FORM OF
MASTER CUSTODIAN AGREEMENT
This Agreement is made as of October __, 2009 by and among each management
investment company identified on Appendix A hereto (each such management
investment company and each management investment company made subject to this
Agreement in accordance with Section 19.5 below, shall hereinafter be referred
to as a "FUND"), and STATE STREET BANK and TRUST COMPANY, a Massachusetts trust
company (the "CUSTODIAN").
WITNESSETH:
WHEREAS, each Fund may or may not be authorized to issue shares of common
stock or shares of beneficial interest in separate series ("SHARES"), with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS, each Fund so authorized intends that this Agreement be applicable
to each of its series set forth on Appendix A hereto (such series together with
all other series subsequently established by the Fund and made subject to this
Agreement in accordance with Section 19.6 below, shall hereinafter be referred
to as the "PORTFOLIO(S)");
WHEREAS, each Fund not so authorized intends that this Agreement be
applicable to it and all references hereinafter to one or more "Portfolio(s)"
shall be deemed to refer to such Fund(s); and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.
Each Fund hereby employs the Custodian as a custodian of assets of the
Portfolios, including securities which the Fund, on behalf of the applicable
Portfolio, desires to be held in places within the United States ("DOMESTIC
SECURITIES") and securities it desires to be held outside the United States
("FOREIGN SECURITIES"). Each Fund, on behalf of its Portfolio(s), agrees to
deliver to the Custodian all securities and cash of the Portfolios, and all
payments of income, payments of principal or capital distributions received by
it with respect to all securities owned by the Portfolio(s) from time to time,
and the cash consideration received by it for such Shares as may be issued or
sold from time to time. The Custodian shall not be responsible for any property
of a Portfolio which is not received by it or which is delivered out in
accordance with Proper Instructions (as such term is defined in Section 8
hereof) including, without limitation, Portfolio property (i) held by brokers,
private bankers or other entities on behalf of the Portfolio (each a "LOCAL
AGENT"), (ii) held by Special Sub-Custodians (as such term is defined in Section
6 hereof), (iii) held by entities which have advanced monies to or on behalf of
the Portfolio and which have received Portfolio property as security for such
advance(s) (each a "PLEDGEE"), or (iv) delivered or otherwise removed from the
custody of the Custodian (a) in connection with any Free Trade (as such term is
defined in Sections 2.2(14) and 2.6(7) hereof) or (b) pursuant to Special
Instructions (as such term is defined in Section 8 hereof). With respect to
uncertificated shares (the "UNDERLYING SHARES") of registered "investment
companies" (as defined in Section 3(a)(1) of the Investment Company Act of 1940,
as amended from time to time (the "1940 ACT")), whether in the same "group of
investment companies" (as defined in Section 12(d)(1)(G)(ii) of the 0000 Xxx) or
otherwise, including pursuant to Section 12(d)(1)(F) of the 1940 Act
(hereinafter sometimes referred to as the "UNDERLYING PORTFOLIOS") the holding
of confirmation statements that identify the shares as being recorded in the
Custodian's name on behalf of the Portfolios will be deemed custody for purposes
hereof.
Upon receipt of Proper Instructions, the Custodian shall on behalf of the
applicable Portfolio(s) from time to time employ one or more sub-custodians
located in the United States, but only in accordance with an applicable vote by
the Board of Trustees or the Board of Directors of the Fund (as appropriate, and
in each case, the "Board") on behalf of the applicable Portfolio(s), and
provided that the Custodian shall have no more or less responsibility or
liability to any Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian. The
Custodian may place and maintain each Fund's foreign securities with foreign
banking institution sub-custodians employed by the Custodian and/or foreign
securities depositories, all as designated in Schedules A and B hereto, but only
in accordance with the applicable provisions of Sections 3 and 4 hereof.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
PORTFOLIOS TO BE HELD IN THE UNITED STATES.
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States, including all domestic securities owned by such
Portfolio other than (a) securities which are maintained pursuant to Section 2.8
in a clearing agency which acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the Treasury (each, a "U.S.
SECURITIES SYSTEM") and (b) Underlying Shares owned by each Fund which are
maintained pursuant to Section 2.10 hereof in an account with State Street Bank
and Trust Company or such other entity which may from time to time act as a
transfer agent for the Underlying Portfolios and with respect to which the
Custodian is provided with Proper Instructions (the "UNDERLYING TRANSFER
AGENT").
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian, in a U.S.
Securities System account of the Custodian or in an account at the Underlying
Transfer Agent, only upon receipt of Proper Instructions on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio in
accordance with customary or established market practices and
procedures including those customarily utilized for beneficial holders
which are U.S. registered investment companies, including, without
limitation, delivery to the purchaser thereof or to a dealer therefor
(or an agent of such purchaser or dealer) against expectation of
receiving later payment;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
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6) To the issuer thereof, or its agent, for transfer into the name of the
Portfolio or into the name of any nominee or nominees of the Custodian
or into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against a receipt, for examination
in accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio (a) against receipt of collateral as agreed from time to
time by the Fund on behalf of the Portfolio, except that in connection
with any loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian will not be held liable or
responsible for the delivery of securities owned by the Portfolio
prior to the receipt of such collateral or (b) to the lending agent,
or the lending agent's custodian, in accordance with written Proper
Instructions (which may not provide for the receipt by the Custodian
of collateral therefor) agreed upon from time to time by the Custodian
and the Fund;
11) For delivery as security in connection with any borrowing by a Fund on
behalf of a Portfolio requiring a pledge of assets by the Fund on
behalf of such Portfolio;
12) For delivery in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the "EXCHANGE
ACT") and a member of the Financial Industry Regulatory Authority,
Inc. ("FINRA," formerly known as The National Association of
Securities Dealers, Inc.), 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 on behalf of a Portfolio;
13) For delivery in accordance with the provisions of any agreement among
a Fund on behalf of the Portfolio, the Custodian, and a futures
commission merchant registered under the Commodity Exchange Act,
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relating to compliance with the rules of the Commodity Futures Trading
Commission (the "CFTC") and/or any contract market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund on behalf of a Portfolio;
14) Upon the sale or other delivery of such investments (including,
without limitation, to one or more (a) Special Sub-Custodians or (b)
additional custodians appointed by the Fund, and communicated to the
Custodian from time to time via a writing duly executed by an
authorized officer of the Fund, for the purpose of engaging in
repurchase agreement transactions(s), each a "REPO CUSTODIAN"), and
prior to receipt of payment therefor, as set forth in written Proper
Instructions (such delivery in advance of payment, along with payment
in advance of delivery made in accordance with Section 2.6(7), as
applicable, shall each be referred to herein as a "FREE TRADE"),
provided that such Proper Instructions shall set forth (a) the
securities of the Portfolio to be delivered and (b) the person(s) to
whom delivery of such securities shall be made;
15) Upon receipt of instructions from the Fund's transfer agent (the
"TRANSFER AGENT") for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may be
described from time to time in the currently effective prospectus and
statement of additional information of the Fund related to the
Portfolio (the "PROSPECTUS"), in satisfaction of requests by holders
of Shares for repurchase or redemption;
16) In the case of a sale processed through the Underlying Transfer Agent
of Underlying Shares, in accordance with Section 2.10 hereof;
17) For delivery as initial or variation margin in connection with futures
or options on futures contracts entered into by the Fund on behalf of
the Portfolio; and
18) For any other purpose, but only upon receipt of Proper Instructions
from the Fund on behalf of the applicable Portfolio specifying (a) the
securities of the Portfolio to be delivered and (b) the person or
persons to whom delivery of such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of a Fund on behalf of the Portfolio or
of any nominee of the Custodian which nominee shall be assigned exclusively to
the Portfolio, unless the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered management investment
companies having the same investment adviser as the Portfolio, or in the name or
nominee name of any agent appointed pursuant to Section 2.7 or in the name or
nominee name of any sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of the Portfolio under the terms
of this Agreement shall be in "street name" or other good delivery form. If,
however, a Fund directs the Custodian to maintain securities in "street name",
the Custodian shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis only
of relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio of each Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Portfolio, other than
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cash maintained by the Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the 1940 Act. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the banking
department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the funds to be deposited
with each such bank or trust company shall on behalf of each applicable
Portfolio be approved by vote of a majority of the Board. Such funds shall be
deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Except with respect to Portfolio property
released and delivered pursuant to Section 2.2(14) or purchased pursuant to
Section 2.6(7), and subject to the provisions of Section 2.3, the Custodian
shall collect on a timely basis all income and other payments with respect to
registered domestic securities held hereunder to which each Portfolio shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent. Without limiting the
generality of the foregoing, the Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held hereunder. The
Custodian shall credit income to the Portfolio as such income is received or in
accordance with the Custodian's then current payable date income schedule. Any
credit to the Portfolio in advance of receipt may be reversed when the Custodian
determines that payment will not occur in due course and the Portfolio may be
charged at the Custodian's applicable rate for time credited. Income due each
Portfolio on securities loaned pursuant to the provisions of Section 2.2(10)
shall be the responsibility of the applicable Fund. The Custodian will have no
duty or responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Portfolio is properly entitled.
SECTION 2.6 PAYMENT OF FUND MONIES. The Custodian shall pay out monies of a
Portfolio as provided in Section 5 and otherwise upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall pay out
monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) in accordance with customary or established market practices
and procedures including those customarily utilized for beneficial
holders which are U.S. registered investment companies, including,
without limitation, delivering money to the seller thereof or to a
dealer therefor (or an agent for such seller or dealer) against
expectation of receiving later delivery of such securities or evidence
of title to such options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or trust company
doing business in the United States or abroad which is qualified under
the 1940 Act to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the case of
a purchase effected through a U.S. Securities System, in accordance
with the conditions set forth in Section 2.8 hereof; (c) in the case
of a purchase of Underlying Shares, in accordance with the conditions
set forth in Section 2.10 hereof; (d) in the case of repurchase
agreements entered into between the applicable Fund on behalf of a
Portfolio and the Custodian, or another bank, or a broker-dealer which
is a member of FINRA, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's account
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at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio of
securities owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from the
Portfolio; or (e) for transfer to a time deposit account of the Fund
in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined herein;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued as set forth in
Section 7 hereof;
4) For the payment of any expense or liability incurred by the Portfolio,
including but not limited to the following payments for the account of
the Portfolio: interest, taxes, management, accounting, transfer agent
and legal fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares declared pursuant to the
Fund's articles of incorporation or organization and by-laws or
agreement or declaration of trust, as applicable, and Prospectus
(collectively, "GOVERNING DOCUMENTS");
6) For payment of the amount of dividends received in respect of
securities sold short;
7) Upon the purchase of domestic investments including, without
limitation, repurchase agreement transactions involving delivery of
Portfolio monies to Repo Custodian(s), and prior to receipt of such
investments, as set forth in written Proper Instructions (such payment
in advance of delivery, along with delivery in advance of payment made
in accordance with Section 2.2(14), as applicable, shall each be
referred to herein as a "FREE TRADE"), provided that such Proper
Instructions shall also set forth (a) the amount of such payment and
(b) the person(s) to whom such payment is made;
8) For payment as initial or variation margin in connection with futures
or options on futures contracts entered into by the Fund on behalf of
the Portfolio; and
9) For any other purpose, but only upon receipt of Proper Instructions
from the Fund on behalf of the Portfolio specifying (a) the amount of
such payment and (b) the person or persons to whom such payment is to
be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as the Custodian
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder. The Underlying Transfer Agent shall not be deemed an agent or
sub-custodian of the Custodian for purposes of this Section 2.7 or any other
provision of this Agreement.
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SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System in compliance with the conditions of Rule 17f-4 under the 1940
Act, as amended from time to time.
SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions on behalf of each applicable Portfolio, establish and maintain a
segregated account or accounts for and on behalf of each such Portfolio, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.8
hereof, (a) in accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer registered under the
Exchange Act and a member of FINRA (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 CFTC or any registered contract market), or of any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio, (b) for purposes of segregating
cash or government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (c) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release No.
10666, or any subsequent release of the U.S. Securities and Exchange Commission
(the "SEC"), or interpretative opinion of the staff of the SEC, relating to the
maintenance of segregated accounts by registered management investment
companies, and (d) for any other purpose in accordance with Proper Instructions.
SECTION 2.10 DEPOSIT OF FUND ASSETS WITH THE UNDERLYING TRANSFER AGENT.
Underlying Shares beneficially owned by the Fund, on behalf of a Portfolio,
shall be deposited and/or maintained in an account or accounts maintained with
an Underlying Transfer Agent and the Custodian's only responsibilities with
respect thereto shall be limited to the following:
1) Upon receipt of a confirmation or statement from an Underlying
Transfer Agent that such Underlying Transfer Agent is holding or
maintaining Underlying Shares in the name of the Custodian (or a
nominee of the Custodian) for the benefit of a Portfolio, the
Custodian shall identify by book-entry that such Underlying Shares are
being held by it as custodian for the benefit of such Portfolio.
2) In respect of the purchase of Underlying Shares for the account of a
Portfolio, upon receipt of Proper Instructions, the Custodian shall
pay out monies of such Portfolio as so directed, and record such
payment from the account of such Portfolio on the Custodian's books
and records.
3) In respect of the sale or redemption of Underlying Shares for the
account of a Portfolio, upon receipt of Proper Instructions, the
Custodian shall transfer such Underlying Shares as so directed, record
such transfer from the account of such Portfolio on the Custodian's
books and records and, upon the Custodian's receipt of the proceeds
therefor, record such payment for the account of such Portfolio on the
Custodian's books and records.
The Custodian shall not be liable to the Fund for any loss or damage to the
Fund or any Portfolio resulting from the maintenance of Underlying Shares
with an Underlying Transfer Agent except for losses resulting directly from
the fraud, negligence or willful misconduct of the Custodian or any of its
agents or of any of its or their employees.
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SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in connection
with transfers of securities.
SECTION 2.12 PROXIES. Except with respect to Portfolio property released
and delivered pursuant to Section 2.2(14), or purchased pursuant to Section
2.6(7), the Custodian shall, with respect to the domestic securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of the
Portfolio or a nominee of the Portfolio, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to the
Fund such proxies, all proxy soliciting materials and all notices relating to
such securities.
SECTION 2.13 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Except with
respect to Portfolio property released and delivered pursuant to Section
2.2(14), or purchased pursuant to Section 2.6(7), and subject to the provisions
of Section 2.3, the Custodian shall transmit promptly to the applicable Fund for
each Portfolio all written information (including, without limitation, pendency
of calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
the Fund on behalf of the Portfolio and the maturity of futures contracts
purchased or sold by the Fund on behalf of the Portfolio) received by the
Custodian from issuers of the securities being held for the Portfolio. With
respect to tender or exchange offers, the Custodian shall transmit promptly to
the applicable Fund all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and from the party
(or its agents) making the tender or exchange offer. The Custodian shall not be
liable for any untimely exercise of any tender, exchange or other right or power
in connection with domestic securities or other property of the Portfolios at
any time held by it unless (i) the Custodian is in actual possession of such
domestic securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least three business days prior to the date on which the
Custodian is to take action to exercise such right or power. The Custodian shall
also transmit promptly to the applicable Fund for each Portfolio all written
information received by the Custodian regarding any class action or other
litigation in connection with Portfolio securities or other assets issued in the
United States and then held, or previously held, during the term of this
Agreement by the Custodian for the account of the Fund for such Portfolio,
including, but not limited to, opt-out notices and proof-of-claim forms. For
avoidance of doubt, upon and after the effective date of any termination of this
Agreement, with respect to a Fund or its Portfolio(s), as may be applicable, the
Custodian shall have no responsibility to so transmit any information under this
Section 2.13.
SECTION 3. PROVISIONS RELATING TO RULES 17F-5 AND 17F-7.
SECTION 3.1. DEFINITIONS. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
"COUNTRY RISK" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"ELIGIBLE FOREIGN CUSTODIAN" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
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action of the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 0000 Xxx) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act; the term does not include any Eligible Securities Depository.
"ELIGIBLE SECURITIES DEPOSITORY" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"FOREIGN ASSETS" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"FOREIGN CUSTODY MANAGER" has the meaning set forth in section (a)(3) of Rule
17f-5.
"RULE 17F-5" means Rule 17f-5 promulgated under the 1940 Act.
"RULE 17F-7" means Rule 17f-7 promulgated under the 1940 Act.
SECTION 3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. Each Fund,
by resolution adopted by its Board, hereby delegates to the Custodian, subject
to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2
with respect to Foreign Assets of the Portfolios held outside the United States,
and the Custodian hereby accepts such delegation as Foreign Custody Manager with
respect to the Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Agreement, which list of countries may be amended
from time to time by any Fund with the agreement of the Foreign Custody Manager.
The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets of the
Portfolios, which list of Eligible Foreign Custodians may be amended from time
to time in the sole discretion of the Foreign Custody Manager. The Foreign
Custody Manager will provide amended versions of Schedule A in accordance with
Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by each Fund, on behalf of the applicable
Portfolio(s), of the applicable account opening requirements for such country,
the Foreign Custody Manager shall be deemed to have been delegated by such
Fund's Board on behalf of such Portfolio(s) responsibility as Foreign Custody
Manager with respect to that country and to have accepted such delegation.
Execution of this Agreement by each Fund shall be deemed to be a Proper
Instruction to open an account, or to place or maintain Foreign Assets, in each
country listed on Schedule A. Following the receipt of Proper Instructions
directing the Foreign Custody Manager to close the account of a Portfolio with
the Eligible Foreign Custodian selected by the Foreign Custody Manager in a
designated country, the delegation by the Board on behalf of such Portfolio to
the Custodian as Foreign Custody Manager for that country shall be deemed to
have been withdrawn and the Custodian shall immediately cease to be the Foreign
Custody Manager with respect to such Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Forty-five days (or such longer period to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further
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responsibility in its capacity as Foreign Custody Manager to the Fund with
respect to the country as to which the Custodian's acceptance of delegation is
withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of
this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign
Assets in the care of the Eligible Foreign Custodian selected by the Foreign
Custody Manager in each country listed on Schedule A, as amended from time to
time. In performing its delegated responsibilities as Foreign Custody Manager to
place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation the factors specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager
shall determine that the contract governing the foreign custody arrangements
with each Eligible Foreign Custodian selected by the Foreign Custody Manager
will satisfy the requirements of Rule 17f-5(c)(2).
(c) MONITORING. In each case in which the Foreign Custody Manager maintains
Foreign Assets with an Eligible Foreign Custodian selected by the Foreign
Custody Manager, the Foreign Custody Manager shall establish a system to monitor
(i) the appropriateness of maintaining the Foreign Assets with such Eligible
Foreign Custodian and (ii) the contract governing the custody arrangements
established by the Foreign Custody Manager with the Eligible Foreign Custodian.
In the event the Foreign Custody Manager determines that the custody
arrangements with an Eligible Foreign Custodian it has selected are no longer
appropriate, the Foreign Custody Manager shall notify the Board in accordance
with Section 3.2.5 hereunder.
3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section 3.2, the Board shall be deemed to have considered and determined
to accept such Country Risk as is incurred by placing and maintaining the
Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the
placement of such Foreign Assets with another Eligible Foreign Custodian by
providing to the Board an amended Schedule A at the end of the calendar quarter
in which an amendment to such Schedule has occurred. The Foreign Custody Manager
shall make written reports notifying the Board of any other material change in
the foreign custody arrangements of the Portfolios described in this Section 3.2
reasonably promptly after the occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO. In
performing the responsibilities delegated to it, the Foreign Custody Manager
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of assets of management investment
companies registered under the 1940 Act would exercise.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody
Manager represents to each Fund that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5. Each Fund represents to the Custodian that its Board has
determined that it is reasonable for such Board to rely on the Custodian to
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perform the responsibilities delegated pursuant to this Agreement to the
Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY
MANAGER. Each Board's delegation to the Custodian as Foreign Custody Manager of
the Portfolios shall be effective as of the date hereof and shall remain in
effect until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty (30) days after receipt by the non-terminating party of such
notice. The provisions of Section 3.2.2 hereof shall govern the delegation to
and termination of the Custodian as Foreign Custody Manager of the Portfolios
with respect to designated countries.
SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the Fund
(or its duly-authorized investment manager or investment adviser) with an
analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or investment adviser) of any material change in such risks,
in accordance with section (a)(1)(i)(B) of Rule 17f-7.
3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.3.1.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE
PORTFOLIOS TO BE HELD OUTSIDE THE UNITED STATES.
SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the capitalized
terms set forth below shall have the indicated meanings:
"FOREIGN SECURITIES SYSTEM" means an Eligible Securities Depository listed on
Schedule B hereto.
"FOREIGN SUB-CUSTODIAN" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2. HOLDING SECURITIES. The Custodian shall identify on its books
as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii) to the extent permitted and customary in the market in which
the account is maintained, the Custodian shall require that securities so held
by the Foreign Sub-Custodian be held separately from any assets of such Foreign
Sub-Custodian or of other customers of such Foreign Sub-Custodian.
SECTION 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as
applicable, in such country.
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SECTION 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities
System account, only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:
(i) Upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded (including
those customarily utilized for beneficial holders which are U.S.
registered investment companies), including, without limitation: (A)
delivery against expectation of receiving later payment; or (B) in
the case of a sale effected through a Foreign Securities System, in
accordance with the rules governing the operation of the Foreign
Securities System;
(ii) In connection with any repurchase agreement related to foreign
securities;
(iii) To the depository agent in connection with tender or other similar
offers for foreign securities of the Portfolios;
(iv) To the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v) To the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian or such Foreign Sub-Custodian) or
for exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units;
(vi) To brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with market custom; provided that
in any such case, the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such foreign securities prior to receiving payment for such
foreign securities except as may arise from the Foreign
Sub-Custodian's own negligence or willful misconduct;
(vii) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;
(viii) In the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or temporary
securities for definitive securities;
(ix) For delivery as security in connection with any borrowing by a Fund
on behalf of a Portfolio requiring a pledge of assets by the Fund on
behalf of such Portfolio;
(x) In connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
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(xi) Upon the sale or other delivery of such foreign securities
(including, without limitation, to one or more Special
Sub-Custodians or Repo Custodians) as a Free Trade, provided that
applicable Proper Instructions shall set forth (A) the foreign
securities to be delivered and (B) the person or persons to whom
delivery shall be made;
(xii) In connection with the lending of foreign securities; and
(xiii) For any other purpose, but only upon receipt of Proper Instructions
specifying (A) the foreign securities to be delivered and (B) the
person or persons to whom delivery of such securities shall be made.
4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the
respective Foreign Securities System to pay out, monies of a Portfolio in the
following cases only:
(i) Upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by Proper Instructions, by (A) delivering money
to the seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery of
such foreign securities; or (B) in the case of a purchase effected
through a Foreign Securities System, in accordance with the rules
governing the operation of such Foreign Securities System;
(ii) In connection with the conversion, exchange or surrender of foreign
securities of the Portfolio;
(iii) For the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees under
this Agreement, legal fees, accounting fees, and other operating
expenses;
(iv) For the purchase or sale of foreign exchange or foreign exchange
contracts for the Portfolio, including transactions executed with or
through the Custodian or its Foreign Sub-Custodians;
(v) In connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) Upon the purchase of foreign investments including, without
limitation, repurchase agreement transactions involving delivery of
Portfolio monies to Repo Custodian(s), as a Free Trade, provided
that applicable Proper Instructions shall set forth (A) the amount
of such payment and (B) the person or persons to whom payment shall
be made;
(vii) For payment of part or all of the dividends received in respect of
securities sold short;
(viii) In connection with the borrowing or lending of foreign securities;
and
(ix) For any other purpose, but only upon receipt of Proper Instructions
specifying (A) the amount of such payment and (B) the person or
persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Foreign Assets received
for the account of the Portfolios and delivery of
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Foreign Assets maintained for the account of the Portfolios may be effected in
accordance with the customary established securities trading or processing
practices and procedures in the country or market in which the transaction
occurs (including those customarily utilized for beneficial holders which are
U.S. registered investment companies), including, without limitation, delivering
Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) with the expectation of receiving later payment for
such Foreign Assets from such purchaser or dealer.
The Custodian shall provide to each Board the information with respect to
custody and settlement practices in countries in which the Custodian employs a
Foreign Sub-Custodian described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in a Board being provided with
substantively less information than had been previously provided hereunder.
SECTION 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of the Custodian or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and the applicable Fund on behalf of such
Portfolio agrees to hold any such nominee harmless from any liability as a
holder of record of such foreign securities. The Custodian or a Foreign
Sub-Custodian shall not be obligated to accept securities on behalf of a
Portfolio under the terms of this Agreement unless the form of such securities
and the manner in which they are delivered are in accordance with reasonable
market practice.
SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as
belonging to the applicable Fund cash (including cash denominated in foreign
currencies) deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of, cash on the
books of the Custodian, a bank account or bank accounts shall be opened and
maintained outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian. All accounts referred to in this Section shall be subject only to
draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian)
acting pursuant to the terms of this Agreement to hold cash received by or from
or for the account of the Portfolio. Cash maintained on the books of the
Custodian (including its branches, subsidiaries and affiliates), regardless of
currency denomination, is maintained in bank accounts established under, and
subject to the laws of, The Commonwealth of Massachusetts.
SECTION 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled. In the
event that extraordinary measures are required to collect such income, the Fund
and the Custodian shall consult as to such measures and as to the compensation
and expenses of the Custodian relating to such measures. The Custodian shall
credit income to the applicable Portfolio as such income is received or in
accordance with Custodian's then current payable date income schedule. Any
credit to the Portfolio in advance of receipt may be reversed when the Custodian
determines that payment will not occur in due course and the Portfolio may be
charged at the Custodian's applicable rate for time credited. Income on
securities loaned other than from the Custodian's securities lending program
shall be credited as received.
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Section 4, the Custodian shall use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. Each Fund acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
lack of
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notice and other factors may have the effect of severely limiting the ability of
such Fund to exercise shareholder rights.
SECTION 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian
shall transmit promptly to the applicable Fund written information with respect
to materials received by the Custodian via the Foreign Sub-Custodians from
issuers of the foreign securities being held for the account of the Portfolios
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith). With respect to
tender or exchange offers, the Custodian shall transmit promptly to the
applicable Fund written information with respect to materials so received by the
Custodian from issuers of the foreign securities whose tender or exchange is
sought or from the party (or its agents) making the tender or exchange offer.
The Custodian shall not be liable for any untimely exercise of any tender,
exchange or other right or power in connection with foreign securities or other
property of the Portfolios at any time held by it unless (i) the Custodian or
the respective Foreign Sub-Custodian is in actual possession of such foreign
securities or property and (ii) the Custodian receives Proper Instructions with
regard to the exercise of any such right or power, and both (i) and (ii) occur
at least three business days prior to the date on which the Custodian is to take
action to exercise such right or power. The Custodian shall also transmit
promptly to the applicable Fund all written information received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of the Portfolios regarding any class action or other
litigation in connection with Portfolio foreign securities or other assets
issued outside the United States and then held, or previously held, during the
term of this Agreement by the Custodian via a Foreign Sub-Custodian for the
account of the Fund for such Portfolio, including, but not limited to, opt-out
notices and proof-of-claim forms. For avoidance of doubt, upon and after the
effective date of any termination of this Agreement, with respect to a Fund or
its Portfolio(s), as may be applicable, the Custodian shall have no
responsibility to so transmit any information under this Section 4.9.
SECTION 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant
to which the Custodian employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising out
of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At a Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Portfolios have not been made
whole for any such loss, damage, cost, expense, liability or claim.
SECTION 4.11 TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on any Fund, the
Portfolios or the Custodian as custodian of the Portfolios by the tax law of the
United States or of any state or political subdivision thereof. It shall be the
responsibility of each Fund to notify the Custodian of the obligations imposed
on such Fund with respect to the Portfolios or the Custodian as custodian of the
Portfolios by the tax law of countries other than those mentioned in the above
sentence, including responsibility for withholding and other taxes, assessments
or other governmental charges, certifications and governmental reporting. The
sole responsibilities of the Custodian with regard to such tax law shall be to
use reasonable efforts to effect the withholding of local taxes and related
charges with regard to market entitlements/payments in accordance with local law
and subject to local market practice or custom, and to assist the Fund with
respect to any claim for exemption or refund under the tax law of countries for
which such Fund has provided such information. Except as specifically provided
in this Agreement or otherwise agreed to in writing by the Custodian, the
Custodian shall have no independent obligation to determine the tax obligations
now or hereafter imposed on any of the Funds by any taxing authority or to
obtain or provide information relating thereto, and shall have no obligation or
liability with
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respect to such tax obligations, it being specifically understood and agreed
that the Custodian shall not thereby or otherwise be considered any Fund's tax
advisor or tax counsel.
SECTION 4.12. LIABILITY OF CUSTODIAN. The Custodian shall be liable for the
acts or omissions of a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally in this Agreement and, regardless of
whether assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, the Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism, or any other
loss where the Sub-Custodian has otherwise acted with reasonable care.
SECTION 5. CONTRACTUAL SETTLEMENT SERVICES (PURCHASE / SALES).
SECTION 5.1 The Custodian shall, in accordance with the terms set out in
this section, debit or credit the appropriate cash account of each Portfolio in
connection with (i) the purchase of securities for such Portfolio, and (ii)
proceeds of the sale of securities held on behalf of such Portfolio, on a
contractual settlement basis.
SECTION 5.2 The services described above (the "CONTRACTUAL SETTLEMENT
SERVICES") shall be provided for such instruments and in such markets as the
Custodian may advise from time to time. The Custodian may terminate or suspend
any part of the provision of the Contractual Settlement Services under this
Agreement at its sole discretion immediately upon notice to the applicable Fund
on behalf of each Portfolio, including, without limitation, in the event of
force majeure events affecting settlement, any disorder in markets, or other
changed external business circumstances affecting the markets or the Fund.
SECTION 5.3 The consideration payable in connection with a purchase
transaction shall be debited from the appropriate cash account of the Portfolio
as of the time and date that monies would ordinarily be required to settle such
transaction in the applicable market. The Custodian shall promptly recredit such
amount at the time that the Portfolio or the Fund notifies the Custodian by
Proper Instruction that such transaction has been canceled.
SECTION 5.4 With respect to the settlement of a sale of securities, a
provisional credit of an amount equal to the net sale price for the transaction
(the "SETTLEMENT AMOUNT") shall be made to the account of the Portfolio as if
the Settlement Amount had been received as of the close of business on the date
that monies would ordinarily be available in good funds in the applicable
market. Such provisional credit will be made conditional upon the Custodian
having received Proper Instructions with respect to, or reasonable notice of,
the transaction, as applicable; and the Custodian or its agents having
possession of the asset(s) (which shall exclude assets subject to any third
party lending arrangement entered into by a Portfolio) associated with the
transaction in good deliverable form and not being aware of any facts which
would lead them to believe that the transaction will not settle in the time
period ordinarily applicable to such transactions in the applicable market.
SECTION 5.5. Simultaneously with the making of such provisional credit, the
Portfolio agrees that the Custodian shall have, and hereby grants to the
Custodian, a security interest in any property at any time held for the account
of the Portfolio to the full extent of the credited amount, and each Portfolio
hereby pledges, assigns and grants to the Custodian a continuing security
interest and a lien on any and all such property under the Custodian's
possession, in accordance with the terms of this Agreement. In the event that
the applicable Portfolio fails to promptly repay any provisional credit, the
Custodian shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code of The Commonwealth of Massachusetts.
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SECTION 5.6 The Custodian shall have the right to reverse any provisional
credit or debit given in connection with the Contractual Settlement Services at
any time when the Custodian believes, in its reasonable judgment, that such
transaction will not settle in accordance with its terms or amounts due pursuant
thereto, will not be collectable or where the Custodian has not been provided
Proper Instructions with respect thereto, as applicable, and the Portfolio shall
be responsible for any costs or liabilities resulting from such reversal. Upon
such reversal, a sum equal to the credited or debited amount shall become
immediately payable by the Portfolio to the Custodian and may be debited from
any cash account held for benefit of the Portfolio.
SECTION 5.7 In the event that the Custodian is unable to debit an account
of the Portfolio, and the Portfolio fails to pay any amount due to the Custodian
at the time such amount becomes payable in accordance with this Agreement, (i)
the Custodian may charge the Portfolio for costs and expenses associated with
providing the provisional credit, including without limitation the cost of funds
associated therewith, (ii) the amount of any accrued dividends, interest and
other distributions with respect to assets associated with such transaction may
be set off against the credited amount, (iii) the provisional credit and any
such costs and expenses shall be considered an advance of cash for purposes of
the Agreement and (iv) the Custodian shall have the right to setoff against any
property and to sell, exchange, convey, transfer or otherwise dispose of any
property at any time held for the account of the Portfolio to the full extent
necessary for the Custodian to make itself whole.
SECTION 6. LOAN SERVICING PROVISIONS
SECTION 6.1. GENERAL. The following provisions shall apply with respect to
investments, property or assets in the nature of loans, or interests or
participations in loans, including without limitation interests in syndicated
bank loans and bank loan participations, whether in the U.S. or outside the
U.S.(collectively, "Loans") entered into by a Fund on behalf of one or more of
its Portfolios (referred to in this Section 5 as the "Fund").
SECTION 6.2. SAFEKEEPING. Instruments, certificates, agreements and/or
other documents which the Custodian may receive with respect to Loans, if any
(collectively "FINANCING DOCUMENTS"), from time to time, shall be held by the
Custodian at its offices in Boston, Massachusetts.
SECTION 6.3. DUTIES OF THE CUSTODIAN. The Custodian shall accept such
Financing Documents, if any, with respect to Loans as may be delivered to it
from time to time by the Fund. The Custodian shall be under no obligation to
examine the contents or determine the sufficiency of any such Financing
Documents or to provide any certification with respect thereto, whether received
by the Custodian as original documents, photocopies, by facsimile or otherwise.
Without limiting the foregoing, the Custodian is under no duty to examine any
such Financing Documents to determine whether necessary steps have been taken or
requirements met with respect to the assignment or transfer of the related Loan
or applicable interest or participation in such Loan. The Custodian shall be
entitled to assume the genuineness, sufficiency and completeness of any
Financing Documents received, and the genuineness and due authority of any
signature appearing on such documents. Notwithstanding any term of this
Agreement to the contrary, with respect to any Loans, (i) the Custodian shall be
under no obligation to determine, and shall have no liability for, the
sufficiency of, or to require delivery of, any instrument, document or agreement
constituting, evidencing or representing such Loan, other than to receive such
Financing Documents, if any, as may be delivered or caused to be delivered to it
by the Fund (or its investment manager acting on its behalf), (ii) without
limiting the generality of the foregoing, delivery of any such Loan (including
without limitation, for purposes of Section 2.6 above) may be made to the
Custodian by, and may be represented solely by, delivery to the Custodian of a
facsimile or photocopy of an assignment agreement (an "ASSIGNMENT AGREEMENT") or
a confirmation or certification from the Fund (or the investment manager) to the
effect that it has acquired such Loan and/or has received or will receive, and
will deliver to the
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Custodian, appropriate Financing Documents constituting, evidencing or
representing such Loan (such confirmation or certification, together with any
Assignment Agreement, collectively, an " ASSIGNMENT AGREEMENT OR CONFIRMATION
"), in any case without delivery of any promissory note, participation
certificate or similar instrument (collectively, an "INSTRUMENT"), (iii) if an
original Instrument shall be or shall become available with respect to any such
Loan, it shall be the sole responsibility of the Fund (or the investment manager
acting on its behalf) to make or cause delivery thereof to the Custodian, and
the Custodian shall be under no obligation at any time or times to determine
whether any such original Instrument has been issued or made available with
respect to such Loan, and shall not be under any obligation to compel compliance
by the Fund to make or cause delivery of such Instrument to the Custodian, and
(iv) any reference to Financing Documents appearing in this Section 5 shall be
deemed to include, without limitation, any such Instrument and/or Assignment
Agreement or Confirmation.
If payments with respect to a Loan ("LOAN PAYMENT") are not received by the
Custodian on the date on which they are due, as reflected in the Payment
Schedule (as such term is defined in Section 5.4 below) of the Loan ("PAYMENT
DATE"), or in the case of interest payments, not received either on a scheduled
interest payable date, as reported to the Custodian by the Fund (or the
investment manager acting on its behalf) for the Loan (the "INTEREST PAYABLE
DATE"), or in the amount of their accrued interest payable, the Custodian shall
promptly, but in no event later than one business day after the Payment Date or
the Interest Payable Date, give telephonic notice to the party obligated under
the Financing Documents to make such Loan Payment (the "OBLIGOR") of its failure
to make timely payment, and (2) if such payment is not received within three
business days of its due date, shall notify the Fund (or the investment manager
on its behalf) of such Obligor's failure to make the Loan Payment. The Custodian
shall have no responsibility with respect to the collection of Loan Payments
which are past due, other than the duty to notify the Obligor and the Fund (or
the investment manager acting on its behalf) as provided herein.
The Custodian shall have no responsibilities or duties whatsoever under
this Agreement, with respect to Loans or the Financing Documents, except for
such responsibilities as are expressly set forth herein. Without limiting the
generality of the foregoing, the Custodian shall have no obligation to preserve
any rights against prior parties or to exercise any right or perform any
obligation in connection with the Loans or any Financing Documents (including,
without limitation, no obligation to take any action in respect of or upon
receipt of any consent solicitation, notice of default or similar notice
received from any bank agent or Obligor, except that the Custodian shall
undertake reasonable efforts to forward any such notice to the Fund or the
investment manager acting on its behalf). In case any question arises as to its
duties hereunder, the Custodian may request instructions from the Fund and shall
be entitled at all times to refrain from taking any action unless it has
received Proper Instructions from the Fund or the investment manager and the
Custodian shall in all events have no liability, risk or cost for any action
taken, with respect to a Loan, pursuant to and in compliance with the Proper
Instructions of such parties.
The Custodian shall be only responsible and accountable for Loan Payments
actually received by it and identified as for the account of the Fund; any and
all credits and payments credited to the Fund, with respect to Loans, shall be
conditional upon clearance and actual receipt by the Custodian of final payment
thereon.
The Custodian shall promptly, upon the Fund's request, release to the
Fund's investment manager or to any party as the Fund or the Fund's investment
manager may specify, any Financing Documents being held on behalf of the Fund.
Without limiting the foregoing, the Custodian shall not be deemed to have or be
charged with knowledge of the sale of any Loan, unless and except to the extent
it shall
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have received written notice and instruction from the Fund (or the investment
manager acting on its behalf) with respect thereto, and except to the extent it
shall have received the sale proceeds thereof.
In no event shall the Custodian be under any obligation or liability to
make any advance of its own funds with respect to any Loan.
SECTION 6.4. RESPONSIBILITY OF THE FUND. With respect to each Loan held by
the Custodian hereunder in accordance with the provisions hereof, the Fund shall
(a) cause the Financing Documents evidencing such Loan to be delivered to the
Custodian; (b) include with such Financing Documents an amortization schedule of
payments (the "PAYMENT SCHEDULE") identifying the amount and due dates of
scheduled principal payments, the Interest Payable Date(s) and related payment
amount information, and such other information with respect to the related Loan
and Financing Documents as the Custodian reasonably may require in order to
perform its services hereunder (collectively, "LOAN INFORMATION"), in such form
and format as the Custodian reasonably may require; (c) take, or cause the
investment manager to take, all actions necessary to acquire good title to such
Loan (or the participation in such Loan, as the case may be), as and to the
extent intended to be acquired; and (d) cause the Custodian to be named as its
nominee for payment purposes under the Financing Documents or otherwise provide
for the direct payment of the Payments to the Custodian. The Custodian shall be
entitled to rely upon the Loan Information provided to it by the Fund (or the
investment manager acting on its behalf) without any obligation on the part of
the Custodian independently to verify, investigate, recalculate, update or
otherwise confirm the accuracy or completeness thereof; and the Custodian shall
have no liability for any delay or failure on the part of the Fund in providing
necessary Loan Information to the Custodian, or for any inaccuracy therein or
incompleteness thereof. With respect to each such Loan, the Custodian shall be
entitled to rely on any information and notices it may receive from time to time
from the related bank agent, Obligor or similar party with respect to the
related Loan, and shall be entitled to update its records on the basis of such
information or notices received, without any obligation on its part
independently to verify, investigate or recalculate such information.
SECTION 6.5. INSTRUCTIONS; AUTHORITY TO ACT. The certificate of the
Secretary or an Assistant Secretary of a Fund, identifying certain individuals
approved by the Fund's Board to be officers of the Fund or employees of the
Fund's investment manager and authorized to sign any such instructions, may be
received and accepted as conclusive evidence of the incumbency and authority of
such to act and may be considered by the Custodian to be in full force and
effect until it receives written notice to the contrary from the Secretary or
Assistant Secretary of the Fund. Notwithstanding any other provision of this
Agreement, the Custodian shall have no responsibility to ensure that any
investment by the Fund with respect to Loans has been authorized.
SECTION 6.6. ATTACHMENT. In case any portion of the Loans or the Financing
Documents shall be attached or levied upon pursuant to an order of court, or the
delivery or disbursement thereof shall be stayed or enjoined by an order of
court, or any other order, judgment or decrees shall be made or entered by any
court affecting the property of the Fund or any act of the Custodian relating
thereto, the Custodian is hereby expressly authorized in its sole discretion to
obey and comply with all orders, judgments or decrees so entered or issued,
without the necessity of inquire whether such court had jurisdiction, and, in
case the Custodian obeys or complied with any such order, judgment or decree, it
shall not be liable to anyone by reason of such compliance.
SECTION 7. SPECIAL SUB-CUSTODIANS.
Upon receipt of Special Instructions (as such term is defined in Section 8
hereof), the Custodian shall, on behalf of one or more Portfolios, appoint one
or more banks, trust companies or other entities designated in such Special
Instructions to act as a sub-custodian for the purposes of effecting such
transaction(s) as may be
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designated by a Fund in Special Instructions. Each such designated sub-custodian
is referred to herein as a "SPECIAL SUB-CUSTODIAN." Each such duly appointed
Special Sub-Custodian shall be listed on Schedule D hereto, as it may be amended
from time to time by a Fund, with the acknowledgment of the Custodian. In
connection with the appointment of any Special Sub-Custodian, and in accordance
with Special Instructions, the Custodian shall enter into a sub-custodian
agreement with the Fund and the Special Sub-Custodian in form and substance
approved by such Fund, provided that such agreement shall in all events comply
with the provisions of the 1940 Act and the rules and regulations thereunder and
the terms and provisions of this Agreement.
SECTION 8. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES.
The Custodian shall receive from the distributor of the Shares or from the
Transfer Agent and deposit into the account of the appropriate Portfolio such
payments as are received for Shares thereof issued or sold from time to time by
the applicable Fund. The Custodian will provide timely notification to such Fund
on behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
From such funds as may be available for the purpose, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by a Fund to the holder
of Shares, when presented to the Custodian in accordance with such procedures
and controls as are mutually agreed upon from time to time between such Fund and
the Custodian.
SECTION 9. PROPER INSTRUCTIONS AND SPECIAL INSTRUCTIONS.
"PROPER INSTRUCTIONS," which may also be standing instructions, as such term is
used throughout this Agreement shall mean instructions received by the Custodian
from a Fund, a Fund's duly authorized investment manager or investment adviser,
or a person or entity duly authorized by either of them. Such instructions may
be in writing signed by the authorized person or persons or may be in a tested
communication or in a communication utilizing access codes effected between
electro-mechanical or electronic devices or may be by such other means and
utilizing such intermediary systems and utilities as may be agreed from time to
time by the Custodian and the person(s) or entity giving such instruction,
provided that the Fund has followed any security procedures agreed to from time
to time by the applicable Fund and the Custodian including, but not limited to,
the security procedures selected by the Fund via the form of Funds Transfer
Addendum hereto, the terms of which are hereby agreed to. Oral instructions will
be considered Proper Instructions if the Custodian reasonably believes them to
have been given by a person authorized to provide such instructions with respect
to the transaction involved; the Fund shall cause all oral instructions to be
confirmed in writing. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any multi-party
agreement which requires a segregated asset account in accordance with Section
2.9 hereof.
"SPECIAL INSTRUCTIONS," as such term is used throughout this Agreement, means
Proper Instructions countersigned or confirmed in writing by the Treasurer or
any Assistant Treasurer of the applicable Fund or any other person designated in
writing by the Treasurer of such Fund, which countersignature or confirmation
shall be (a) included on the same instrument containing the Proper Instructions
or on a separate instrument clearly relating thereto and (b) delivered by hand,
by facsimile transmission, or in such other manner as the Fund and the Custodian
agree in writing.
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Concurrently with the execution of this Agreement, and from time to time
thereafter, as appropriate, each Fund shall deliver to the Custodian, duly
certified by such Fund's Treasurer or Assistant Treasurer, a certificate setting
forth: (i) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Fund and (ii) the names,
titles and signatures of those persons authorized to give Special Instructions.
Such certificate may be accepted and relied upon by the Custodian as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until receipt by the Custodian of a similar certificate to the
contrary.
SECTION 10. EVIDENCE OF AUTHORITY.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the applicable
Fund. The Custodian may receive and accept a copy of a resolution certified by
the Secretary or an Assistant Secretary of any Fund as conclusive evidence (a)
of the authority of any person to act in accordance with such resolution or (b)
of any determination or of any action by the applicable Board as described in
such resolution, and such resolution may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
SECTION 11. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY.
The Custodian may in its discretion, without express authority from the
applicable Fund on behalf of each applicable Portfolio:
1) Make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement; provided that all such payments shall be accounted for to the
Fund on behalf of the Portfolio;
2) Surrender securities in temporary form for securities in definitive
form;
3) Endorse for collection, in the name of the Portfolio, checks, drafts and
other negotiable instruments; and
4) In general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise
directed by the applicable Board.
SECTION 12. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the applicable Board to keep the books of
account of each Portfolio and/or compute the net asset value per Share of the
outstanding Shares or, if directed in writing to do so by a Fund on behalf of a
Portfolio, shall itself keep such books of account and/or compute such net asset
value per Share. If so directed, the Custodian shall also calculate daily the
net income of the Portfolio as described in the Prospectus and shall advise the
Fund and the Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its
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various components. Each Fund acknowledges and agrees that, with respect to
investments maintained with the Underlying Transfer Agent, the Underlying
Transfer Agent is the sole source of information on the number of shares of a
fund held by it on behalf of a Portfolio and that the Custodian has the right to
rely on holdings information furnished by the Underlying Transfer Agent to the
Custodian in performing its duties under this Agreement, including without
limitation, the duties set forth in this Section 11 and in Section 12 hereof;
provided, however, that the Custodian shall be obligated to reconcile
information as to purchases and sales of Underlying Shares contained in trade
instructions and confirmations received by the Custodian and to report promptly
any discrepancies to the Underlying Transfer Agent. The calculations of the net
asset value per Share and the daily income of each Portfolio shall be made at
the time or times described from time to time in the Prospectus. Each Fund
acknowledges that, in keeping the books of account of the Portfolio and/or
making the calculations described herein with respect to Portfolio property
released and delivered pursuant to Section 2.2(14), or purchased pursuant to
Section 2.6(7) hereof, the Custodian is authorized and instructed to rely upon
information provided to it by the Fund, the Fund's counterparty(ies), or the
agents of either of them.
SECTION 13. RECORDS.
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Agreement in such
manner as will meet the obligations of each Fund under the 1940 Act, with
particular attention to section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of such Fund and employees and agents
of the SEC. The Custodian shall, at a Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations. Each Fund acknowledges that, in creating and maintaining the
records as set forth herein with respect to Portfolio property released and
delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7)
hereof, the Custodian is authorized and instructed to rely upon information
provided to it by the Fund, the Fund's counterparty(ies), or the agents of
either of them.
SECTION 14. OPINION OF FUND'S INDEPENDENT ACCOUNTANT.
The Custodian shall take all reasonable action, as a Fund with respect to a
Portfolio may from time to time request, to obtain from year to year favorable
opinions from the Fund's independent accountants with respect to its activities
hereunder in connection with the preparation of the Fund's Form N-1A or Form
N-2, as applicable, and Form N-SAR or other annual reports to the SEC and with
respect to any other requirements thereof.
SECTION 15. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS.
The Custodian shall provide the applicable Fund, on behalf of each of the
Portfolios at such times as such Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities System or a Foreign Securities System (either, a
"SECURITIES SYSTEM"), relating to the services provided by the Custodian under
this Agreement; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such examination,
and, if there are no such inadequacies, the reports shall so state.
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SECTION 16. COMPENSATION OF CUSTODIAN.
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between each Fund on
behalf of each applicable Portfolio and the Custodian.
SECTION 17. RESPONSIBILITY OF CUSTODIAN.
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to be signed by the proper party or parties, including any futures
commission merchant acting pursuant to the terms of a three-party futures or
options agreement. The Custodian shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement, but shall be kept
indemnified by and shall be without liability to any Fund for any action taken
or omitted by it in good faith without negligence, including, without
limitation, acting in accordance with any Proper Instruction. It shall be
entitled to rely on and may act upon the advice of counsel experienced in the
pertinent area of law (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice, provided, however, with respect to the performance of any action
or omission of any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth in this section. The Custodian shall
be without liability to any Fund or Portfolio for any loss, liability, claim or
expense resulting from or caused by anything that is part of Country Risk (as
defined in Section 3 hereof), including without limitation nationalization,
expropriation, currency restrictions, insolvency of a Foreign Sub-custodian,
acts of war, revolution, riots or terrorism.
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, the Custodian
shall be without liability to any Fund for any loss, liability, claim or expense
resulting from or caused by: (i) events or circumstances beyond the reasonable
control of the Custodian or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by any Fund or
its duly authorized investment manager or investment adviser in their
instructions to the Custodian provided such instructions have been in accordance
with this Agreement; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any act or omission of a Special Sub-Custodian
including, without limitation, reliance on reports prepared by a Special
Sub-Custodian; (v) any delay or failure of any broker, agent or intermediary,
central bank or other commercially prevalent payment or clearing system to
deliver to the Custodian's sub-custodian or agent securities purchased or in the
remittance or payment made in connection with securities sold; (vi) any delay or
failure of any company, corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, any Fund, the Custodian's
sub-custodians, nominees or agents or any consequential losses arising out of
such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vii) delays or
inability to perform its duties due to any disorder in market infrastructure
with respect to any particular security or Securities System; and (viii) any
provision of any present or future law or regulation or order of the United
States of America, or any state thereof, or any other country, or political
subdivision thereof or of any court of competent jurisdiction. The Custodian
shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same
extent as set forth with respect to sub-custodians generally in this Agreement.
If a Fund on behalf of a Portfolio requires the Custodian to take any action
with respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to the Fund or the Portfolio being liable for the payment of
money or
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incurring liability of some other form, such Fund on behalf of the Portfolio, as
a prerequisite to requiring the Custodian to take such action, shall provide
indemnity to the Custodian in an amount and form satisfactory to it.
If a Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement), or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
or if a Fund fails to compensate the Custodian pursuant to Section 15 hereof,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
Except as may arise from the Custodian's own negligence or willful misconduct,
each Fund shall indemnify and hold the Custodian harmless from and against any
and all costs, expenses, losses, damages, charges, counsel fees, payments and
liabilities which may be asserted against the Custodian (a) acting in accordance
with any Proper Instruction or Special Instruction including, without
limitation, any Proper Instruction with respect to Free Trades including, but
not limited to, cost, expense, loss, damage, liability, tax, charge, assessment
or claim resulting from (i) the failure of the applicable Fund to receive income
with respect to purchased investments, (ii) the failure of the applicable Fund
to recover amounts invested on maturity of purchased investments, (iii) the
failure of the Custodian to respond to or be aware of notices or other corporate
communications with respect to purchased investments, or (iv) the Custodian's
reliance upon information provided by the applicable Fund, such Fund's
counterparty(ies) or the agents of either of them with respect to Fund property
released, delivered or purchased pursuant to either of Section 2.2(14) or
Section 2.6(7) hereof; (b) for the acts or omissions of any Special
Sub-Custodian; or (c) for the acts or omissions of any Local Agent or Pledgee.
In the event of equipment failure, work stoppage, governmental action,
communication disruption or other impossibility of performance beyond the
Custodian's control, the Custodian shall take reasonable steps to minimize
service interruptions. The Custodian shall enter into and shall maintain in
effect, at all times during the term of this Agreement, with appropriate parties
one or more agreements making reasonable provision for (i) periodic back-up of
the computer files and data with respect to the Funds; and (ii) emergency use of
electronic data processing equipment to provide services under this Agreement.
Upon reasonable request, the Custodian shall discuss with senior management of
the Funds such disaster recovery plan and/or provide a high-level presentation
summarizing such plan.
In no event shall the Custodian be liable for indirect, special or consequential
damages.
SECTION 18. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be 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 sixty (60) days
after the date of such delivery or mailing; provided, however, that no Fund
shall amend or terminate this Agreement in contravention of any applicable
federal or state regulations, or any provision of such Fund's Governing
Documents, and further provided, that any Fund on behalf of one or more of the
Portfolios may at any time by action of its Board (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
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Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Termination of this Agreement with respect to any one particular Fund or
Portfolio shall in no way affect the rights and duties under this Agreement with
respect to any other Fund or Portfolio.
Upon termination of the Agreement, the applicable Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements. The provisions of Sections 4.11, 16
(as to amounts due up until the termination), 17 and 21.12 of this Agreement
shall survive termination of this Agreement for any reason.
SECTION 19. SUCCESSOR CUSTODIAN.
If a successor custodian for one or more Portfolios shall be appointed by the
applicable Board, the Custodian shall, upon termination and receipt of Proper
Instructions, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System or at the Underlying Transfer Agent. The Custodian shall
also provide to the successor custodian a Fund's records (as described in
Section 12 of this Agreement) as reasonably requested by the Fund.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of Proper Instructions, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such resolution.
In the event that no Proper Instructions designating a successor custodian or
alternative arrangements shall have been delivered to the Custodian on or before
the date when such termination shall become effective, then the Custodian shall
have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in Boston, Massachusetts or New York,
New York, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian on
behalf of each applicable Portfolio and all instruments held by the Custodian
relative thereto and all other property held by it under this Agreement on
behalf of each applicable Portfolio, and to transfer to an account of such
successor custodian all of the securities of each such Portfolio held in any
Securities System or at the Underlying Transfer Agent. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of any Fund to provide Proper Instructions as aforesaid, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Agreement relating to the duties and obligations of
the Custodian shall remain in full force and effect.
SECTION 20. AUDIT RIGHTS; ADDITIONAL SUB-CERTIFICATIONS AND REPORTS
SECTION 20.1 AUDIT RIGHTS. TO the extent required by applicable law, rule
or regulation and upon request of a Fund (which shall include reasonable advance
notice), the Custodian shall allow such Fund's regulators or supervisory
authorities to perform periodic on-site audits as may be reasonably required to
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examine the Custodian's performance of the services contemplated by this
Agreement (the "SERVICES"). Notwithstanding the foregoing, prior to the
performance of any audits of the Custodian's performance of the Services, the
Fund will request that such regulator or supervisory authority to the extent
possible shall coordinate such audit through the Custodian's primary regulator,
the United States Federal Reserve Bank of Boston. Nothing contained in this
section shall obligate the Custodian to provide access to or otherwise disclose:
(i) any information that is unrelated to the relevant Fund and the provision of
the Services to such Fund; (ii) any information that is treated as confidential
under the Custodian's corporate policies, including, without limitation,
internal audit reports, compliance or risk management plans or reports, work
papers and other reports and information relating to management functions; or
(iii) any other documents, reports or other information that the Custodian is
obligated to maintain in confidence as a matter of law or regulation. In
addition, any access provided hereunder to technology shall be limited to a
demonstration by the Custodian of the functionality thereof and a reasonable
opportunity to communicate with the Custodian's personnel regarding such
technology.
SECTION 20.2 ADDITIONAL SUB-CERTIFICATIONS AND REPORTS. The Custodian shall
provide to the Funds: (a) sub-certifications in connection with Xxxxxxxx-Xxxxx
Act of 2002 certification requirements; and (b) periodic reports and reasonable
documentation for delivery to the Funds' Chief Compliance Officer in connection
with Rule 38a-l under the 1940 Act with respect to the Services and the
Custodian's compliance with its operating policies and procedures related
thereto.
SECTION 21. GENERAL.
SECTION 21.1 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed
and the provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
SECTION 21.2 PRIOR AGREEMENTS. This Agreement supersedes and terminates, as
of the date hereof, all prior agreements between each Fund on behalf of each of
the Portfolios and the Custodian relating to the custody of such Fund's assets.
SECTION 21.3 ASSIGNMENT. This Agreement may not be assigned by (a) any Fund
without the written consent of the Custodian or (b) by the Custodian without the
written consent of each applicable Fund.
SECTION 21.4 INTERPRETIVE AND ADDITIONAL PROVISIONS. In connection with the
operation of this Agreement, the Custodian and each Fund on behalf of each of
the Portfolios, may from time to time agree on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by all parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
a Fund's Governing Documents. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
SECTION 21.5 ADDITIONAL FUNDS. In the event that any management investment
company in addition to those listed on Appendix A hereto desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing by submitting an amended Appendix A with the new
management investment company, and if the Custodian agrees in writing by signing
the amended Appendix A to provide such services, such management investment
company shall become a Fund hereunder and be bound by all terms and conditions
and provisions hereof including, without limitation, the representations and
warranties set forth in Section 19.7 below.
-26-
SECTION 21.6 ADDITIONAL PORTFOLIOS. In the event that any Fund establishes
one or more series of Shares in addition to those set forth on Appendix A hereto
with respect to which it desires to have the Custodian render services as
custodian under the terms hereof, it shall so notify the Custodian in writing by
submitting an amended Appendix A with the new series, and if the Custodian
agrees in writing by signing the amended Appendix A to provide such services,
such series of Shares shall become a Portfolio hereunder.
SECTION 21.7 THE PARTIES. All references herein to the "Fund" are to each
of the management investment companies listed on Appendix A hereto, and each
management investment company made subject to this Agreement in accordance with
Section 19.5 above, individually, as if this Agreement were between such
individual Fund and the Custodian. In the case of a series corporation, trust or
other entity, all references herein to the "Portfolio" are to the individual
series or portfolio of such corporation, trust or other entity, or to such
corporation, trust or other entity on behalf of the individual series or
portfolio, as appropriate. Any reference in this Agreement to "the parties"
shall mean the Custodian and such other individual Fund as to which the matter
pertains. Each Fund hereby represents and warrants that (a) it is duly
incorporated or organized and is validly existing in good standing in its
jurisdiction of incorporation or organization; (b) it has the requisite power
and authority under applicable law and its Governing Documents to enter into and
perform this Agreement; (c) all requisite proceedings have been taken to
authorize it to enter into and perform this Agreement; (d) this Agreement
constitutes its legal, valid, binding and enforceable agreement; and (e) its
entrance into this Agreement shall not cause a material breach or be in material
conflict with any other agreement or obligation of the Fund or any law or
regulation applicable to it.
The Custodian hereby represents and warrants that (a) it is a Massachusetts
trust company and is duly organized and validly existing under the laws of the
Commonwealth of Massachusetts; (b) it has the requisite power and authority
under applicable law to enter into and perform this Agreement; (c) all requisite
proceedings have been taken to authorize it to enter into and perform this
Agreement; (d) this Agreement constitutes its legal, valid, binding and
enforceable agreement; and (e) its execution of this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of the Custodian or any law or regulation applicable to it..
SECTION 21.8 REMOTE ACCESS SERVICES ADDENDUM. The Custodian and each Fund
agree to be bound by the terms of the Remote Access Services Addendum hereto.
SECTION 21.9 NOTICES. Any notice, instruction or other instrument required
to be given hereunder may be delivered in person to the offices of the parties
as set forth herein during normal business hours or delivered prepaid registered
mail or by telex, cable or telecopy to the parties at the following addresses or
such other addresses as may be notified by any party from time to time.
To any Fund: Aberdeen Funds
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Telephone: 000-000-0000
Telecopy: 000-000-0000
-27-
To the Custodian: STATE STREET BANK AND TRUST COMPANY
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Senior Vice President
Telephone: 000-000-0000
Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
SECTION 21.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute one and the same Agreement.
SECTION 21.11 SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, unlawful or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired.
SECTION 21.12 CONFIDENTIALITY. The parties hereto agree that each shall
treat confidentially all information provided by each party to the other party
regarding its business and operations. All confidential information provided by
a party hereto shall be used by any other party hereto solely for the purpose of
rendering or receiving services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any third
party. The foregoing shall not be applicable to any information (i) that is
publicly available when provided or thereafter becomes publicly available, other
than through a breach of this Agreement, or that is independently derived by any
party hereto without the use of any information provided by the other party
hereto in connection with this Agreement, (ii) that is required in any legal or
regulatory proceeding, investigation, audit, examination, subpoena, civil
investigative demand or other similar process, or by operation of law or
regulation, or (iii) where the party seeking to disclose has received the prior
written consent of the party providing the information, which consent shall not
be unreasonably withheld. Notwithstanding anything herein to the contrary, the
Custodian and its affiliates may report and use nonpublic portfolio holdings
information of its clients, including a Fund or Portfolio, on an aggregated
basis with all or substantially all other client information and without
specific reference to any Fund or Portfolio, and so long as such information
represents a sufficiently large sample that no Fund or Portfolio data can be
identified either directly or indirectly or by inference or implication.
SECTION 21.13 REPRODUCTION OF DOCUMENTS. This Agreement and all schedules,
addenda, exhibits, appendices, attachments and amendments hereto may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto all/each agree that
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
-28-
SECTION 21.14 SHAREHOLDER COMMUNICATIONS ELECTION. SEC Rule 14b-2 requires
banks which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of beneficial
owners of securities of that issuer held by the bank unless the beneficial owner
has expressly objected to disclosure of this information. In order to comply
with the rule, the Custodian needs each Fund to indicate whether it authorizes
the Custodian to provide such Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If a Fund tells the
Custodian "no," the Custodian will not provide this information to requesting
companies. If a Fund tells the Custodian "yes" or does not check either "yes" or
"no" below, the Custodian is required by the rule to treat the Fund as
consenting to disclosure of this information for all securities owned by the
Fund or any funds or accounts established by the Fund. For a Fund's protection,
the Rule prohibits the requesting company from using the Fund's name and address
for any purpose other than corporate communications. Please indicate below
whether the Fund consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address, and
share positions.
NO [X] The Custodian is not authorized to release the Fund's name, address, and
share positions.
-29-
SIGNATURE PAGE
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative under seal
as of the date first above-written.
EACH OF THE ENTITIES
SET FORTH ON APPENDIX A HERETO
By:
--------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:
--------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice Chairman
MASTER CUSTODIAN AGREEMENT
APPENDIX A
TO
MASTER CUSTODIAN AGREEMENT
MANAGEMENT INVESTMENT COMPANIES REGISTERED WITH THE SEC AND PORTFOLIOS THEREOF,
IF ANY
ABERDEEN FUNDS
Aberdeen Asia-Pacific (ex-Japan) Equity Institutional Fund
Aberdeen Emerging Markets Institutional Fund
A-1
SCHEDULE D
TO
MASTER CUSTODIAN AGREEMENT
SPECIAL SUB-CUSTODIANS
*[None/Name of Special Sub-Custodian(s)]
D-1
