Exhibit (g)(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
CUSTODY AGREEMENT
Agreement made as of this 8th day of June, 1998, between XXXXX FUNDS, a
Massachusetts business trust organized and existing under the laws of the
Commonwealth of Massachusetts, having its principal office and place of business
at ** (hereinafter called the "Fund"), Xxxxx Bank, N.A., a national bank having
its principal office and place of business at 000 00xx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000 (the "Custodian") and THE BANK OF NEW YORK, a New York corporation
authorized to do a banking business, having its principal office and place of
business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the
"Subcustodian")
W I T N E S S E T H :
WHEREAS, the Custodian acts as the custodian for the securities and money of the
Fund;
WHEREAS, the Fund wishes to reappoint the Custodian as the Custodian
for the securities and money of the Fund pursuant to the terms of a new
agreement concerning the same;
WHEREAS, the Custodian and the Fund desire to appoint the Subcustodian as a
subcustodian of such securities and money; and
WHEREAS, the Subcustodian desires to serve as such subcustodian on the
terms and conditions hereinafter contained in this Custody Agreement;
NOW THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Fund, the Custodian and the Subcustodian agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Act of Insolvency", when used with respect to the Custodian or
Subcustodian shall include (i) the appointment of a receiver, conservator,
liquidator or trustee for such person, or the consent by such person to any such
appointment; (ii) a finding or adjudication by a court or agent of competent
jurisdiction of bankruptcy or insolvency of such person; (iii) the filing of a
petition by or against such person under any bankruptcy, reorganization,
arrangement, insolvency, liquidation or similar law of any jurisdiction, or the
consent by such person to the filing of any such petition, which petition is not
dismissed or discharged within fifteen (15) days of the filing thereof; (iv) the
such person's making of an assignment for the benefit of its creditors, or the
admission by such person in writing of its inability to pay its debts as they
become due; or (v) any order or finding by any federal financial institutions
regulatory agency that such person is `critically undercapitalized' within the
meaning of section 38 of the Federal Deposit Insurance Act, as amended.
2. "Authorized Persons" shall be deemed to include any person, whether
or not such person is an officer or employee of the Fund, duly authorized by the
Board of Trustees of the Fund to execute any Certificate, instruction, notice or
other instrument on behalf of the Fund and listed in the Certificate annexed
hereto as Appendix A or such other Certificate as may be received by the
Subcustodian from time to time.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its successor
or successors and its nominee or nominees.
4. "Call Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and payment of the
exercise price, as specified therein, to purchase from the writer thereof the
specified underlying Securities.
5. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian or Subcustodian which is actually received by the Custodian or
Subcustodian and signed on behalf of the Fund by any two Authorized Persons, and
the term Certificate shall also include Instructions.
6. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national securities
exchange qualified to act as a custodian for an investment company, or any
broker-dealer reasonably believed by the Subcustodian to be such a clearing
member.
7. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian or
Subcustodian as security for, and in consideration of, the Custodian's or
Subcustodian's issuance of (a) any Put Option guarantee letter or similar
document described in paragraph 8 of Article V herein, or (b) any receipt
described in Article V or VII herein.
8. "Composite Currency Unit" shall mean the European Currency Unit or
any other composite unit consisting of the aggregate of specified amounts of
specified Currencies as such unit may be constituted from time to time.
9. "Covered Call Option" shall mean an exchange traded option entitling
the holder, upon time exercise and payment of the exercise price, as specified
therein, to purchase from the writer thereof the specified underlying Securities
(excluding Futures Contracts) which are owned by the writer thereof and subject
to appropriate restrictions.
10. "Currency" shall mean money denominated in a lawful currency of any
country or the European Currency Unit.
11. "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission, its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a resolution
of the Fund's Board of Trustees specifically approving deposits therein by the
Custodian or the Subcustodian.
12. "Financial Futures Contract" shall mean the firm commitment to buy
or sell fixed income securities including, without limitation, U.S. Treasury
Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic bank certificates of
deposit, and Eurodollar certificates of deposit, during a specified month at an
agreed upon price.
13. "Futures Contract" shall mean a Financial Futures Contract and/or
Stock Index Futures Contracts.
14. "Futures Contract Option" shall mean an option with respect to a
Futures Contract.
15. "FX Transaction" shall mean any transaction for the purchase by one
party of an agreed amount in one Currency against the sale by it to the other
party of an agreed amount in another Currency.
16. "Instructions" shall mean instructions communications transmitted
by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed by an Authorized Person or unsigned) and
tested telex.
17. "Investment Company Act" shall mean the federal Investment Company
Act of 1940, as amended, and the rules and regulations adopted thereunder.
18. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in the
name of the Fund for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Fund, the Subcustodian and a broker, dealer, futures commission
merchant or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities and/or money of
the Fund shall be deposited and withdrawn from time to time in connection with
such transactions as the Fund may from time to time determine. Securities held
in the Book-Entry System or the Depository shall be deemed to have been
deposited in, or withdrawn from, a Margin Account upon the Custodian's or
Subcustodian's effecting an appropriate entry in its books and records.
19. "Money Market Security" shall be deemed to include without
limitation, certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United States
or agencies or instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public authority, commercial
paper, certificates of deposit and bankers' acceptances, repurchase agreements
with respect to the same and bank time deposits, where the purchase and sale of
such securities normally requires settlement in federal funds on the same day as
such purchase or sale.
20. "O.C.C" shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
21. "Option" shall mean a Call Option, Covered Call Option, Stock Index
Option and/or a Put Option.
22. "Oral Instructions" shall mean verbal instructions actually
received by the Subcustodian from an Authorized Person or from a person
reasonably believed by the Custodian or Subcustodian to be an Authorized Person.
23. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and Futures
Contract Options entitling the holder, upon timely exercise and tender of the
specified underlying Securities, to sell such Securities to the writer thereof
for the exercise price.
24. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Fund sells Securities and agrees to repurchase such Securities at a
described or specified date and price.
25. "Security" shall be deemed to include, without limitation, Money
Market Securities, Call Options, Put Options, Stock Index Options, Stock Index
Futures Contracts, Stock Index Futures Contract Options, Financial Futures
Contracts, Financial Futures Contract Options, Reverse Repurchase Agreements,
common stocks and other securities having characteristics similar to common
stocks, preferred stocks, debt obligations issued by state or municipal
governments and by public authorities, (including, without limitation, general
obligation bonds, revenue bonds, industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase, sell or subscribe for the same, or evidencing or representing
any other rights or interest therein, or any property or assets.
26. "Senior Security Account" shall mean an account maintained and
specifically allocated to a Series under the terms of this Agreement as a
segregated account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Fund specifically allocated
to such Series shall be deposited and withdrawn from time to time in accordance
with Certificates received by the Custodian or Subcustodian in connection with
such transactions as the Fund may from time to time determine.
27. "Series" shall mean the various portfolios, if any, of the Fund listed
on Appendix B hereto as amended from time to time.
28. "Shares" shall mean the shares of beneficial interest of the Fund,
each of which is, in the case of a Fund having Series, allocated to a particular
Series.
29. "Stock Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an amount of
cash equal to a specified dollar amount times the difference between the value
of a particular stock index at the close of the last business day of the
contract and the price at which the futures contract is originally struck.
30. "Stock Index Option" shall mean an exchange traded option entitling
the holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of the
index on the date of exercise.
ARTICLE II.
APPOINTMENT OF CUSTODIAN AND SUBCUSTODIAN
1. The Fund hereby constitutes an appoints the Custodian as custodian
of the Securities and money at any time owned by the Fund during the period of
this Agreement, and delivered or caused to be delivered to the Custodian by the
Fund.
2. The Fund and the Custodian hereby constitute and appoint the
Subcustodian as subcustodian of the Securities and money at any time owned by
the Fund during the period of this Agreement and delivered or caused to be
delivered to the Subcustodian by the Fund or the Custodian. The Custodian, in
turn, will deliver or cause to be delivered such Securities and money to the
Subcustodian subject to the same specifications made by the Fund as described in
the previous sentence. At the direction of the Custodian, the Fund shall deliver
or cause to be delivered all Securities or money owned by it directly to the
Subcustodian, without the Custodian taking possession thereof, and in so doing
the Fund shall make the same specifications as previously provided in this
paragraph 2.
3. The Custodian and Subcustodian hereby accept their respective
appointments as Custodian and Subcustodian, respectively and agree to perform
the duties thereof as hereinafter set forth.
4. The Custodian specifically authorizes the Fund to communicate
directly with the Subcustodian concerning any and all matters pertaining to the
custody of Securities and money of the Fund, and matters properly relating
thereto, including those matters provided in Articles IV through XVIII of this
Agreement, and the Subcustodian shall be authorized to rely and act on any
Instruction or Certificate given by the Fund to the Subcustodian pursuant to any
provision thereof, so long as the Subcustodian continues to perform its duties
and responsibilities hereunder. Custodian shall have no authority under this
Agreement to alter, countermand or modify without the written consent of the
Fund any Instruction or Certificate given directly by the Fund to the
Subcustodian. The Fund agrees to promptly transmit to Custodian a copy of any
Instructions or Certificate given to Subcustodian. It is expressly understood
that nothing in this Agreement shall act to relieve Custodian of its duties and
responsibilities as such to the Fund, except as provided in Article XIX of this
Agreement; provided however, that Custodian shall have no liability or
responsibility for any act or omissions of any Foreign Sub-Custodian other than
to take such actions, in cooperation with Subcustodian, as are provided in
Paragraph 8 of Article XVII hereof.
5. For the performance of its duties and responsibilities specified
hereunder, the Custodian shall be paid such compensation by the Fund, out of the
net assets of the Fund, as the Fund and the Custodian shall agree in writing
signed by both parties, which writing shall refer to and incorporate the
provisions of this Agreement. In turn, for the performance of its duties and
responsibilities specified hereunder, the Subcustodian shall be paid such
compensation, which shall be paid by the Custodian, as the Custodian and the
Subcustodian shall agree in writing signed by both parties, which writing shall
refer to and incorporate the provisions of this Agreement. At the election of
the Custodian, the Custodian may direct the Fund, with the Fund's consent, to
pay directly to the Custodian, out of the compensation owned to it by the Fund
hereunder, the compensation owed by the Custodian to the Subcustodian. Any
compensation paid by the Fund hereunder shall be treated as an expense thereof
which shall be apportioned among the Series of the Fund in the manner provided
in paragraph 9 of Article XIX hereof.
ARTICLE III.
AUTHORITY OF THE CUSTODIAN AND SUBCUSTODIAN
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Fund will deliver or cause to be delivered to the Custodian
all Securities and all money owned by it, at any time during the period of this
Agreement, and shall specify with respect to such Securities and money the
Series to which the same are specifically allocated.
2. The Custodian specifically authorizes the Fund to communicate
directly with the Subcustodian concerning any and all matters pertaining to the
custody of Securities and money of the Funds, and matters properly relating
thereto, including those matters provided in Article IV through XVIII of this
Agreement, and the Subcustodian shall be authorized to rely and act on any
Instruction or Certificate given by the Fund to the Subcustodian pursuant to any
provision thereof, so long as the Subcustodian continues to perform its duties
and responsibilities hereunder. Custodian shall have no authority under this
Agreement to alter, countermand or modify without the written consent of the
Fund any Instruction or Certificate given directly by the Fund to the
Subcustodian. The Fund agrees to promptly transmit to Custodian a copy of any
Instructions or Certificate given to Subcustodian. It is expressly understood
that nothing in this Agreement shall act to relieve Custodian of its duties and
responsibilities as such to the Fund, except as provided in Article XIX of this
Agreement; provided however, that Custodian shall have no liability or
responsibility for any act or omissions of any Foreign Sub-Custodian, as are
provided in Paragraph 8 of Article XVII hereof.
3. For the performance of its duties and responsibilities specified
hereunder, the Custodian shall be paid such compensation by the Fund, out of the
net assets of the Fund, as the Fund and the Custodian shall agree in writing
signed by both parties, which writing shall refer to and incorporate the
provisions of this Agreement. In turn, for the performance of its duties and
responsibilities specified hereunder, the Subcustodian shall be paid such
compensation, which shall be paid by the Custodian, as the Custodian and
Subcustodian shall agree in writing signed by both parties, which writing shall
refer to and incorporate the provisions of this Agreement. At the election of
the Custodian, the Custodian may direct the Fund, with the Fund's consent, to
pay directly to the Custodian, out of the compensation owed to it by the Fund
hereunder, the compensation owed by the Custodian to the Subcustodian. Any
compensation paid by the Fund hereunder shall be treated as an expense thereof
which shall be apportioned among the Series of the Fund in the manner provided
in paragraph 9 of Article XIX hereof.
4. The Custodian and the Subcustodian shall subject to the provisions
of this Article and to Article XVII hereof, segregate, keep and maintain the
assets of each Series separate and apart from assets held by the Custodian or
the Custodian in any other capacity, and from assets of other Series. The
Custodian or the Subcustodian will be entitled to reverse any credits made on
the Fund's behalf where such credits have been previously made and money is not
finally collected. The Fund shall deliver to the Custodian and the Subcustodian
a certified resolution of the Board of Trustees of the Fund, substantially in
the form of Exhibit A hereto, approving, authorizing and instructing the
Custodian and the Subcustodian on a continuous and on-going basis to deposit
therein, regardless of the Series to which the same are specifically allocated
and to utilize the Book-Entry System to the extent possible in connection with
its performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities and
deliveries and returns of Securities collateral. Prior to a deposit of
Securities specifically allocated to a Series in the Depository, the Fund shall
deliver to the Custodian and the Subcustodian a certified resolution of the
Board of Trustees of the Fund, substantially in the form of Exhibit B hereto,
approving, authorizing and instructing the Custodian and the Subcustodian on a
continuous and ongoing basis until instructed to the contrary by a Certificate
actually received by the Custodian and the Subcustodian to deposit in the
Depository all Securities specifically allocated to such Series eligible for
deposit therein, and to utilize the Depository to the extent possible with
respect to such Securities in connection with its performance hereunder,
including, without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns of
securities collateral. Securities and money deposited in either the Book-Entry
System or the Depository will be represented in accounts which include only
assets held by the Custodian or the Subcustodian for customers, including, but
not limited to, accounts in which the Custodian or the Subcustodian acts in a
fiduciary or representative capacity and will be specifically allocated on the
Custodian's or the Subcustodian's books to the separate account for the
applicable Series. Prior to the Custodian's or the Subcustodian accepting,
utilizing and acting with respect to Clearing Member confirmations for Options
and transactions in Options for a Series as provided in this Agreement, the
Custodian or the Subcustodian shall have received a certified resolution of the
Fund's Board of Trustees, substantially in the form of Exhibit C hereto,
approving, authorizing and instructing the Custodian or the Subcustodian on a
continuous and on-going basis, until instructed to the contrary by a Certificate
actually received by the Custodian, or the Subcustodian to accept, utilize and
act in accordance with such confirmations as provided in this Agreement with
respect to such Series.
5. Except as otherwise specifically provided in this Agreement,
including, without limitation, as provided in paragraph 6 of Article IV hereof,
or in another valid and binding agreement between Custodian and the Fund, or in
Written Instructions delivered by the Fund, neither Custodian or Subcustodian
shall (i) commingle or cause to be commingled Securities held for the Fund with
securities or other assets of Custodian or Subcustodian or any Affiliate of
Custodian or Subcustodian, (ii) take any action, or cause, suffer or permit the
taking of any action, which results or would result in the creation, filing,
attachment or placement of any right, charge, security interest, lien,
encumbrance or claim of any kind (other than for the account of Custodian,
Subcustodian or any Foreign Sub-Custodian as specifically permitted under this
Agreement) with respect to any securities or cash held for the Fund, or (iii)
otherwise receive, hold or transfer any Securities or assets of the Fund in a
manner inconsistent with the requirements of the Investment Company Act;
provided, however, that neither Custodian nor Subcustodian shall not be deemed
to be in violation of this representation and warranty insofar as it takes any
action, or refrains to take any action, pursuant to Oral or Written Instructions
or a Certificate.
ARTICLE IV.
CUSTODY OF SECURITIES AND MONEY
1. The Subcustodian shall establish and maintain separate accounts, in
the name of each Series, and shall credit to the separate account for each
Series all money received by it for the account of the Fund with respect to such
Series. Money credited to a separate account for a Series shall be disbursed by
the Subcustodian only:
(a) as hereinafter provided;
(b) pursuant to Certificates setting froth the name and
address of the person to whom the payment is to be made, the Series account from
which payment is to be made and the purpose for which payment is to be made; or
(c) in payment of the fees and in reimbursement of the
expenses and liabilities of the Subcustodian attributable to such Series.
2. Promptly after the close of business on each day, the Subcustodian
shall furnish the Fund and the Custodian with confirmations and a summary, on a
per Series basis, of all transfers to or from the account of the Fund for a
Series, either hereunder or with any co-custodian or subcustodian appointed in
accordance with this Agreement during said day. Where Securities are transferred
to the account of the Fund for a Series, the Subcustodian shall also by
book-entry or otherwise identify as belonging to such Series a quantity of
Securities in a fungible bulk of Securities registered in the name of the
Subcustodian (or its nominee) or shown on the Subcustodian's account on the
books of the Book-Entry System or the Depository. At least monthly and from time
to time, the Subcustodian shall furnish the Fund and the Custodian with a
detailed statement, on a per Series basis, of the Securities and money held by
the Subcustodian for the Fund.
3. Except as otherwise provided in paragraph 6 of this Article and in
Article IX, all Securities held by the Subcustodian hereunder, which are issued
or issuable only in bearer form, except such Securities as are held in the
Book-Entry System, shall be held by the Subcustodian in that form; all other
Securities held hereunder may be registered in the name of the Fund, in the name
of any duly appointed registered nominee of the Subcustodian as the Subcustodian
may from time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Fund agrees to furnish to the Subcustodian appropriate instruments to enable the
Subcustodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of the Book-Entry System or
the Depository any Securities which it may hold hereunder and which may from
time to time be registered in the name of the Fund. The Subcustodian shall hold
all such Securities specifically allocated to a Series which are not held in the
Book-Entry System or in the Depository in a separate account in the name of such
Series physically segregated at all times from those of any other person or
persons.
4. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Certificate, the Subcustodian by itself, or
through the use of the Book-Entry System or the Depository with respect to
Securities held hereunder and therein deposited, shall with respect to all
Securities held for the Fund hereunder in accordance with preceding paragraph 3:
(a) collect all income, dividends and distributions due or
payable;
(b) give notice to the Fund and present payment and collect
the amount payable upon such Securities which are called, but only if either (i)
the Subcustodian receives a written notice of such call, or (ii) notice of such
call appears in one or more of the publications listed in Appendix C annexed
hereto, which may be amended at any time by the Subcustodian without the prior
notification or consent of the Fund, (it being agreed Subcustodian shall
promptly send notice to Custodian and the Fund of any amendment it has made);
(c) present for payment and collect the amount payable upon
all Securities which mature;
(d) surrender Securities in temporary form for definitive
Securities;
(e) execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in effect;
(f) hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to any Securities
held by the Subcustodian for such Series hereunder; and
(g) deliver to the Fund all notices, proxies, proxy soliciting
materials, consents and other written information (including, without
limitation, notices of tender offers and exchange offers, pendency of calls,
maturities of Securities and expiration of rights) relating to Securities held
pursuant to this Agreement which are actually received by the Subcustodian, such
proxies and other similar materials to be executed by the registered owner (if
Securities are registered otherwise than in the name of the Fund), but without
indicating that manner in which proxies or consents are to be voted.
5. Upon receipt of a Certificate and not otherwise, the Subcustodian,
directly or through the use of the Book-Entry System or Depository, shall:
(a) execute and deliver to such persons as may be designated
in such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities held by the
Subcustodian hereunder for the Series specified in such Certificate may be
exercised;
(b) deliver any Securities held by the Subcustodian hereunder
for the Series specified in such Certificate in exchange for other Securities or
cash issue or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities received in
exchange;
(c) deliver any Securities held by the Subcustodian hereunder
for the Series specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
corporation, and receive and hold hereunder specifically allocated to such
Series such certificates of deposit, interim receipts or other instruments as
may be issued to it to evidence such delivery;
(d) make such transfers or exchanges of the assets of the
Series specified in such Certificate, and take such other steps as shall be
stated in such Certificate to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger, consolidation or
recapitalization of the Fund; and
(e) present for payment and collect the amount payable upon
Securities not described in preceding paragraph 4(b) of this Article which may
be called as specified in the Certificate.
6. Notwithstanding any provision elsewhere contained herein, the
Subcustodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received a
Certificate from the Fund stating, that any such instruments or certificates are
available. The Fund shall deliver to the Subcustodian such a Certificate no
later than the business day preceding the availability of any such instrument or
certificate. Prior to such availability, the Subcustodian shall comply with
Section 17(f) of the Investment Company Act in connection with the purchase,
sale, settlement, closing-out or writing of Futures Contracts, Options, or
Futures Contract Options by making payments or deliveries specified in
Certificates received by the Subcustodian in connection with any such purchase,
sale, writing, settlement or closing-out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation reasonably
believed by the Subcustodian to be in the form customarily used by brokers,
dealers, or futures commission merchants with respect to such Futures Contracts,
Options, or Futures Contract Options, as the case may be, confirming that such
Security is held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of the Subcustodian (or any nominee of
the Subcustodian) as custodian for the Fund, provided, however, that
notwithstanding the foregoing, payments to or deliveries from the Margin
Account, and payments with respect to Securities to which a Margin Account
relates, shall be made in accordance with the terms and conditions of the Margin
Account Agreement. Whenever any such instruments or certificates are available,
the Subcustodian shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any Futures Contract, Option, or Futures Contract
Option for which such instruments or such certificates are available only
against the delivery to the Subcustodian of such instrument or such certificate,
and deliver and Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by the
Subcustodian of payment therefor. Any such instrument or certificate delivered
to the Subcustodian shall be held by the Subcustodian hereunder in accordance
with, and subject to, the provisions of this Agreement.
ARTICLE V.
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Fund, other than a
purchase of an Option, a Futures Contract, or a Futures Contract Option, the
Fund shall deliver to the Subcustodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a Certificate or Oral
Instructions, specifying with respect to each such purchase: (a) the Series to
which such Securities are to be specifically allocated; (b) the name of the
issuer and the title of the Securities; (c) the number of shares or the
principal amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f) the total amount
payable upon such purchase; (g) the name of the person from whom or the broker
through whom the purchase was made, and the name of the clearing broker, if any;
and (h) the name of the broker to whom payment is to be made. The Subcustodian
shall, upon receipt of Securities purchased by or for the Fund, pay to the
broker specified in the Certificate out of the money held for the account of
such Series the total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such Certificate or Oral
Instructions.
2. Promptly after each sale of Securities by the Fund, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any Reverse
Repurchase Agreement, the Fund shall deliver to the Subcustodian (i) with
respect to each sale of Securities which are not Money Market Securities, a
Certificate, and (ii) with respect to each sale of Money Market Securities, a
Certificate or Oral Instructions, specifying with respect to each sale: (a) the
Series to which such Securities were specifically allocated; (b) the name of the
issuer and the title of the Security; (c) the number of shares or principal
amount sold, and accrued interest, if any; (d) the date of sale; (e) the sale
price per unit; (f) the total amount payable to the Fund upon such sale; (g) the
name of the broker through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. The Subcustodian shall deliver the Securities
specifically allocated to such Series to the broker specified in the Certificate
against payment of the total amount payable to the Fund upon such Sale, provided
that the same conforms to the total amount payable as set forth in such
Certificate or Oral Instructions.
ARTICLE VI.
OPTIONS
1. Promptly after the purchase of any Option by the Fund, the Fund
shall deliver to the Subcustodian a Certificate specifying with respect to each
Option purchased: (a) the Series to which such Option is specifically allocated;
(b) the type of Option (put or call); (c) the name of the issuer and the title
and number of shares subject to such Option or, in the case of a Stock Index
Option, the stock index to which such Option relates and the number of the Stock
Index Options purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the total amount payable by the Fund
in connection with such purchase, (h) the name of the Clearing Member through
whom such Option was purchased; and (i) the name of the broker to whom payment
is to be made. The Subcustodian shall pay upon receipt of a Clearing Member's
statement confirming the purchase of such Option held by such Clearing Member
for the account of the Subcustodian (or any duly appointed and registered
nominee of the Subcustodian) as subcustodian for the Fund, out of money held for
the account of the Series to which such Option is to be specifically allocated,
the total amount payable upon such purchase to the Clearing Member through whom
the purchase was made, provided that the same conforms to the total amount
payable as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by the Fund pursuant
to paragraph 1 hereof, the Fund shall deliver to the Subcustodian a Certificate
specifying with respect to each such sale: (a) the Series to which such Option
was specifically allocated; (b) the type of Option (put or call); (c) the name
of the issuer and the title and number of shares subject to such Option or, in
the case of a Stock Index Option, the stock index to which such Option relates
and the number of Stock Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom the sale was
made. The Subcustodian shall consent to the delivery of the Option sold by the
Clearing Member which previously supplied the confirmation described in
preceding paragraph 1 of this Article with respect to such Option against
payment to the Subcustodian of the total amount payable to the Fund, provided
that the same conforms to the total amount payable as set forth in such
Certificate.
3. Promptly after the exercise by the Fund of any Call Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Subcustodian a Certificate specifying with respect to such Call Option: (a) the
Series to which such Call Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Call Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid by the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Call Option was exercised.
The Subcustodian shall, upon receipt of the Securities underlying the Call
Option was exercised. The Subcustodian shall, upon receipt of the Securities
underlying the Call Option which was exercised, pay out of the money held for
the account of the Series to which such Call Option was specifically allocated
the total amount payable to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total amount payable as set
forth in such Certificates.
4. Promptly after the exercise by the Fund of any Put Option purchased
by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to the
Subcustodian a Certificate specifying with respect to such Put Option: (a) the
Series to which such Put Option was specifically allocated; (b) the name of the
issuer and the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the exercise price
per share; (f) the total amount to be paid to the Fund upon such exercise; and
(g) the name of the Clearing Member through whom such Put Option was exercised.
The Subcustodian shall, upon receipt of the amount payable upon the exercise of
the Put Option, deliver or direct the Depository to deliver the Securities
specifically allocated to such Series, provided the same conforms to the amount
payable to the Fund as set forth in such Certificate.
5. Promptly after the exercise by the Fund of any Stock Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall deliver to
the Subcustodian a Certificate specifying with respect to such Stock Index
Option: (a) the Series to which such Stock Index Option was specifically
allocated; (b) the type of Stock Index Option (put or call); (c) the number of
Options being exercised; (d) the stock index to which such Option relates; (e)
the expiration date; (f) the exercise price: (g) the total amount to be received
by the Fund in connection with such exercise; and (h) the Clearing Member from
whom such payment is to be received. The Subcustodian shall make payment of the
exercise price as so specified to the indicated Clearing Member, and upon
receipt of the so specified total amount to be received credit the same to the
account of the indicated Series.
6. Whenever the Fund writes a Covered Call Option, the Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
such Covered Call Option: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received by the
Fund; (f) the date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The Subcustodian
shall deliver or cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call Option, such
receipts as are required in accordance with the customs prevailing among
Clearing Members dealing in Covered Call Options and shall impose, or direct the
Depository to impose, upon the underlying Securities specified in the
Certificate specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Subcustodian has
the right, upon prior written notification to the Fund, at any time to refuse to
issue any receipts for Securities in the possession of the Subcustodian and not
deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option is written by the Fund and described
in the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Subcustodian a Certificate instructing the Subcustodian to
deliver, or direct the Depository to deliver, the Securities subject to such
Covered Call Option and specifying: (a) the Series for which such Covered Call
Option was written; (b) the name of the issuer and the title and number of
shares subject to the Covered Call Option; (c) the Clearing Member to whom the
underlying Securities are to be delivered; and (d) the total amount payable to
the Fund upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Subcustodian shall
deliver, or direct the Depository to deliver, the underlying Securities as
specified in the Certificate against payment of the amount to be received as set
forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall promptly
deliver to the Subcustodian a Certificate specifying with respect to such Put
Option: (a) the Series for which such Put Option was written; (b) the name of
the issuer and the title and number of shares for which the Put Option was
written and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Fund; (f) the date such Put Option
is written; (g) the name of the Clearing Member through whom the premium is to
be received and to whom a Put Option guarantee letter is to be delivered; (h)
the amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior Security
Account for such Series; and (i) the amount of cash and/or the amount and kind
of Securities specifically allocated to such Series to be deposited into the
Collateral Account for such Series. The Subcustodian shall, after making the
deposits into the Collateral Account specified in the Certificate, issue a Put
Option guarantee letter substantially in the form utilized by the Subcustodian
on the date hereof, and deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said Certificate.
Notwithstanding the foregoing, the Subcustodian shall be under no obligation to
issue any Put Option guarantee letter or similar document if it is unable to
make any of the representations contained therein.
9. Whenever a Put Option written by the Fund and described in the
preceding paragraph is exercised, the Fund shall promptly deliver to the
Subcustodian a Certificate specifying: (a) the Series to which such Put Option
was written; (b) the name of the issuer and title and number of shares subject
to the Put Option; (c) the Clearing Member from whom the underlying Securities
are to be received; (d) the total amount payable by the Fund upon such delivery;
(e) the amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of Securities,
specifically allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Subcustodian in connection
with such Put Option, the Subcustodian shall pay out of the money held for the
account of the Series to which such Put Option was specifically allocated the
total amount payable to the Clearing Member specified in the Certificate as set
forth in such Certificates against delivery of such Securities, and shall make
the withdrawals specified in such Certificates.
10. Whenever the Fund writes a Stock Index Option, the Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
such Stock Index Option: (a) the Series for which such Stock Index Option was
written; (b) whether such Stock Index Option is a put or a call; (c) the number
of options written; (d) the stock index to which such Option relates; (e) the
expiration date; (f) the exercise price; (g) the Clearing Member through whom
such Option was written; (h) the premium to be received by the Fund; (i) the
amount of cash and/or the amount and kind of Securities, if any, specifically
allocated to such Series to be deposited in the Senior Security Account for such
Series; (j) the amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Collateral Account
for such Series; and (k) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be deposited in a
Margin Account, and the name in which such account is to be or has been
established. The Subcustodian shall, upon receipt of the premium specified in
the Certificate, make the deposits, if any, into the Senior Security Account
specified in the Certificate, and either (1) deliver such receipts, if any,
which the Subcustodian has specifically agreed to issue, which are in accordance
with the customs prevailing among Clearing Members in Stock Index Options and
make the deposits into the Collateral Account specified in the Certificate, or
(2) make the deposits into the Margin Account specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund and described in
the preceding paragraph of this Article is exercised, the Fund shall promptly
deliver to the Subcustodian a Certificate specifying with respect to such Stock
Index Option: (a) the Series for which such Stock Index Option was written; (b)
such information as may be necessary to identify the Stock Index Option being
exercised; (c) the Clearing Member through whom such Stock Index Option is being
exercised; (d) the total amount payable upon such exercise, and whether such
amount is to be paid by or to the Fund; (e) the amount of cash and/or amount and
kind of Securities, if any, to be withdrawn from the Margin Account; and (f) the
amount of cash and/or amount and kind of Securities, if any, to be withdrawn
from the Senior Security Account for such Series; and the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Collateral
Account for such Series. Upon the return and/or cancellation of the receipt, if
any, delivered pursuant to the preceding paragraph of this Article, the
Subcustodian shall l pay out of the money held for the account of the Series to
which such Stock Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to a previously
written Option described in paragraphs 6, 8 or 10 of this Article in a
transaction expressly designed as a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Fund shall promptly deliver
to the Subcustodian a Certificate specifying with respect to the Option being
purchased: (a) that the transaction is a Closing Purchase Transaction; (b) the
Series for which the Option was written; (c) the name of the issuer and the
title and number of shares subject to the Option, or, in the case of a Stock
Index Option, the stock index to which such Option relates and the number of
options held; (d) the exercise price; (e) the premium to be paid by the Fund;
(f) the expiration date; (g) the type of Option (put or call); (h) the date of
such purchase; (i) the name of the Clearing Member to whom the premium is to be
paid; and (j) the amount of cash and/or the amount and kind of Securities, if
any, to be withdrawn from the Collateral Account, a specified Margin Account, or
the Senior Security Account for such Series. Upon the Subcustodian's payment of
any premium and the return and/or cancellation of any receipt issued pursuant to
paragraphs 6, 8 or 10 of this Article with respect to the Option being
liquidated through the Closing Purchase Transaction, the Subcustodian shall
remove, or direct the Depository to remove, the previously imposed restrictions
on the Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the Fund and
described in this Article, the Subcustodian shall delete such Option from the
statements delivered to the Fund pursuant to paragraph 2 of Article IV herein,
and upon the return and/or cancellation of any receipts issued by the
Subcustodian, shall make such withdrawals from the Collateral Account, and the
Margin Account and/or the Senior Security Account as may be specified in a
Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VII.
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract, the Fund
shall deliver to the Subcustodian a Certificate specifying with respect to such
Futures Contract, (or with respect to any number of identical Futures
contract(s)): (a) the Series for which the Futures contract is being entered;
(b) the category of Futures Contract (the name of the underlying stock index or
financial instrument); (c) the number of identical Futures Contracts entered
into; (d) the delivery or settlement date of the Futures Contract(s); (e) the
date the Futures Contract(s) was (were) entered into and the maturity date; (f)
whether the Fund is buying (going long) or selling (going short) on such Futures
Contract(s); (g) the amount of cash and/or the amount and kind of Securities, if
any, to be deposited in the Senior Security Account for such Series; (h) the
name of the broker, dealer, or futures commission merchant through whom the
Futures Contract was entered into; and (i) the amount of fee or commission, if
any, to be paid and the name of the broker, dealer or futures commission
merchant to whom such amount is to be paid. The Subcustodian shall make the
deposits, if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Subcustodian shall make payment
out of the money specifically allocated to such Series of the fee or commission,
if any, specified in the Certificate and deposit in the Senior Security Account
for such Series the amount of cash and/or the amount and kind of Securities
specified in said Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Fund to a broker, dealer, or futures commission merchant with
respect to an outstanding Futures Contract, shall be made by the Subcustodian in
accordance with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a
broker, dealer, or futures commission merchant to the Fund with respect to an
outstanding Futures Contract, shall be received and dealt with by the
Subcustodian in accordance with the terms and conditions of the Margin Account
Agreement.
3. Whenever a Futures Contract held by the Subcustodian hereunder is
retained by the Fund until delivery or settlement is made on such Futures
Contract, the Fund shall deliver to the Subcustodian a Certificate specifying:
(a) the Futures Contract and the Series to which the same relates; (b) with
respect to a Stock Index Futures Contract, the total cash settlement amount to
be paid or received, and with respect to a Financial Futures Contract, the
Securities and/or amount of cash to be delivered or received; (c) the broker,
dealer, or futures commission merchant to or from whom payment or delivery is to
be made or received; and (d) the amount of cash and/or Securities to be
withdrawn from the Senior Security Account for such Series. The Subcustodian
shall make the payment or delivery specified in the Certificate, and delete such
Futures Contract from the statements delivered to the Fund pursuant to paragraph
2 of Article IV herein.
4. Whenever the Fund shall enter into a Futures Contract to offset a
Futures Contract held by the Subcustodian a Certificate specifying: (a) the
items of information required in a Certificate described in paragraph 1 of this
Article, and (b) the Futures Contract being offset. The Subcustodian shall make
payment out of the money specifically allocated to such Series of the fee or
commission, if any, specified in the Certificate and delete the Futures contract
being offset from the statements delivered to the Fund pursuant to paragraph 2
of Article IV herein, and make such withdrawals from the Senior Security Account
for such Series as may be specified in such Certificate. The withdrawals, if
any, to be made from the Margin Account shall be made by the Subcustodian in
accordance with the terms and conditions of the Margin Account Agreement.
5. Notwithstanding any other provision in this Agreement to the
contrary, the Subcustodian shall deliver cash and Securities to a futures
commission merchant upon receipt of a Certificate from the Fund specifying: (a)
the name of the futures commission merchant; (b) the specific cash and
Securities to be delivered; (c) the date of such delivery; and (d) the date of
the agreement between the Fund and such futures commission merchant entered
pursuant to Rule 17f-6 under the Investment Company Act. Each delivery of such a
Certificate by the Fund shall constitute (x) a representation and warranty by
the Fund that the Rule 17f-6 agreement has been duly authorized, executed and
delivered by the Fund and the futures commission merchant and complies with Rule
17f-6, and (y) an agreement by the Fund that the Subcustodian shall not be
liable for the acts or omissions of any such futures commission merchant.
ARTICLE VIII.
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Fund, the Fund shall promptly deliver to the Subcustodian a Certificate
specifying with respect to such Futures Contract Option: (a) the Series to which
such Option is specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other information as
may be necessary to identify the Futures contract underlying the Futures
Contract Option purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the amount of premium to be paid by
the Fund upon such purchase; (h) the name of the broker or futures commission
merchant through whom such option was purchased; and (i) the name of the broker,
or futures commission merchant, to whom payment is to be made. The Subcustodian
shall pay out of the money specifically allocated to such Series, the total
amount to be paid upon such purchase to the broker or futures commission
merchant through whom the purchase was made, provided that the same conforms to
the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall promptly deliver to the
Subcustodian a Certificate specifying with respect to each such sale: (a) Series
to which such Futures Contract Option was specifically allocated; (b) the type
of Futures Contract Option (put or call); (c) the type of Futures Contract and
such other information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the broker or futures commission merchant through
whom the sale was made. The Subcustodian shall consent to the cancellation of
the Futures Contract Option being closed against payment to the Subcustodian of
the total amount payable to the Fund, provided the same conforms to the total
amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund pursuant to
paragraph 1 is exercised by the Fund, the Fund shall promptly deliver to the
Subcustodian a Certificate specifying: (a) the Series to which such Futures
contract Option was specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the date of exercise; (e) the name
of the broker or futures commission merchant through whom the Futures Contract
Option is exercised; (f) the net total amount, if any, payable by the Fund; (g)
the amount, if any, to be received by the Fund; and (h) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Subcustodian shall make, out of the money and
Securities specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Subcustodian in accordance with the terms and conditions of the
Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
such Futures Contract Option: (a) the Series for which such Futures Contract
Option was written; (b) the type of Futures Contract Option (put or call); (c)
the type of Futures Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Contract Option; (d) the
expiration date; (e) the exercise price; (f) the premium to be received by the
Fund; (g) the name of the broker or futures commission merchant through whom the
premium is to be received ;and (h) the amount of cash and/or the amount and kind
of Securities, if any, to be deposited in the Senior Security Account for such
Series. The Subcustodian shall, upon receipt of the premium specified in the
Certificate, make out of the money and Securities specifically allocated to such
Series the deposited into the Senior Security Account, if any, as specified in
the Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Subcustodian in accordance with the terms and conditions of the
Margin Account Agreement.
5. Whenever a Futures Contract Option written by the Fund which is a
call is exercised, the Fund shall promptly deliver to the Subcustodian a
Certificate specifying: (a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract Option exercised;
(c) the type of Futures Contract underlying the Futures Contract Option; (d) the
name of the broker or futures commission merchant though whom such Futures
Contract Option was exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by the Fund
upon such exercise; and (g) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such Series. The
Subcustodian shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Certificate. The deposits, if any, to be made to the Margin Account shall be
made by the Subcustodian in accordance with the terms and conditions of the
Margin Account Agreement.
6. Whenever a Futures Contract Option which is written by the Fund and
which is a put is exercised, the Fund shall promptly deliver to the Subcustodian
a Certificate specifying: (a) the Series to which such option was specifically
allocated; (b) the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures Contract Option
is exercised; (e) the net total amount, if any, payable to the Fund upon such
exercise; (f) the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount and kind of Securities and/or cash to be withdrawn
from or deposited in, the Senior Security Account for such Series, if any. The
Subcustodian shall, upon its receipt of the net total amount payable to the
Fund, if any, specified in the Certificate, make out of the money and Securities
specifically allocated to such Series, the payments, if any, and the deposits,
if any, into the Senior Security Account as specified in the Certificate. The
deposits to and/or withdrawals from the Margin Account, if any, shall be made by
the Custodian in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract Option identical to
a previously written Futures Contract Option described in this Article in order
to liquidate is position as a writer of such Futures Contract Option, the Fund
shall promptly deliver to the Subcustodian a Certificate specifying with respect
to the Futures Contract Option being purchased: (a) the Series to which such
Option is specifically allocated; (b) that the transaction is a closing
transaction; (c) the type of Futures Contract and such other information as may
be necessary to identify the Futures Contract underlying the Futures Option
Contract; (d) the exercise price; (e) the premium to be paid by the Fund; (f)
the expiration date; (g) the name of the broker or futures commission merchant
to whom the premium is to be paid; and (h) the amount of cash and/or the amount
and kind of Securities, if any, to be withdrawn from the Senior Security Account
for such Series. The Subcustodian shall effect the withdrawals from the Senior
Security Account specified in the Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Subcustodian in accordance
with the terms and conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or purchased by
the Fund and described in this Article, the Subcustodian shall (a) delete such
Futures Contract Option from the statements delivered to the Fund pursuant to
paragraph 3 of Article VII herein and, (b) make such withdrawals from and/or in
the case of an exercise such deposits into the Senior Security account as may be
specified in a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Subcustodian in accordance with the terms
and conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise of a
Futures Contract Option described in this Article shall be subject to Article
VII hereof.
10. Notwithstanding any other provisions in this Agreement to the
contrary, the Subcustodian shall deliver cash and Securities to a futures
commission merchant upon receipt of a Certificate from the Fund specifying: (a)
the name of the futures commission merchant; (b) the specific cash and
Securities to be delivered; (c) the date of such delivery; and (d) the date of
the agreement between the Fund and such futures commission merchant entered
pursuant to Rule 17f-6 under the Investment Company Act. Each delivery of such a
Certificate by the Fund shall constitute (x) a representation and warranty by
the Fund that the Rule 17f-6 agreement has been duly authorized, executed and
delivered by the Fund and the futures commission merchant and complies with Rule
17f-6, and (y) an agreement by the Fund that the Subcustodian shall not be
liable for the acts or omissions of any such futures commission merchant.
ARTICLE IX.
SHORT SALES
1. Promptly after any short sales by any Series of the Fund, the Fund
shall promptly deliver to the Subcustodian a Certificate specifying: (a) the
Series for which such short sale was made; (b) the name of the issuer and the
title of the Security; (c) the number of shares of principal amount sold, and
accrued interest or dividends, if any; (d) the dates of the sale and settlement;
(e) the sale price per unit; (f) the total amount credited to the Fund upon such
sale, if any; (g) the amount of cash and/or the amount and kind of Securities,
if any, which are to be deposited in a Margin Account and the name in which such
Margin Account has been or is to be established; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in a Senior Security
Account, and (i) the name of the broker through whom such short sale was made.
The Subcustodian shall upon its receipt of a statement from such broker
confirming such sale and that the total amount credited to the Fund upon such
sale, if any, as specified in the Certificate is held by such broker for the
account of the Subcustodian (or any nominee of the Subcustodian) as custodian of
the Fund, issue a receipt or make the deposits into the Margin Account and the
Senior Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
each such closing-out: (a) the Series for which such transaction is being made;
(b) the name of the issuer and the title of the Security; (c) the number of
shares or the principal amount, and accrued interest or dividends, if any,
required to effect such closing-out to be delivered to the broker; (d) the dates
of closing-out and settlement; (e) the purchase price per unit; (f) the net
total amount payable to the Fund upon such closing-out; (g) the net total amount
payable to the broker upon such closing-out; (h) the amount of cash and the
amount and kind of Securities to be withdrawn, if any, from the Margin Account;
(i) the amount of cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account; and (j) the name of the broker
through whom the Fund is effecting such closing-out. The Subcustodian shall,
upon receipt of the net total amount payable to the fund upon such closing-out,
and the return and/or cancellation of the receipts, if any, issued by the
Subcustodian with respect to the short sale being closed-out, pay out of the
money held for the account of the Fund to the broker the net total amount
payable to the broker, and make the withdrawals from the Margin Account and the
Senior Security Account, as the same are specified in the Certificate.
ARTICLE X.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement with
respect to Securities and money held by the Subcustodian hereunder, the Fund
shall deliver to the Subcustodian a Certificate, or in the event such Reverse
Repurchase Agreement is a Money Market Security, a Certificate or Oral
Instructions specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Fund in connection
with such Reverse Repurchase Agreement and specifically allocated to such
Series; (c) the broker or dealer through or with whom the Reverse Repurchase
Agreement is entered; (d) the amount and kind of Securities to be delivered by
the Fund to such broker or dealer; (e) the date of such Reverse Repurchase
Agreement; and (f) the amount of cash and/or the amount and kind of Securities,
if any, specifically allocated to such Series to be deposited in a Senior
Security Account for such Series in connection with such Reverse Repurchase
Agreement. The Subcustodian shall, upon receipt of the total amount payable to
the Fund specified in the Certificate or Oral Instructions make the delivery to
the broker or dealer, and the deposits, if any, to the Senior Security Account,
specified in such Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money Market
Security, a Certificate or Oral Instructions to the Subcustodian specifying: (a)
the Reverse Repurchase Agreement being terminated and the Series for which same
was entered; (b) the total amount payable by the Fund in connection with such
termination; (c) the amount and kind of Securities to be received by the Fund
and specifically allocated to such Series in connection with such termination;
(d) the date of termination; (e) the name of the broker or dealer with or
through whom the Reverse Repurchase Agreement is to be terminated; and (f) the
amount of cash and/or the amount and kind of Securities to be withdrawn from the
Senior Security Account for such Series. The Subcustodian shall, upon receipt of
the amount and kind of Securities to be received by the Fund specified in the
Certificate or Oral Instructions, make the payment to the broker or dealer, and
the withdrawals, if any, from the Senior Security Account, specified in such
Certificate or Oral Instructions.
ARTICLE XI.
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Subcustodian hereunder, the Fund shall deliver
or cause to be delivered to the Subcustodian a Certificate specifying with
respect to each such loan: (a) the Series to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the title of the
Securities; (c) the number of shares or the principal amount loaned, (d) the
date of loan and delivery; (e) the total amount to be delivered to the
Subcustodian against the loan of the Securities, including the amount of cash
collateral and the premium, if any, separately identified, and (f) the name of
the broker, dealer, or financial institution to which the loan was made. The
Subcustodian shall deliver the Securities thus designated to the broker, dealer
or financial institution to which the loan was made upon receipt of the total
amount designated as to be delivered against the loan of Securities. The
Subcustodian may accept payment in connection with a delivery otherwise than
through the Book-Entry System or Depository only in the form of a certified or
bank cashier's check payable to the order of the Fund or the Subcustodian drawn
on New York Clearing House funds and may delivery Securities in accordance with
the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Fund, the Fund shall deliver or cause to be delivered to the Subcustodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the Series to which the loaned Securities are specifically
allocated; (b) the name of the issuer and the title of the Securities to be
returned; (c) the number of shares or the principal amount to be returned; (d)
the date of termination; (e) the total amount to be delivered by the
Subcustodian (including the cash collateral for such Securities minus any
offsetting credits as described in said Certificate), and (f) the name of the
broker, dealer, or financial institution from which the Securities will be
returned. The Subcustodian shall receive all Securities returned from the
broker, dealer, or financial institution to which such Securities were loaned
and upon receipt thereof shall pay, out of the money held for the account of the
Fund, the total amount payable upon such return of Securities as set forth in
the Certificate.
3. Subcustodian may lend securities of the Fund, and invest any
collateral received in exchange for such Securities, only pursuant to a separate
valid and binding securities lending agreement between Subcustodian and the
Fund, the terms and conditions of which agreement shall govern the lending of
any such Securities, the investment of any collateral, and related rights and
obligations thereunder. Such Agreement may provide that in the case of any
inconsistency between the terms of this Agreement and those of any such
securities lending agreement, the terms and conditions of such latter agreement
shall take precedence.
ARTICLE XII.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY ACCOUNTS,
AND COLLATERAL ACCOUNTS
The Subcustodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Subcustodian. Such Certificate shall specify the Series for
which such deposit or withdrawal is to be made and the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such Series.
In the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the principal amount
of any particular Securities to be deposited by the Subcustodian into, or
withdrawn from, a Senior Security Account, the Subcustodian shall be under no
obligation to make any such deposit or withdrawal and shall so notify the Fund.
2. The Subcustodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or Clearing Member in
whose name, or for whose benefit, the account was established as specified in
the Margin Account Agreement.
3. Amounts received by the Subcustodian as payments or distributions
with respect to Securities deposited in any Margin Account shall be dealt with
in accordance with the terms and conditions of the Margin Account Agreement.
4. The Subcustodian shall have a continuing lien and security interest
in and to any property at any time held by the Subcustodian in any Collateral
Account described herein.
In accordance with applicable law the Subcustodian may enforce its lien and
realize on any such property whenever the Subcustodian has made payment or
delivery pursuant to any Put Option guarantee letter or similar document or any
receipt issued hereunder by the Subcustodian. In the event the Subcustodian
should realize on any such property net proceeds which are less than the
Subcustodian's obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the Subcustodian
by the Fund within the scope of Article XV herein.
5. On each business day the Subcustodian shall furnish the Fund with a
statement with respect to each Margin Account in which money or Securities are
held specifying as of the close of business on the previous business day: (a)
the name of the Margin Account; (b) the amount and kind of Securities held
therein; and (c) the amount of money held therein. The Subcustodian shall make
available upon request to any broker, dealer, or futures commission merchant
specified in the name of a Margin Account a copy of the statement furnished the
Fund with respect to such Margin Account.
6. Promptly after the close of business on each business day in which
cash and/or Securities are maintained in a Collateral Account for any Series,
the Subcustodian shall furnish the Fund with a statement with respect to such
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding the
delivery to the Fund of such statement, the Fund shall furnish to the
Subcustodian a Certificate specifying the then market value of the Securities
described in such statement. In the event such then market value is indicated to
be less than the Subcustodian's obligations with respect to any outstanding Put
Option guarantee letter or similar document, the fund shall promptly specify in
a Certificate the additional cash and/or Securities to be deposited in such
Collateral Account to eliminate such deficiency.
7. It is expressly understood as between Subcustodian and the Fund that
the obligations and liabilities of each Series hereunder shall be maintained
separate and apart from the liabilities and obligations of any other Series, and
that under no circumstances may the assets of one Series be used or applied
hereunder by the Subcustodian for the account or benefit of any other Series.
Subcustodian further agrees that any liens or security interests which it holds
with respect to the securities or assets of one Series may not be used to
satisfy any obligations or claims owed to the Subcustodian under this Article
XII or otherwise by any other Series.
ARTICLE XIII.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Subcustodian a copy of the resolution
of the Board of Trustees of the Fund, certified by the Secretary or any
Assistant Secretary, either (i) setting forth with respect to the Series
specified therein the date of the declaration of a dividend or distribution, the
date of payment thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to the
Dividend Agent and any sub-dividend agent or co-dividend agent of the Fund on
the payment date, or (ii) authorizing with respect to the Series specified
therein the declaration of dividends and distributions on a daily basis and
authorizing the Subcustodian to rely on Oral Instructions or a Certificate
setting forth the date of the declaration of such dividend or distribution, the
date of payment thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to the
Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Oral
Instructions or Certificate, as the case may be, the Subcustodian shall pay out
of the money held for the account of each Series the total amount payable to the
dividend agent and any sub-dividend agent or co-dividend agent of the Fund with
respect to such Series.
ARTICLE XIV.
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver to the
Subcustodian a Certificate duly specifying:
(a) the Series, the number of Shares sold, trade date, and price; and
(b) the amount of money to be received by the Subcustodian for
the sale of such Shares and specifically allocated to the separate account in
the name of such Series.
2. Upon receipt of such money from the transfer agent, the Subcustodian
shall credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Subcustodian shall pay, out of the money held
for the account of such Series, all original issue or other taxes required to be
paid by the Fund in connection with such issuance upon the receipt of a
Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Subcustodian to make payment out of the money held by the Subcustodian hereunder
in connection with a redemption of any Shares, it shall furnish to the
Subcustodian a Certificate specifying:
(a) the number and Series of Shares redeemed; and
(b) the amount to be paid for such Shares.
5. Upon receipt from the transfer agent of an advice setting forth the
Series and number of Shares received by the transfer agent for redemption and
that such Shares are in good form for redemption, the Subcustodian shall make
payment to the transfer agent out of the money held in the separate account in
the name of the Series the total amount specified in the Certificate issued
pursuant to the foregoing paragraph 4 of this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, the Subcustodian,
unless otherwise instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is in good form for
redemption in accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the money held in
the separate account of the Series of the Shares being redeemed.
ARTICLE XV.
OVERDRAFTS OR INDEBTEDNESS
1. If the Subcustodian should in its sole discretion advance funds on
behalf of any Series which results in an overdraft because the money held by the
Subcustodian in the separate account for such Series shall be insufficient to
pay the total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate or Oral Instructions, or
which results in an overdraft in the separate account or such Series for some
other reason, or if the Fund is for any other reason indebted to the
Subcustodian with respect to a Series, including any indebtedness to The Bank of
New York under the Fund's Cash Management and Related Services Agreement (except
a borrowing for investment or for temporary or emergency purposes using
Securities for collateral pursuant to a separate agreement and subject to the
provisions of paragraph 2of this Article), such overdraft or indebtedness shall
be deemed to be a loan made by the Subcustodian to the Fund for such Series
payable on demand and shall bear interest from the date incurred at a rate per
annum (based on a 360-day year for the actual number of days involved) equal to
1/2% over Subcustodian's prime commercial lending rate in effect from time to
time, such rate to be adjusted on the effective date of any change in such prime
commercial lending rate but in no event to be less than 6% per annum. In
addition, the Fund hereby agrees that the Subcustodian shall have a continuing
lien, security interest, and security entitlement in and to any property
including any investment property or any financial asset specifically allocated
to such Series at any time held by it for the benefit of such Series or in which
the Fund may have an interest which is then in the Subcustodian's possession or
control or in possession or control of any third party acting in the
Subcustodian's behalf. The Fund authorizes the Subcustodian, in its sole
discretion, at any time to charge any such overdraft or indebtedness together
with interest due thereon against any balance of account standing to such
Series' credit on the Subcustodian's books. In addition, the Fund hereby
covenants that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business the Fund
had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall
prior to 9 a.m., New York City time, advise the Subcustodian, in writing, of
each such borrowing, shall specify the Series to which the same relates, and
shall not incur any indebtedness not so specified other than from the
Subcustodian.
2. The Fund will cause to be delivered to the Subcustodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Subcustodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities held by the Subcustodian hereunder as
collateral for such borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such bank will loan to
the Fund against delivery of a stated amount of collateral. The Fund shall
promptly deliver to the Subcustodian a Certificate specifying with respect to
each such borrowing: (a) the Series to which such borrowing relates; (b) the
name of the bank, (c) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note, duly endorsed
by the Fund, or other loan agreement, (d) the time and date, if known, on which
the loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the Investment Company Act
and the Fund's prospectus. The Subcustodian shall deliver on the borrowing date
specified in a Certificate the specified collateral and the executed promissory
note, if any, against delivery by the lending bank of the total amount of the
loan payable, provided that the same conforms to the total amount payable as set
forth in the Certificate. The Subcustodian may, at the option of the lending
bank, keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any promissory
note or loan agreement. The Subcustodian shall deliver such Securities as
additional collateral as may be specified in a Certificate to collateralize
further any transaction described in this paragraph. The Fund shall cause all
Securities relates from collateral status to be returned directly to the
Subcustodian, and the Subcustodian shall receive from time to time such return
of collateral as may be tendered to it. In the event that the Fund fails to
specify in a Certificate the Series, the name of the issuer, the title and
number of shares or the principal amount of any particular Securities to be
delivered as collateral by the Subcustodian, the Subcustodian shall not be under
any obligation to deliver any Securities.
ARTICLE XVI.
INSTRUCTIONS
1. With respect to any software provided by the Subcustodian to the
Fund in order for the Fund to transmit Instructions to the Subcustodian (the
"Software"), the Subcustodian grants to such Fund a personal, nontransferable
and nonexclusive license to use the Software solely for the purpose of
transmitting Instructions to, and receiving communications from, the
Subcustodian in connection with its account(s). The Fund shall use the Software
solely for its own internal and proper business purposes, and not in the
operation of a service bureau, and agrees not to sell, reproduce, lease or
otherwise provide, directly or indirectly, the Software or any portion thereof
to any third party without the prior written consent of the Subcustodian. The
Fund acknowledges that the Subcustodian and the suppliers have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either) or
statutory or legal protections available with respect thereof. The Fund further
acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by the Subcustodian or
its suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall the Fund attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy, sell,
lease or provide, directly or indirectly, any of the Software or any portion
thereof to any other person or entity without the Subcustodian's prior written
consent. The Fund may not remove any statutory copyright notice, or other notice
including the software or on any media containing the Software. The Fund shall
reproduce any such notice on any reproduction of the Software and shall add
statutory copyright notice or other notice to the Software or media upon the
Bank's request. Subcustodian agrees to provide reasonable training, instruction
manuals and access to Subcustodian's "help desk" in connection with the Fund's
user support necessary to use of the Software. At the Fund's request,
Subcustodian agrees to permit reasonable testing of the Software by the Fund.
2. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize the Software and transmit Instructions to the
Subcustodian. The Subcustodian shall not be responsible for the reliability,
compatibility with the Software or availability of any such equipment or
services or the performance or nonperformance by any nonparty to this Custody
Agreement.
3. The Fund acknowledges that the Software, all data bases made
available to the Fund by utilizing the Software (other than data bases relating
solely to the assets of the Fund and transactions with respect thereto), and any
proprietary data, processes, information and documentation (other than which are
or become part of the public domain or are legally required to be made available
to the public) (collectively, the "Information"), are the exclusive and
confidential property of the Subcustodian. The Fund shall keep the Information
confidential by using the same care and discretion that the Fund uses with
respect to its own confidential property and trade secrets and shall neither
make nor permit any disclosure without the prior written consent of the
Subcustodian. Upon termination of this Agreement or the Software license granted
hereunder for any reason, the Fund shall return to the Subcustodian all copies
of the Information which are in its possession or under its control or which the
Fund distributed to third parties. The provisions of this Articles shall not
affect the copyright status of any of the Information which may be copyrighted
and shall apply to all Information whether or not copyrighted.
4. The Subcustodian reserves the right to modify, at its own expense,
the Software from time to time without prior notice and the Fund shall install
new releases of the Software as the Subcustodian may direct. The Fund agrees not
to modify or attempt to modify the Software without the Subcustodian's prior
written consent. The Fund acknowledges that any modifications to the Software,
whether by the Fund or the Subcustodian and whether with or without the
Subcustodian's consent, shall become the property of the Subcustodian.
5. The Subcustodian and its manufacturers and suppliers make no
warranties or representations of any kind with regard to the Software or the
method(s) by which the Fund may transmit Instructions to the Subcustodian,
express or implied, including but not limited to any implied warranties of
merchantability or fitness for a particular purpose.
6. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND AGREES THAT IT WILL NOT UNDER ANY CIRCUMSTANCES RESELL,
DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM)
IN OR TO ANY OTHER COUNTRY. IF THE SUBCUSTODIAN DELIVERS THE SOFTWARE TO THE
FUND OUTSIDE THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES
IN ACCORDANCE WITH EXPORT ADMINISTRATIVE REGULATIONS. DIVERSION CONTRARY TO U.S.
LAWS PROHIBITED. The Fund hereby authorizes Subcustodian to report its name and
address to government agencies to which Subcustodian is required to provide such
information by law.
7. Where the method for transmitting Instructions by the Fund involves
an automatic systems acknowledgment by the Subcustodian of its receipt of such
Instructions, then in the absence of such acknowledgment the Subcustodian shall
not be liable for any failure to act pursuant to such Instructions, the Fund may
not claim that such Instructions were received by the Subcustodian, and the Fund
shall deliver a Certificate by some other means.
8. (a) The Fund agrees that where it delivers to the Subcustodian
Instructions hereunder, it shall be the Fund's sole responsibility to ensure
that only persons duly authorized by the Fund transmit such Instructions to the
Subcustodian. The Fund will cause all persons transmitting Instructions to the
Subcustodian to treat applicable user and authorization codes, passwords and
authentication keys with extreme care, and irrevocably authorizes the
Subcustodian to act in accordance with and rely on Instructions received by its
pursuant hereto.
(b) The Fund hereby represents, acknowledges and agrees that
it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to the Subcustodian and that there may be
more secure methods of transmitting instructions to the Subcustodian than the
method(s) selected by the Fund. The Fund hereby agrees that the security
procedures (if any) to be followed in connection with the Fund's transmission of
Instructions provide to it a commercially reasonable degree of protection in
light of its particular needs and circumstances.
9. The Fund hereby represents, warrants and covenants to the
Subcustodian that this Agreement has been duly approved by a resolution of its
Board of Trustees, and that its transmission of Instructions pursuant hereto
shall at all times comply with the Investment Company Act.
10. The Fund shall notify the Subcustodian of any errors, omissions or
interruptions in, or delay or unavailability of, its ability to send
Instructions as promptly as practicable, and in any event, within 24 hours after
the earliest of (i) discovery thereof, (ii) the Business day on which discovery
should have occurred through the exercise of reasonable care and (iii) in the
case of any error, the date of actual receipt of the earliest notice which
reflects such error, it being agreed that discovery and receipt of notice may
only occur on a business day. The Subcustodian shall promptly advise the Fund
whenever the Subcustodian learns of any errors, omissions or interruption in, or
delay or unavailability of, the Fund's ability to send Instructions.
11. Subcustodian will indemnify and hold harmless the Fund with respect
to any liability, damages, loss or claim or infringement against any patent,
copyright, license or other property right arising out or by reason of the
Fund's use of the Software in the form provided under this Section. Subcustodian
at its own expense will defend such action or claim brought against the Fund to
the extent that it is based on a claim that the Software in the form provided by
Subcustodian infringes any patents, copyrights, license or other property right,
provided that Subcustodian is provided with reasonable written notice of such
claim, provided that the Fund has not settled, compromised or confessed any such
claim without the Subcustodian's written consent, in which event Subcustodian
shall have no liability or obligation hereunder, and provided Fund cooperates
with and assists Subcustodian in the defense of such claim. Subcustodian shall
have the rights to control the defense of all such claims, lawsuits and other
proceedings. If, as a result of any claim of infringement against any patent,
copyright, license or other property right, Subcustodian is enjoined from using
the Software, or if Subcustodian believes that the System is likely to become
the subject of a claim of infringement, Subcustodian at its option may in its
sole discretion either (a) at its expenses procure the right for the Fund to
continue to use the Software, or (b), replace or modify the Software so as to
make it noninfringing, or (c) may discontinue the license granted herein upon
written notice to Customer.
ARTICLE XVII.
DUTIES OF THE SUBCUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Subcustodian is authorized and instructed to employ, as
subcustodian for each Series' Securities for which the primary market is outside
the United States ("Foreign Securities") and other assets, the foreign banking
institutions and foreign securities depositories and clearing agencies designed
on Schedule I hereto ("Foreign Sub-Custodians). The Fund may designate any
additional foreign sub-custodian with which the Subcustodian has an agreement
for such entity to act as the Subcustodian's agent, as its subcustodian and any
such additional foreign sub-custodian shall be deemed added to Schedule I. Upon
receipt of a Certificate from the Fund, the Subcustodian shall cease the
employment of any one or more Foreign Sub-Custodians for maintaining custody of
the Fund's assets and such Foreign Sub-Custodian shall be deemed deleted from
Schedule I.
2. Each delivery of a Certificate to the Subcustodian in connection
with a transaction involving the use of a Foreign Sub-Custodian shall constitute
a representation and warranty by the Fund that its Board of Trustees, or its
third party foreign custody manager as defined in Rule 17f-5 under the
Investment Company Act if any, has determined that use of such Foreign
Sub-Custodian satisfies the requirements of the Investment Company Act and such
Rule 17f-5 thereunder.
3. The Subcustodian shall identify on its books as belonging to each
Series of the Fund the Foreign Securities of such Series held by each Foreign
Sub-Custodian. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Subcustodian with respect to any claims by the
Fund or any Series against a Foreign Sub-Custodian as a consequence of any loss,
damage, cost, expense, liability or claim sustained or incurred by the Fund or
any Series if and to the extent that the Fund or such Series has not been made
whole for any such loss, damage, cost, expense, liability or claim.
4. Upon request of the Fund, the Subcustodian will, consistent with the
terms of the applicable Foreign Sub-Custodian agreement, use reasonable efforts
to arrange for the independent accountants of the Fund to be afforded access to
the books and records of any Foreign Sub-Custodian insofar as such books and
records relate to the performance of such Foreign Sub-Custodian under its
agreement with the Subcustodian on behalf of the Fund.
5. The Subcustodian will supply to the Fund from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Series held by Foreign Sub-Custodian, including but not limited to an
identification of entities having possession of each Series' Foreign Securities
and other assets, and advices or notifications of any transfers of Foreign
Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for the Subcustodian on behalf of the Series.
6. The Subcustodian shall transmit promptly to the Fund all notices,
reports or other written information received pertaining to the Fund's Foreign
Securities, including without limitation, notices of corporate action, proxies
and proxy solicitation materials.
7. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any Series and
delivery of securities maintained for the account of such Series may be effected
in accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of securities to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) against a receipt with the expectation of receiving later payment for
such securities from such purchaser or dealer.
8. Notwithstanding any other provision in this Agreement to the
contrary, with respect to any losses or damages arising out of or relating to
any actions or omissions of any Foreign Sub-Custodian the sole responsibility
and liability of the Subcustodian shall be to take appropriate action, in
cooperation with the Custodian, at the Fund's expense to recover such loss or
damage from the Foreign Sub-Custodian. It is expressly understood and agreed
that the Subcustodian's sole responsibility and liability for the actions and
omissions of any Foreign Sub-Custodian shall be limited to amounts so recovered
from the Foreign Sub-Custodian.
9. Subcustodian shall promptly notify the Fund and the Custodian if (a)
any Foreign Sub-Custodian employed under this Agreement ceases to be an
`Eligible Foreign Subcustodian' within the meaning of rule 17f-5 under the
Investment Company Act, or (b) the Subcustodian obtains actual knowledge that a
Foreign Sub-Custodian has committed or become the subject of an Act of
Insolvency.
ARTICLE XVIII.
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the Fund shall
promptly deliver to the Subcustodian a Certificate or Oral Instructions
specifying with respect the such FX Transaction: (a) the Series to which such FX
Transaction is specifically allocated; (b) the type and amount of Currency to be
purchased by the Fund; (c) the type and amount of Currency to be sold by the
Fund; (d) the date on which the Currency to be purchased is to be delivered; (e)
the date on which the Currency to be sold is to be deliver; and (f) the name of
the person from whom or through whom such currencies are to be purchased or
sold. Unless otherwise instructed by a Certificate or Oral Instructions, the
Subcustodian shall deliver, or shall instruction a Foreign Sub-Custodian to
deliver, the Currency to be sold on the date on which such delivery is to be
made, as set forth in the Certificate, and shall receive, or instruct a Foreign
Sub-Custodian to receive, the Currency to be purchased on the date as set forth
in the Certificate.
2. Where the Currency to be sold is to be delivered on the same day as
the Currency to be purchased, as specified in the Certificate or Oral
Instructions, the Subcustodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt and
delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
3. Any FX Transaction effected by the Subcustodian in connection with
this Agreement may be entered with the Subcustodian, any office, branch or
subsidiary of The Bank of New York Company, Inc., or any Foreign Sub-Custodian
acting as principal or otherwise through customary banking channels, subject to
the terms and conditions of any Instructions or Certificate issued by the Fund.
The Fund may issue a standing Certificate with respect to FX Transaction but the
Subcustodian may establish rules or limitations concerning any foreign exchange
facility made available to the Fund. The Fund shall bear all risks of investing
in Securities or hold Currency. Without limiting the foregoing, the Fund shall
bear the risks that rules or procedures imposed by a Foreign Sub-Custodian or
foreign depositories, exchange controls, asset freezes or other laws, rules,
regulations or orders shall prohibit or impose burdens or costs on the transfer
to, by or for the account of the Fund of Securities or any cash held outside the
Fund's jurisdiction or denominated in Currency other than its home jurisdiction
or the conversion of cash from one Currency into another currency. The
Subcustodian shall not be obligated to substitute another Currency for a
Currency (including a Currency that is a component of a Composite Currency Unit)
whose transferability, convertibility or availability has been affected by such
law, regulation, rule or procedure. Neither the Subcustodian nor any Foreign
Sub-Custodian shall be liable to the Fund for any loss resulting from any of the
foregoing events.
ARTICLE XIX.
CONCERNING THE CUSTODIAN AND SUBCUSTODIAN
1. Except as hereinafter provided, or as provided in Article XVII,
neither the Custodian nor the Subcustodian nor any nominee thereof, shall be
liable for any loss or damage, including counsel fees, resulting from its action
or omission to act or otherwise, either hereunder or under any Margin Account
Agreement, except for any such loss or damage arising out of its own negligence
or willful misconduct or (ii) breach of the warranties in paragraph 17 of this
Article. In no event shall the Custodian or Subcustodian be liable to the Fund,
or any third party, nor shall the Subcustodian be liable to the Custodian, for
special, indirect or consequential damages or lost profits or loss of business,
arising under or in connection with this Agreement, even if previously informed
of the possibility of such damages and regardless of the form of action. The
Custodian and the Subcustodian each may, with respect to questions of law
arising hereunder or under any Margin Account Agreement, apply for and obtain
the advice and opinion of counsel to the Fund, or of its own counsel, at the
expense of the Fund, and shall be fully protected with respect to anything done
or omitted by it in good faith in conformity with such advice or opinion. The
Custodian and the Subcustodian each shall be liable to the Fund for any loss or
damage resulting from the use of the Book-Entry System or any Depository arising
by reason of any negligence or willful misconduct on the part of the Custodian
or Subcustodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, neither the
Custodian nor the Subcustodian shall be under any obligation to inquire into,
and shall not be liable under this Agreement for:
(a) the validity of the issue of any Securities purchased,
sold, or written by or for the Fund, the legality of the purchase, sale or
writing thereof, or the property of the amount paid or received therefor;
(b) the legality of the sale or redemption of any Shares, or
the property of the amount to be received or paid therefor;
(c) the legality of the declaration or payment of any
dividend by the Fund;
(d) the legality of any borrowing by the Fund using Securities
as collateral;
(e) except as is provided in any securities lending agreement
between the Custodian or the Subcustodian and the Fund, the legality of any loan
of portfolio Securities, nor shall the Custodian or the Subcustodian be under
any duty or obligation to see to it that any cash collateral delivered to it by
a broker, dealer, or financial institution or held by it at any time as a result
of such loan of portfolio Securities of the Fund is adequate collateral for the
Fund against any loss it might sustain as a result of such loan. Neither
Custodian nor the Subcustodian specifically, but not by way of limitation, shall
be under any duty or obligation periodically to check or notify the Fund that
the amount of such cash collateral held by it for the Fund is sufficient
collateral for the Fund, but such duty or obligation shall be the sole
responsibility of the Fund. In addition, neither the Custodian nor the
Subcustodian shall be under any duty or obligation to see that any broker,
dealer or financial institution to which portfolio Securities of the Fund are
lent pursuant to Article XI of this Agreement makes payment to it of any
dividends or interest which are payable to or for the account of the Fund during
the period of such loan or at the termination of such loan, provided, however,
that the Subcustodian shall promptly notify the Fund and the Custodian in the
event that such dividends or interest are not paid and received when due; or
(f) the sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Fund. In addition, neither the
Custodian nor the Subcustodian shall be under any duty or obligation to see that
any broker, dealer, futures commission merchant or Clearing Member makes payment
to the Fund of any variation margin payment or similar payment which the Fund
may be entitled to receive from such broker, dealer, futures commission merchant
or Clearing Member, to see that any payment received by the Subcustodian from
any broker, dealer, futures commission merchant or Clearing Member is the amount
the Fund is entitled to receive, or to notify the Fund of the Subcustodian's
receipt or non-receipt of any such payment.
3. Neither the Custodian nor the Subcustodian shall be liable for, or
considered to be the Custodian or Subcustodian of, any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by it on behalf of the Fund until the Custodian or the Subcustodian,
whichever the case may be, actually receives and collects such money directly or
by the final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
4. Neither the Custodian nor the Subcustodian shall have any
responsibility and shall not be liable for ascertaining or acting upon any
class, conversions, exchange offers, tenders, interest rate changes or similar
matters relating to Securities held in the Depository, unless the Custodian or
the Subcustodian, whichever the case may be, shall have actually received timely
notice from the Depository. In no event shall the Custodian or the Subcustodian
have any responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the Depository of any
amount payable upon Securities deposited in the Depository which may be mature
or be redeemed, retired, called or otherwise become payable. However, upon
receipt of a Certificate from the Fund of an overdue amount on Securities held
in the Depository the Custodian or the Subcustodian shall make a claim against
the Depository on behalf of the Fund, except that neither the Custodian or the
Subcustodian shall be under any obligation to appear in, prosecute or defend any
action, suit or proceeding in respect to any Securities held by the Depository
which in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required.
5. Neither the Custodian nor the Subcustodian shall be under any duty
or obligation to take action to effect collection of any amount due to the Fund
from the transfer agent of the Fund nor to take any action to effect payment or
distribution by the transfer agent of the Fund of any amount paid by the
Custodian or the Subcustodian to the transfer agent of the Fund in accordance
with this Agreement.
6. Neither the Custodian nor the Subcustodian shall be under any duty
or obligation to take action to effect collection of any amount if the
Securities upon which such amount is payable are in default, or if payment is
refused after due demand or presentation, unless and until (i) it shall be
directed to take such action by a Certificate and (ii) it shall be assured to
its satisfaction of reimbursement of its costs and expenses in connection with
any such action.
7. The Subcustodian, with the consent of the Custodian, may in addition
to the employment of Foreign Sub-Custodians pursuant to Article XVII appoint one
or more banking institutions as Depository or Depositories, as Subcustodian or
Subcustodians, or as Co-Custodian or Co-Custodians including, but not limited
to, banking institutions located in foreign countries, of Securities and money
at any time owned by the Fund, upon such terms and conditions as may be approved
in a Certificate or contained in an agreement executed by the Subcustodian, the
Fund and the appointed institution.
8. Neither the Custodian nor the Subcustodian shall be under any duty
or obligation (a) to ascertain whether any Securities at any time delivered to,
or held by it or by any Foreign Sub-Custodian, for the account of the Fund and
specifically allocated to a Series are such as properly may be held by the Fund
or such Series under the provisions of its then current prospectus, or (b) to
ascertain whether any transactions by the Fund, whether or not involving the
Custodian or the Subcustodian, are such transactions as may properly be engaged
in by the Fund.
9. The Custodian and the Subcustodian each shall be entitled to receive
and the Fund agrees to pay to the Custodian and the Subcustodian all
out-of-pocket expenses as may be agreed upon from time to time between and/or
among the Custodian, the Subcustodian and the Fund. The Subcustodian may charge
any expenses with respect to a Series incurred by the Custodian or the
Subcustodian in the performance of its duties pursuant to such agreement against
any money specifically allocated to such Series. Unless and until the Fund
instructs the Custodian or the Subcustodian by a Certificate to apportion any
loss, damage, liability or expense among the Series in a specified manner, the
Custodian or the Subcustodian shall also be entitled to charge against any money
held by it for the account of a Series such Series' pro rata share (based on the
ratio of such Series' net asset value at the time of the charge to the aggregate
net asset value of all Series at that time) of the amount of any loss, damage,
liability or expense, including counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. In addition to the
foregoing, the expenses for which the Subcustodian shall be entitled to
reimbursement hereunder shall include, but are not limited to, the expenses of
subcustodians and foreign branches of the Subcustodians incurred in settling
outside of New York City transactions involving the purchase and sale of
Securities of the Fund.
10. The Custodian and the Subcustodian each shall be entitled to rely
upon any Certificate, notice or other instrument in writing received by it and
reasonably believed by it to be a Certificate. The Custodian and the
Subcustodian each shall be entitled to rely upon any Oral Instructions actually
received by it hereinabove provided for. The Fund agrees to forward to the
Custodian and the Subcustodian a Certificate or facsimile thereof confirming
such Oral Instructions in such manner so that such Certificate or facsimile
thereof is received by the Custodian and the Subcustodian, whether by hand
delivery, telecopier or other similar device, or otherwise, by the close of
business of the same day that such Oral Instructions are given to the Custodian
or the Subcustodian. The Fund agrees that the fact that such confirming
instructions are not received, or that contrary instructions are received, by
the Subcustodian shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that neither the Custodian nor the Subcustodian shall incur any liability
to the Fund in acting upon Oral Instructions given to the Custodian or the
Subcustodian hereunder concerning such transactions provided such instructions
reasonably appear to have been received from an Authorized Person.
11. The Custodian and the Subcustodian each shall be entitled to rely
upon any instrument, instruction or notice received by the Custodian or the
Subcustodian and reasonably believed by the Custodian or the Subcustodian to be
given in accordance with the terms and conditions of any Margin Account
Agreement. Without limiting the generality of the foregoing, neither the
Custodian nor the Subcustodian shall be under any duty to inquire into, nor
shall be liable for, the accuracy of any statements or representations contained
in any such instrument or other notice including, without limitation, any
specification of any amount to be paid to a broker, dealer, futures commission
merchant or Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of either the Custodian or the Subcustodian shall be the property of
the Fund. Such books and records shall be prepared and maintained as required by
the Investment Company Act and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records during the Custodian's and the Subcustodian's
normal business hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by the Custodian or the Subcustodian to
the Fund or the Fund's authorized representative, and the Fund shall reimburse
the Custodian or the Subcustodian its expenses of providing such copies. Upon
reasonable request of the Fund, the Custodian or the Subcustodian shall provide
in hard copy or on micro-film, whichever the Custodian or the Subcustodian on a
computer disc, or are similarly maintained, and the Fund shall reimburse the
Custodian or the Subcustodian for its expenses of providing such hard copy or
micro-film.
13. The Custodian or the Subcustodian shall provide the Fund with any
report obtained by the Custodian or the Subcustodian on the system of internal
accounting control of the Book-Entry System, the Depository or O.C.C., and with
such reports on its own systems of internal accounting control as the Fund may
reasonably request from time to time.
14. The Fund agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands whatsoever,
including reasonable attorney's fees, howsoever arising or incurred because of,
or in connection with, this Agreement, including any liability, claim, loss or
demand arising out of or incurred by reason of any Instruction or Certificate
given by the Fund directly to Subcustodian as provided in paragraph 4 of Article
II hereof, except for any such liability, claim, loss or demand arising out of
the Custodian's own negligence or willful misconduct, or breach of the
warranties, if applicable, in paragraph 17 of this Article.
15. The Fund and the Custodian, jointly and severally, each agree to
indemnify the Subcustodian against and save the Subcustodian harmless from all
liability, claims, losses and demands whatsoever, including reasonable
attorney's fees, howsoever arising or incurred because of or in connection with
this Agreement, including the Subcustodian's payment or non-payment of checks
pursuant to paragraph 6 of Article XIV as part of any check redemption privilege
program of the Fund, except for any such liability, claim, loss or demand
arising out of the Subcustodian's own negligence or willful misconduct, or
breach of the warranties in paragraph 17 of this Article.
16. Subject to the foregoing provisions of this Agreement, including,
without limitation, those contained in Article XVII and XVIII the Subcustodian
may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payment to be made and received by the Subcustodian
in accordance with the customs prevailing from time to time among brokers or
dealers in such Securities. When the Subcustodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
the Subcustodian's delivery of Securities pursuant to instructions of the Fund,
which responsibility and liability shall continue until final payment in full
has been received by the Subcustodian.
17. (a) Subcustodian represents and warrants that the computer software
and hardware systems ("Systems") that are owned by Subcustodian and are used to
provide services under this Agreement (the "Services") are 2000 Compliant or
will be made 2000 Compliant before December 31, 1998.
As used herein, the term "2000 Compliant" means that the Systems will function
without material error caused by the introduction of dates falling on or after
January 1, 2000, and will not (a) fail or produce incorrect or inconsistent date
results, or (b) cause any other programs or hardware owned by the Subcustodian
to fail or to generate errors.
With respect to software and hardware that the Subcustodian licenses from third
parties and uses in providing the Services ("Third Party Hardware and
Software"), Subcustodian warrants that it has in place a program under which it
will use commercially reasonable efforts either (a) to contact such third
parties or their websites to obtain assurances that such Third Party Hardware
and Software is 2000 Compliant, or (b) to test the same by June 30, 1999 to
certify, in accordance with Subcustodian's standard practices that the Third
Party Hardware and Software is 2000 Compliant.
If Subcustodian cannot so certify or obtain such assurances that any Third Party
Hardware and Software is 2000 Compliant, Subcustodian will use commercially
reasonable efforts to replace such Third Party Hardware and Software with
hardware or software that is warranted or certified by its vendor as 2000
Compliant, if such replacement is available, compatible with Subcustodian's
Systems, and deemed by Subcustodian as appropriate under the circumstances.
In the event that Subcustodian has contracts with third party financial
institution service providers to provide the Services or any portion thereof
("Third Party Services"), Subcustodian warrants that it has in place a program
under which it will use commercially reasonable efforts to contact such
providers of Third Party Services to obtain assurances that such Third Party
Services are 2000 Compliant.
Notwithstanding the foregoing, the Fund and Custodian each acknowledges and
agrees that Subcustodian does not warrant that Systems, Third Party Hardware and
Software, and/or Third Party Services will continue to interface with the
hardware, firmware, software (including operating systems), records or data used
by Customer or third parties, nor does Subcustodian warrant that any public
utility, communications service provider, stock exchange or funds transfer
network will be 2000 Compliant.
Either the Fund or Custodian shall have the right to discuss with Subcustodian
the efforts made by Subcustodian under this Section, and Subcustodian promptly
shall provide reasonable responses. If, during the period of time commencing
December 1, 1998 and ending January 1, 2000, either the Fund or the Custodian in
its sole discretion determines that Subcustodian has not taken sufficient
measures to cause, or has not obtained written assurance that, as the case may
be, the Systems, the Third Party Hardware and Software, or the Third Party
Services are or by the respective dates listed above will be 2000 Compliant,
then either the Fund or the Custodian shall have the right, upon 30 (thirty)
days written notice to Subcustodian, to terminate this Agreement as to the
Subcustodian without penalty at any time prior to January 1, 2000, anything in
this Agreement to the contrary notwithstanding. In the event of any such
termination, Subcustodian shall not charge either the Fund or the Custodian the
costs and expenses of termination incurred by Subcustodian.
(b) The Fund and Custodian's sole remedy in the event of any
breach by Subcustodian of any representation, warranty or agreement contained in
immediately preceding sub-section (a) shall be the right, upon 30 (thirty) days
written notice to Subcustodian, to terminate this Agreement as to the
Subcustodian without penalty at any time, anything in this Agreement to the
contrary notwithstanding. In the event of any such termination, Subcustodian
shall not charge either the Fund or the Custodian the costs and expenses of
termination incurred by Subcustodian. In no event shall Subcustodian be liable
for any direct, indirect, special, consequential or punitive damages relating to
or arising out of any breach by Subcustodian of any such representation,
warranty, or agreement. The provisions of this sub-section (b) shall survive any
termination or expiration of this Agreement.
(c) (1) The Fund hereby makes the same representations and
warranties, and undertakes the same obligations, subject to the same remedy
described in preceding sub-section (b) with respect to computer software or
hardware owned by the Fund, software and hardware the Fund licenses from third
parties, and services obtained by the Fund from third parties, that Subcustodian
has made and undertaken in preceding sub-section (a), in each case to the extent
such software, hardware, or services are utilized by the Fund in fulfilling its
obligations to Subcustodian under this Agreement.
(2) The Fund and the Custodian each agrees to keep
confidential any information obtained from Subcustodian
in or with respect to year 2000 compliance (the "Information"), by using the
same care and discretion that the Fund and Custodian each uses with respect to
its own confidential property and trade secrets, and shall not make nor permit
any disclosure of all or any part of the Information without the prior written
consent of Subcustodian. The Fund and the Custodian each further agrees not to
contact any third party identified in the Information to discuss year 2000
compliance or issues related thereto. The obligation of the Fund and Custodian
each to maintain such confidentiality and not to contact any such third party
shall survive any termination of this Agreement.
(d) If the Custodian uses any Systems to provide any Services
under this Agreement, Custodian shall be deemed to make the same warranties with
respect to such Systems, and subject to the same terms and conditions, as are
made by the Subcustodian under this paragraph 17, and shall be entitled to rely
on the warranties made by the Fund under subparagraph (c)(1) of this paragraph.
ARTICLE XX.
TERMINATION
1. Any of the parties hereto may terminate this Agreement by giving to
the other parties a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the Board of Trustees of the Fund, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians, each of which shall be a bank
or trust company having not less than $50,000,000 aggregate unimpaired capital,
surplus and undivided profits. In the event such notice is given by the
Custodian or the Subcustodian, the Fund shall, on or before the termination
date, deliver to the Custodian and the Subcustodian a copy of a resolution of
the Board of Trustees of the Fund, certified by the Secretary or any Assistant
Secretary, designating a successor custodian or custodians. In the absence of
such designation by the Fund, the Custodian may designate a successor custodian
which shall be a bake or trust company having not less than $50,000,000
aggregate unimpaired capital, surplus and undivided profits. Upon the date set
forth in such notice this Agreement shall terminate (unless the same shall be
continued as provided in paragraph 3 of this Article), and the Subcustodian
shall upon receipt of a notice of acceptance by the successor custodian on that
date deliver directly to the successor custodian all Securities and money then
owned by the Fund and held by it as Subcustodian, after deducting all fees,
expenses and other amounts for the payment or reimbursement of which it shall
then be entitled.
2. Notwithstanding the foregoing, the Fund may terminate this Agreement
(x) thirty (30) days after the material breach of this Agreement by Custodian or
Subcustodian, which breach is not fully cured within such thirty days time, or
(y) immediately upon and effective as of the commission or occurrence of any Act
of Insolvency by Custodian or Subcustodian. The Custodian similarly may
terminate this Agreement as to Subcustodian for the reasons provided in, and in
accordance with the provisions of, (x) and (y) of this paragraph. If either the
Fund or the Custodian terminates this Agreement by reason of a breach or Act of
Insolvency by Subcustodian, this Agreement shall be deemed terminated as to
Subcustodian only and not as to Custodian, and the provisions of paragraph 3 of
this Article thereupon shall govern this Agreement.
3. Notwithstanding any other provisions of this Article, if either the
Fund or the Custodian terminates this Agreement as to Subcustodian only, or if
the Subcustodian terminates this Agreement as provided in paragraph 1 of this
Article, this Agreement shall continue in full force and effect with respect to
the Fund and the Custodian, and the Fund and the Custodian shall continue to be
bound by the terms and conditions of this Agreement, either with (i) the
Custodian performing all the duties and responsibilities of the Subcustodian
hereunder, including but not limited to those duties and responsibilities
specified in Articles IV through XVIII of this Agreement, and subject in all
respects to the terms, conditions and limitations of this Agreement, or (ii) a
successor Subcustodian which is mutually acceptable to the Fund and the
Custodian and which has agreed in writing to be bound by this Agreement in its
entirety, and perform all the duties and responsibilities specified herein as
Subcustodian hereunder.
4. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Custodian shall upon
the date specified in the notice of termination of this Agreement and upon the
delivery to it by the Subcustodian of all Securities (other than Securities held
in the Book-Entry System which cannot be delivered to the Fund) and money then
owned by the Fund be deemed to be its own custodian and the Subcustodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement as of that time.
ARTICLE XXI.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by one of the
present Authorized Persons of the Fund under its seal, setting forth the names
and the signatures of the present Authorized Persons. The Fund agrees to furnish
to the Subcustodian a new Certificate in similar form in the event that any such
present Authorized Person ceases to be an Authorized Person or in the event that
other or additional Authorized Persons are elected or appointed. Until such new
Certificate shall be received, the Subcustodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the Authorized Persons as set forth in the last delivered
Certificate.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to (i) the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at 000
00xx Xxxxxx, X.X. Xxxxxxxxxx, XX 00000, or (ii) to the Subcustodian, shall be
sufficiently given if addressed to the Subcustodian and mailed or delivered to
it at its offices at 00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as the Custodian or the Subcustodian may from time to time designate
in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address for the
Fund first above written, or at such other place as the Fund may from time to
time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by all parties with the same formality as this
Agreement and approved by a resolution of the Board of Trustees of the Fund.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Custodian and the Subcustodian, by the Custodian without the written
consent of the Fund and the Subcustodian, authorized or approved by a resolution
of the Fund's Board of Trustees, or by the Subcustodian without the written
consent of the Custodian and the Fund, authorized or approved by a resolution of
the Fund's Board of Trustees.
6. This Agreement shall be construed in accordance with the laws of the
State of New York without given effect to conflict of laws principles thereof.
Each party hereby consents to the nonexclusive jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. A copy of the Declaration of Trust of the Fund is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Board of Trustees of the Fund as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only on the assets and property of the Fund; provided, however, that the
Declaration of Trust of the Fund provides that the assets of a particular Series
of the Fund shall under no circumstances be charged with liabilities
attributable to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a particular Series
of the Fund shall look only to the assets of that particular Series for payment
of such credit, contract or claim.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized and their
respective seals to be hereunder affixed, as of the day and year first above
written.
XXXXX FUNDS
[SEAL] By: /s/ Xxxxxx X. Xxxxx
Attest:
/s/ C. Xxxxx Xxxxxxxx
XXXXX BANK, N.A.,
AS CUSTODIAN
[SEAL] By: /s/ Xxxxx X. Xxxxxx, Xx.
Name: Xxxxx X. Xxxxxx, Xx.
Title: Senior Executive Director
and
Executive Vice President
Attest:
/s/ Xxxx X. XxXxxx
THE BANK OF NEW YORK,
AS SUBCUSTODIAN
[SEAL] By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: Senior Vice President
Attest:
not attested
APPENDIX A
I, C. Xxxxx Xxxxxxxx, Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), do hereby certify that:
The following persons have been duly authorized in conformity with the Fund's
Declaration of Trust and By-Laws to execute any Certificate, instruction, notice
or other instrument on behalf of the Fund, and the signatures set forth opposite
their respective names are their true and correct signature:
Name Position Signature
Xxxx X. Xxxxxx Director, Equity Research /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx Director, Performance and /s/ Xxxx Xxxxxx
Fixed Income Research
X. Xxxxxxx Xxxxxx Assistant Director, Client Services /s/ X. Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx Assistant Director, Operations /s/ Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx Director, Operations and /s/ Xxxxxx X. Xxxxxx
Technology
Xxxxxxxxx X. Xxxx Assistant Director, Equity Trading /s/ Xxxxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx President and COO /s/ Xxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxxx Director, Client Services /s/ Xxxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxx Director of Fixed Income and /s/ Xxxxxx Xxxxxxxx
Chief Fixed Income Strategist
Xxxxxxx Xxxxxxxx Assistant Director, Client Services /s/ Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxx Chairman, CEO and CIO /s/ Xxxxxx X. Xxxxx
J. Xxxxxxxxxxx Xxxxxxx Executive Vice President /s/ J. Xxxxxxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxx President and Treasurer /s/ Xxxxxx X. Xxxxxxxx
Xxxx X. XxXxxxxxx Executive Vice President and /s/ Xxxx X. XxXxxxxxx
Secretary
C. Xxxxx Xxxxxxxx Assistant Secretary /s/ C. Xxxxx Xxxxxxxx
APPENDIX B
SERIES
Xxxxx U.S. Treasury Money Market Fund
Class R Shares
Class Y Shares
Xxxxx Prime Money Market Fund
Class R Shares
Class Y Shares
Xxxxx U.S. Government Securities Fund
Class R Shares
Xxxxx Stock Fund
Class R Shares
Class B Shares
Xxxxx Small Company Stock Fund
Class R Shares
Class B Shares
APPENDIX C
I, Xxxxxxx X. Xxxxxxxx, a Senior Vice President with THE BANK OF NEW
YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
EXHIBIT A
CERTIFICATION
The undersigned, C. Xxxxx Xxxxxxxx, hereby certifies that he or she is
the duly elected and acting Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
August 19, 1998, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Subcustodian pursuant
to a Custody Agreement between and among The Bank of New York, Xxxxx
Bank, N.A. and the Fund dated June 8, 1998, (the "Custody Agreement")
and Xxxxx Bank, as Custodian under the Custody Agreement, each is
authorized and instructed on a continuous and ongoing basis to deposit
in the Book-Entry System, as defined in the Custody Agreement, all
securities eligible for deposit therein, regardless of the Series to
which the same are specifically allocated, and to utilize the
Book-Entry System to the extent possible in connection with its
performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of XXXXX
FUNDS, as of the 20th day of October, 1998.
/s/ C. Xxxxx Xxxxxxxx
[SEAL]
EXHIBIT B
CERTIFICATION
The undersigned, C. Xxxxx Xxxxxxxx, hereby certifies that he or she is
the duly elected and acting Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
August 19, 1998, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Subcustodian pursuant
to a Custody Agreement between and among The Bank of New York, Xxxxx
Bank, N.A. and the Fund dated June 8, 1998, (the "Custody Agreement")
and Xxxxx Bank, as Custodian under the Custody Agreement, each is
authorized and instructed on a continuous and ongoing basis until such
time as it receives a Certificate, as defined in the Custody Agreement,
to the contrary to deposit in the Depository, as defined in the Custody
Agreement, all securities eligible for deposit therein, regardless of
the Series to which the same are specifically allocated, and to utilize
the Depository to the extent possible in connection with its
performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of XXXXX
FUNDS, as of the 20th day of October, 1998.
/s/ C. Xxxxx Xxxxxxxx
[SEAL]
EXHIBIT B-1
CERTIFICATION
The undersigned, C. Xxxxx Xxxxxxxx, hereby certifies that he or she is
the duly elected and acting Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
August 19, 1998, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Subcustodian pursuant
to a Custody Agreement between and among The Bank of New York, Xxxxx
Bank, N.A. and the Fund dated June 8, 1998, (the "Custody Agreement")
and Xxxxx Bank, as Custodian under the Custody Agreement, each is
authorized and instructed on a continuous and ongoing basis until such
time as it receives a Certificate, as defined in the Custody Agreement,
to the contrary to deposit in the Participants Trust Company as
Depository, as defined in the Custody Agreement, all securities
eligible for deposit therein, regardless of the Series to which the
same are specifically allocated, and to utilize the Participants Trust
Company to the extent possible in connection with its performance
thereunder, including, without limitation, in connection with
settlements of purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of XXXXX
FUNDS, as of the 20th day of October, 1998.
/s/ C. Xxxxx Xxxxxxxx
[SEAL]
EXHIBIT C
CERTIFICATION
The undersigned, C. Xxxxx Xxxxxxxx, hereby certifies that he or she is
the duly elected and acting Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
August 19, 1998, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Subcustodian pursuant
to a Custody Agreement between and among The Bank of New York, Xxxxx
Bank, N.A. and the Fund dated June 8, 1998, (the "Custody Agreement")
and Xxxxx Bank, as Custodian under the Custody Agreement, each is
authorized and instructed on a continuous and ongoing basis until such
time as it receives a Certificate, as defined in the Custody Agreement,
to the contrary, to accept, utilize and act with respect to Clearing
Member confirmations for Options and transaction in Options, regardless
of the Series to which the same are specifically allocated, as such
terms are defined in the Custody Agreement, as provided in the Custody
Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of XXXXX
FUNDS, as of the 20th day of October, 1998.
/s/ C. Xxxxx Xxxxxxxx
[SEAL]
EXHIBIT D
The undersigned, C. Xxxxx Xxxxxxxx, hereby certifies that he or she is
the duly elected and acting Assistant Secretary of XXXXX FUNDS, a Massachusetts
business trust (the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting duly held on
August 19, 1998, at which a quorum was at all times present and that such
resolution has not been modified or rescinded and is in full force and effect as
of the date hereof.
RESOLVED, that The Bank of New York, as Subcustodian pursuant
to a Custody Agreement between and among The Bank of New York, Xxxxx
Bank, N.A. and the Fund dated June 8, 1998, (the "Custody Agreement")
and Xxxxx Bank, as Custodian under the Custody Agreement, each is
authorized and instructed on a continuous and ongoing basis to act in
accordance with, and to rely on Instructions (as defined in the Custody
Agreement).
RESOLVED, that the Fund shall establish access codes and grant
use of such access codes only to Authorized Persons of the Fund as
defined in the Custody Agreement, shall establish internal safekeeping
procedures to safeguard and protect the confidentiality and
availability of user and access codes, passwords and authentication
keys, and shall use Instructions only in a manner that does not
contravene the Investment Company Act or the rules and regulations
thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of XXXXX
FUNDS, as of the 20th day of October, 1998.
/s/ C. Xxxxx Xxxxxxxx
[SEAL]
