FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of September __, 1998 between each investment company
identified on Appendix A attached hereto (each hereinafter referred to as the
"Fund") individually and severally, and not jointly and severally, and
Citibank, N.A. ("Citibank").
WITNESSETH:
WHEREAS, the Fund desires to appoint Citibank as Foreign Custody
Manager on the terms and conditions contained herein;
WHEREAS, Citibank desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and conditions contained
herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Fund and Citibank hereby agrees as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. Capitalized terms used in this Agreement and not otherwise
defined in this Agreement shall have the meanings given such terms in the
Rule.
2. "Board" shall mean the board of directors or board of trustees,
as the case may be, of the Fund.
3. "Eligible Foreign Custodian" shall have the meaning provided in
the Rule.
4. "Monitoring System" shall mean a system established by Citibank
to fulfill the Responsibilities specified in clauses (d) and (e) of Article
III of this Agreement.
5. "Qualified Foreign Bank" shall have the meaning provided in the
Rule.
6. "Responsibilities" shall mean the responsibilities delegated to
Citibank as a Foreign Custody Manager with respect to each Specified Country
and each Eligible Foreign Custodian selected by Citibank, as such
responsibilities are more fully described in Article III of this Agreement.
7. "Rule" shall mean Rule 17f-5 under the Investment Company Act of
1940, as amended, as such Rule became effective on June 16, 1997.
8. "Securities Depository" shall mean any securities depository or
clearing agency within the meaning of Section (a)(1)(ii) or (a)(1)(iii) of
the Rule.
9. "Specified Country" shall mean each country listed on Schedule I
attached hereto (as amended from time to time) and each country, other than
the United States, constituting the primary market for a security with
respect to which the Fund has given settlement instructions to Citibank, N.A.
as custodian (the "Custodian") under its Custody Agreement with the Fund.
ARTICLE II
CITIBANK AS A FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to Citibank with
respect to each Specified Country the Responsibilities (the "Delegation").
2. Citibank accepts the Delegation and agrees in performing the
Responsibilities as a Foreign Custody Manager to exercise reasonable care,
prudence and diligence such as a bailee for hire having responsibility for
the safekeeping of the Fund's assets would exercise.
3. Citibank shall provide to the Fund (i) notice promptly after the
placement of assets of the Fund with a particular Eligible Foreign Custodian
selected by Citibank within a Specified Country, (ii) at such times as the
Board deems reasonable and appropriate based on the circumstances of the
Fund's foreign custody arrangements (but not less often than quarterly)
written reports notifying the Board of any material change in the
arrangements (including, in the case of Qualified Foreign Banks, any material
change in any contract governing such arrangements and in the case of
Securities Depositories, any material change in the established practices or
procedures of such Securities Depositories) with respect to assets of the
Fund with any such Eligible Foreign Custodian, and (iii) not less often than
annually a report summarizing the material custodial risks known to Citibank
which accompany such arrangements.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, Citibank shall with
respect to each Specified Country select an Eligible Foreign Custodian. In
connection therewith, Citibank shall: (a) determine that assets of the Fund
held by such Eligible Foreign Custodian will be subject to reasonable care,
based on the standards applicable to custodians in the relevant market in
which such Eligible Foreign Custodian operates, after considering all factors
relevant to the safekeeping of such assets, including, without limitation,
those contained in Section (c)(1) of the Rule; (b) determine that the Fund's
foreign custody arrangements with each Qualified Foreign Bank are governed by
a written contract, with the Custodian (or, in the case of a Securities
Depository, by such a contract, by the rules or established practices or
procedures of the Securities Depository, or by any combination of the
foregoing) which will provide reasonable care for the Fund's assets based on
the standards specified in paragraph (c)(1) of the Rule; (c) determine that
each contract with a Qualified Foreign Bank shall include the provisions
specified in paragraph (c)(2)(i)(A) through (F) of the Rule or,
alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F)
provisions, such other provisions as Citibank determines will provide, in
their entirety, the same or a greater level of care and protection for the
assets of the Fund as such specified provisions; (d) monitor pursuant to the
Monitoring System the appropriateness of maintaining the assets of the Fund
with a particular Eligible Foreign Custodian pursuant to paragraph (c)(1) of
the Rule including in the case of a Qualified Foreign Bank, any material
change in the contract governing such arrangement and in the case of a
Securities Depository, any material change in the established practices or
procedures of such Securities Depository; and (3) promptly advise the Fund
whenever an arrangement (including, in the case of a Qualified Foreign Bank,
any material change in the contract governing such arrangement and in the
case of a Securities Depository, any material change in the established
practices or procedures of such Securities Depository) described in preceding
clause (d) no longer meets the requirements of the Rule. Citibank, as
Foreign Custody Manger, will make the determination that it is appropriate to
maintain assets in each Eligible Foreign Custodian and will exercise
reasonable care in the process.
2. (a) For purposes of Clauses (a) and (b) of this Section 1, with
respect to Securities Depositories, it is understood that to the extent
permitted to a Foreign Custody Manager under the Rule, such determination may
be made on the basis of, and the obligation of Citibank hereunder to
investigate any such Securities Depository shall be limited to, obtaining
publicly available information with respect to each such Securities
Depository, absent actual knowledge by Citibank to the contrary.
(b) For purposes of clause (d) of preceding Section 1 of this
Article, Citibank's determination of appropriateness shall not include, nor
be deemed to include, any evaluation of Country Risks associated with
investment in a particular country. For purposes hereof, "Country Risks"
shall mean systemic risks of holding assets in a particular country
including, but no limited to, (a) the necessity to use any Securities
Depository the use of which is mandatory by law or regulation or because
securities cannot be withdrawn from such Securities Depository, or because
maintaining securities outside the Securities Depository is not consistent
with universal custodial practices in the relevant market, (b) such country's
financial infrastructure, (c) such country's prevailing custody and
settlement practices, (d) nationalization, expropriation or other
governmental actions, (e) regulation of the banking or securities industry,
(f) currency controls, restrictions, devaluations or fluctuations, and (g)
market conditions which affect the orderly execution of securities
transactions or affect the value of securities.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Agreement has been duly
authorized, executed and delivered by the Fund, constitutes a valid and
legally binding obligation of the Fund enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding
on the Fund prohibits the Fund's execution or performance of this Agreement;
(b) this Agreement has been approved and ratified by the Board at a meeting
duly called and at which a quorum was at all times present; and (c) the Board
or its investment advisor has considered the Country Risks associated with
investment in each Specified Country and will have considered such risks
prior to any settlement instructions being given to the Custodian with
respect to any other Specified Country.
2. Citibank hereby represents that (a) Citibank is duly organized
and existing under the laws of the State of New York, with full power to
carry on its businesses as now conducted, and to enter into this Agreement
and to perform its obligations hereunder; (b) this Agreement been duly
authorized, executed and delivered by Citibank, constitutes a valid and
legally binding obligation of Citibank enforceable in accordance with its
terms, and no statue, regulation, rule, order, judgment or contract binding
on Citibank prohibits Citibank's execution or performance of this Agreement;
and (c) Citibank has established and will maintain the Monitoring System.
ARTICLE V
CONCERNING CITIBANK
1. Citibank shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained
or incurred by, or asserted against, the Fund except to the extent the same
arises out of the failure of Citibank to exercise the care, prudence and
diligence required by Section 2 of Article II hereof. In no event shall
Citibank be liable to the Fund, the Board, or any third party for special,
indirect or consequential damages, or for lost profits or loss of business,
arising in connection with this Agreement. Anything contained herein to the
contrary notwithstanding, nothing contained herein shall affect or alter the
duties and responsibilities of Citibank or the Fund under any other agreement
between Citibank and the Fund, including without limitation, the Custody
Agreement or any Securities Lending Agreement.
2. The Fund agrees to indemnify Citibank and holds it harmless from
and against any and all costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees, sustained or incurred by, or
asserted against, Citibank by reason or as a result of any action or
inaction, or arising out of Citibank's performance hereunder, provided that
the Fund shall not indemnify Citibank to the extent any such costs, expenses,
damages, liabilities or claims arises out of Citibank's failure to exercise
the reasonable care, prudence and diligence required by Section 2 of Article
II hereof.
3. Citibank shall only such duties as are expressly set forth
herein. In no event shall Citibank be liable for any Country Risks
associated with investments in a particular country.
ARTICLE VI
MISCELLANEOUS
1. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to Citibank, shall be sufficiently given if
received by it at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or at such place as Citibank may from time to time designate in writing.
2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund shall be sufficiently given if
received by it at its offices at c/o OppenheimerFunds, Inc. Two World Trade
Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: General
Counsel, or at such other place as the Fund may from time to time designate
in writing.
3. In case any provisions in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected thereby. This Agreement may not be amended or modified in any
manner except by a written agreement executed by both parties. 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 either party without the written consent
of the other.
4. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of
laws principles thereof. The Fund and Citibank hereby consent to the
jurisdiction of a state or federal court situated in New York City, New York
in connection with any dispute arising hereunder. The Fund hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any
such proceeding brought in such a court and any claim that such proceeding
brought in such a court has been brought in an inconvenient forum. The Fund
and Citibank each hereby irrevocably waives any and all rights to trial by
jury in any legal proceeding arising out of or relating to this Agreement.
5. The parties hereto agree that in performing hereunder, Citibank
is acting solely on behalf of the Fund and no contractual or service
relationship shall be deemed to be established hereby between Citibank and
any other person.
6. 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.
7. This Agreement shall terminate simultaneously with the
termination of the Custody Agreement between the Fund and the Custodian, and
may otherwise be terminated by either party giving to the other party a
notice in writing specifying the date of such termination, which shall be not
less than ninety (90) days after the date of such notice.
8. In consideration of the services provided by Citibank hereunder,
the Fund shall pay to Citibank such compensation and out-of-pocket expenses
as may be agreed upon from time to time.
9. For each Fund organized as a Massachusetts trust, a copy of its
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts. Notice is hereby given that each such instrument is executed
on behalf of the trustees of each such Fund and not individually, and that
the obligations of this Agreement are not binding upon any of the trustees or
shareholders individually but are binding only upon the respective Fund. The
parties expressly agree that Citibank and its assignees and affiliates shall
look solely to the respective Fund's assets and property with respect to
enforcement of any claim.
IN WITNESS WHEREOF, the Fund and Citibank have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as of
this date first above written.
/s/ Xxxxxx X. Xxxxxxx
By:________________________________
Xxxxxx X. Xxxxxxx, Secretary
on behalf of each Fund identified on
Appendix A attached hereto
individually and
severally, and not jointly and severally
CITIBANK, N.A.
/s/ Xxxx Xxxxxxxx
By:__________________
Name & Title: Xxxx Xxxxxxxx Vice President
