The Fund shall furnish a new Certificate when the list of Authorized
Persons is changed in any way. Until a new certification is
received, the Custodian shall be fully protected in acting upon
Instructions from Authorized Persons as set forth in the last
delivered Certificate.
(b) Any required written notice or other instrument shall be
sufficiently given if addressed to the Custodian or the Fund as the
case may be and delivered to it at its offices at:
The Custodian:
Boston Safe Deposit and Trust Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
The Fund:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn. Xxxxxx Xxxxxxxx
or at such other place as the parties may from time to time
designate to the other in writing.
(c) This Agreement may not be amended or modified except by a written
agreement executed by both parties.
(d) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by
the Fund without the written consent of the Custodian, or by the
Custodian without the written consent of the Fund authorized or
approved by a vote of the Board, provided, however, that the
Custodian may assign the Agreement or any function thereof to any
corporation or entity which directly or indirectly is controlled
by, or is under common control with, the Custodian and any other
attempted assignment without written consent shall be null and
void.
(e) Nothing in this Agreement shall give or be construed to give or
confer upon any third party any rights hereunder.
(f) The Custodian represents that it is a U.S. Bank within the
meaning of paragraph (a)(7) of Rule 17f-5.
(g) The Fund acknowledges and agrees that, except as expressly set
forth in this Agreement, the Fund is solely responsible to assure
that the maintenance of the Fund's Securities and cash hereunder
complies with applicable laws and regulations, including without
limitation the Act and the rules and regulations promulgated
thereunder and applicable interpretations thereof or exemptions
therefrom. The Fund represents that it has determined that it is
reasonable to rely on the Custodian to perform the
responsibilities delegated pursuant to this Agreement.
(h) This Agreement shall be construed in accordance with the laws of The
Commonwealth of Pennsylvania.
(i) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(j) Each party represents to the other that it has all necessary
power and authority, and has obtained any consent or approval
necessary, to permit it to enter into and perform this Agreement
and that this Agreement does not violate, give rise to a default
or right of termination under or otherwise conflict with, any
applicable law, regulation, ruling, decree or other governmental
authorization or any contract to which it is a party or by which
any of its assets is bound.
(k) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives duly authorized as of the day and year first
above written.
DREYFUS GNMA FUND, INC.
BY:
------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary
MELLON BANK, N.A.
BY:
------------------------
Name:
Title:
APPENDIX A
LIST OF AUTHORIZED PERSONS
I, ______________________, the Secretary of ______________________, a
corporation organized under the laws of the State of Maryland (the "Fund"), do
hereby certify that:
The following individuals have been duly authorized as Authorized Persons
to give Instructions on behalf of the Fund and the specimen signatures set forth
opposite their respective names are their true and correct signatures:
NAME SIGNATURE
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
BY:
______________________
Secretary
Dated:
APPENDIX B
SELECTED COUNTRIES
[List] [TO BE PROVIDED]
"*Note, Custodian will not act as a Foreign Custody Manager with respect to
assets held in this country. Holding assets and use of Mellon's usual
subcustodian in this country is subject to Instructions by the Fund and its
execution of a separate letter-agreement pertaining to custody and market
risks."
APPENDIX C
SELF CUSTODY RIDER
Notwithstanding any other provisions of this Agreement to the contrary, the
following provisions shall apply to this Agreement as being subject to Rule
17f-2 under the Act.
1. PHYSICAL SEPARATIONS OF SECURITIES. Except as permitted by Rule 17f-2
or Rule 17f-4, the Custodian shall hold all Securities deposited with
it physically segregated at all times from those of any other person.
2. ACCESS TO SECURITIES. Except as otherwise provided by law, no person
shall be authorized or permitted to have access to the Securities
deposited with the Custodian except pursuant to a Board resolution.
Each such resolution shall designate not more than five persons who
shall be either officers or responsible employees of the Fund and shall
provide that access to such investments shall be had only by two or
more such persons jointly, at least one of whom shall be an officer;
except that access to such investments shall be permitted (1) to
properly authorized officers and employees of the Custodian and (2) to
the Fund's independent public accountant jointly with any two persons
so designated or with such officer or employee of the Custodian.
3. DEPOSITS AND WITHDRAWALS. Each person when depositing such securities or
similar investments in or withdrawing them from a Securities Depository or
when ordering their withdrawal and delivery from the safekeeping of the
Custodian, shall comply with the requirements of Rule 17f-2(e).
4. EXAMINATION. The Fund shall comply with the requirements of Rule
17f-2(f) with regard to examinations by an independent public
accountant.
Acknowledged:
______________________
Dreyfus GNMA Fund, Inc. Mellon Bank, N.A.
