CUSTODY AGREEMENT
Agreement made as of this day of,1996, between CONSECO FUND
GROUP, a Massachusetts business trust organized and existing under the laws
of the Commonwealth of Massachusetts, having its principal office and place
of business at 00000 Xxxxx Xxxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000
(hereinafter called the "Fund"), 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 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth,
the Fund and the Custodian 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. "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.
2. "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.
3. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this Agreement to be
given to the Custodian which is actually received by the Custodian and
signed on behalf of the Fund by any two Officers, and the term Certificate
shall also include Instructions.
4. "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
Custodian to be such a clearing member.
5. "Collateral Account" shall mean a segregated account so
denominated which is specifically allocated to a Series and pledged to the
Custodian as security for, and in consideration of, the Custodian'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 VIII herein.
6. "Covered Call Option" shall mean an exchange traded
option 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 (excluding Futures Contracts) which are
owned by the writer thereof and subject to appropriate restrictions.
7. " C omposite 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.
8. "Currency" shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
9. "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.
10. " F i nancial 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.
11. " F utures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
12. "Futures Contract Option" shall mean an option with
respect to a Futures Contract.
13. "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.
14. "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 Officer or unsigned) and tested
telex.
15. "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,
f u tures commission merchant, or Clearing Member, or otherwise, in
accordance with an agreement between the Fund, the Custodian 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 effecting an
appropriate entry in its books and records.
16. "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.
17. "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.
18. "Officers" shall be deemed to include the President, any
Vice President, the Secretary, the Clerk, the Treasurer, the Controller,
any Assistant Secretary, any Assistant Clerk, any Assistant Treasurer, and
any other person or persons, whether or not any such other person is an
officer 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 Custodian from time
to time.
19. "Option" shall mean a Call Option, Covered Call Option,
Stock Index Option and/or a Put Option.
20. " O ral Instructions" shall mean verbal instructions
actually received by the Custodian from an Officer or from a person
reasonably believed by the Custodian to be an Officer.
21. "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.
22. "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.
23. " S e c u rity" 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
c h a r acteristics 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.
24. " S e n ior 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 in
connection with such transactions as the Fund may from time to time
determine.
25. "Series" shall mean the various portfolios, if any, of
the Fund listed on Appendix B hereto as amended from time to time.
26. "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.
27. "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.
28. "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
1. The Fund hereby constitutes and appoints the Custodian as
custodian of the Securities and moneys at any time owned by the Fund and
allocated to a Series during the period of this Agreement.
2. T h e Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter set
forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
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 moneys 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. The Custodian shall segregate, keep and maintain the assets of
the Series separate and apart. The Custodian will not be responsible for
any Securities and moneys not actually received by it. The Custodian will
be entitled to reverse any credits made on the Fund's behalf where such
credits have been previously made and moneys are not finally collected.
The Fund shall deliver to the Custodian 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 on a continuous and
on-going basis to deposit in the Book-Entry System 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 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 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 on a continuous and ongoing basis until instructed to the
contrary by a Certificate actually received by the Custodian 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 moneys deposited in
either the Book-Entry System or the Depository will be represented in
accounts which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian acts in a
fiduciary or representative capacity and will be specifically allocated on
the Custodian's books to the separate account for the applicable Series.
Prior to the Custodian's 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 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 on a continuous and on-going basis, until instructed to the
contrary by a Certificate actually received by the Custodian, to accept,
utilize and act in accordance with such confirmations as provided in this
Agreement with respect to such Series.
2. The Custodian shall establish and maintain separate
accounts, in the name of each Series, and shall credit to the separate
account for each Series all moneys 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 Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth 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 Custodian attributable to such Series.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund 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 sub-custodian
appointed in accordance with this Agreement during said day. Where
Securities are transferred to the account of the Fund for a Series, the
Custodian 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 Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian shall
furnish the Fund with a detailed statement, on a per Series basis, of the
Securities and moneys held by the Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held by the Custodian
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
Custodian 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 Custodian as the Custodian 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 Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to register in
the name of its registered nominee or in the name of 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 Custodian
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.
5. Except as otherwise provided in this Agreement and unless
otherwise instructed to the contrary by a Certificate, the Custodian 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 4:
(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 Custodian 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
Custodian without the prior notification or consent of the Fund;
(c) Present for payment and collect the amount payable
upon all Securities which mature;
(d) S u r r ender 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;
and
(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 Custodian for such Series hereunder.
(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 Agrement which are actually received by
the Custodian, 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 the manner in which proxies or
consents are to be voted.
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or the
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 Custodian hereunder for the Series specified in such
Certificate may be exercised;
(b) Deliver any Securities held by the Custodian
hereunder for the Series specified in such Certificate in exchange for
other Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of
any corporation, or the exercise of any conversion privilege 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 Custodian
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 or documents 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
a n y 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 5(b) of this Article
which may be called as specified in the Certificate.
7. Notwithstanding any provision elsewhere contained herein,
the Custodian 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 Custodian such a
Certificate no later than the business day preceding the availability of
any such instrument or certificate. Prior to such availability, the
Custodian shall comply with Section 17(f) of the Investment Company Act of
1940, as amended, 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 Custodian 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 Custodian to be in the form customarily used by brokers,
dealers, or future 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
Custodian (or any nominee of the Custodian) 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
i n s t r uments or certificates are available, the Custodian 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 Custodian of such instrument or such certificate, and
deliver any Futures Contract, Option or Futures Contract Option for which
such instruments or such certificates are available only against receipt by
the Custodian of payment therefor. Any such instrument or certificate
delivered to the Custodian shall be held by the Custodian hereunder in
accordance with, and subject to, the provisions of this Agreement.
ARTICLE IV
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 Custodian (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 Custodian shall,
upon receipt of Securities purchased by or for the Fund, pay to the broker
specified in the Certificate out of the moneys 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 Custodian
(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 such 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 Custodian 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 V
OPTIONS
1. Promptly after the purchase of any Option by the Fund,
the Fund shall deliver to the Custodian 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 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 Custodian
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
Custodian (or any duly appointed and registered nominee of the Custodian)
as custodian for the Fund, out of moneys 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
Custodian 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
Custodian 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 Custodian 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 Custodian 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 Custodian
shall, upon receipt of the Securities underlying the Call Option which was
exercised, pay out of the moneys 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
Certificate.
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 Custodian 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 Custodian 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 Custodian 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.
6. Whenever the Fund writes a Covered Call Option, the Fund
shall promptly deliver to the Custodian 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 Custodian 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 Custodian 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 Custodian and
not deposited with the Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and
described in the preceding paragraph of this Article is exercised, the Fund
shall promptly deliver to the Custodian a Certificate instructing the
Custodian to deliver, or to 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 Custodian 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 Custodian 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 is 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 Custodian 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 Custodian
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 Custodian 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 Custodian 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 Custodian in connection with such Put
Option, the Custodian shall pay out of the moneys 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 Certificate against delivery of such Securities, and shall
make the withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the Fund
shall promptly deliver to the Custodian 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
Custodian 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
Custodian 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 Custodian 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 Custodian shall pay out of the moneys 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 designated as a "Closing Purchase
Transaction" in order to liquidate its position as a writer of an Option,
the Fund shall promptly deliver to the Custodian 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 Custodian's payment
of the 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
Custodian 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 Custodian shall
delete such Option from the statements delivered to the Fund pursuant to
paragraph 3 Article III herein, and upon the return and/or cancellation of
any receipts issued by the Custodian, 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 VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures Contract,
the Fund shall deliver to the Custodian 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 Custodian shall make the
deposits, if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall make
payment out of the moneys 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 Custodian 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 Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement is made on
such Futures Contract, the Fund shall deliver to the Custodian 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 Custodian 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 3
of Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Custodian hereunder, the Fund shall
deliver to the Custodian 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 Custodian 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 3 of Article III 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 Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract
Option by the Fund, the Fund shall promptly deliver to the Custodian 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 Custodian shall pay out of the moneys
specifically allocated to such Series, the total amount to be paid upon
such purchase to the broker or futures commissions 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 Custodian a Certificate specifying with respect to
each such sale: (a) Series to which such Futures Contract Option was
specifically allocated; (b) the type of Future 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 of futures commission merchant through whom the
sale was made. The Custodian shall consent to the cancellation of the
Futures Contract Option being closed against payment to the Custodian 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 Custodian 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
Custodian shall make, out of the moneys 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
Custodian 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 Custodian 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 Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically allocated
to such Series the deposits 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 Custodian 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
Custodian 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 through 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 Custodian 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
Custodian 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 Custodian 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 Custodian shall,
upon its receipt of the net total amount payable to the Fund, if any,
specified in the Certificate, make out of the moneys 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 its position as a writer of such Futures
Contract Option, the Fund shall promptly deliver to the Custodian 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 Future
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 Custodian 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 Custodian
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 Custodian shall
(a) delete such Futures Contract Option from the statements delivered to
the Fund pursuant to paragraph 3 of Article III 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
Custodian 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 VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the Fund,
the Fund shall promptly deliver to the Custodian 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 or 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
Custodian 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 Custodian (or any nominee of the Custodian) 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 Custodian 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 Custodian 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
Custodian with respect to the short sale being closed-out, pay out of the
moneys 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 IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase
Agreement with respect to Securities and money held by the Custodian
hereunder, the Fund shall deliver to the Custodian 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
Custodian 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
Custodian 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
Securities Account for such Series. The Custodian 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 X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. P r o mptly after each loan of portfolio Securities
specifically allocated to a Series held by the Custodian hereunder, the
Fund shall deliver or cause to be delivered to the Custodian 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 Custodian 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 Custodian 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 Custodian 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 Custodian drawn on New York
Clearing House funds and may deliver 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
Custodian 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 Custodian (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 Custodian
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 moneys held for the account of the Fund, the total
amount payable upon such return of Securities as set forth in the
Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Senior Security Account as specified in
a Certificate received by the Custodian. 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 Custodian into, or withdrawn from, a Senior
Securities Account, the Custodian shall be under no obligation to make any
such deposit or withdrawal and shall so notify the Fund.
2. The Custodian 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. A m ounts received by the Custodian 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 Custodian shall have a continuing lien and security
interest in and to any property at any time held by the Custodian in any
Collateral Account described herein. In accordance with applicable law the
Custodian may enforce its lien and realize on any such property whenever
the Custodian has made payment or delivery pursuant to any Put Option
guarantee letter or similar document or any receipt issued hereunder by the
Custodian. In the event the Custodian should realize on any such property
net proceeds which are less than the Custodian's obligations under any Put
Option guarantee letter or similar document or any receipt, such deficiency
shall be a debt owed the Custodian by the Fund within the scope of Article
XIV herein.
5. On each business day the Custodian 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
Custodian 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 Custodian 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 Custodian 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 Custodian's
obligation 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.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the
resolution of the Board of Trustees of the Fund, certified by the
Secretary, the Clerk, any Assistant Secretary or any Assistant Clerk,
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 Custodian 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 Custodian shall pay
out of the moneys 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 XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall deliver
to the Custodian 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 Custodian
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
Custodian 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 Custodian 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 Custodian to make payment out of the money held by the Custodian
hereunder in connection with a redemption of any Shares, it shall furnish
to the Custodian 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
Custodian shall make payment to the Transfer Agent out of the moneys 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. N o twithstanding 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 Custodian, 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 moneys held in the separate account of the
Series of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion advance
funds on behalf of any Series which results in an overdraft because the
moneys held by the Custodian 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 of such Series for some other reason, or if the Fund is
for any other reason indebted to the Custodian 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 as
collateral pursuant to a separate agreement and subject to the provisions
of paragraph 2 of this Article), such overdraft or indebtedness shall be
deemed to be a loan made by the Custodian to the Fund for such Series pay-
able 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 Custodian'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 Custodian shall
have a continuing lien and security interest in and to any property
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 Custodian's possession or control or in possession or control
of any third party acting in the Custodian's behalf. The Fund authorizes
the Custodian, 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 Custodian'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 Custodian, 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 Custodian.
2. The Fund will cause to be delivered to the Custodian by
any bank (including, if the borrowing is pursuant to a separate agreement,
the Custodian) from which it borrows money for investment or for temporary
or emergency purposes using Securities held by the Custodian 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 Custodian 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 of
1940 and the Fund's prospectus. The Custodian 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 Custodian
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 Custodian 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 released
from collateral status to be returned directly to the Custodian, and the
Custodian 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 Custodian, the Custodian shall not be under
any obligation to deliver any Securities.
ARTICLE XV
INSTRUCTIONS
1. With respect to any software provided by the Custodian to
a Fund in order for the Fund to transmit Instructions to the Custodian (the
"Software"), the Custodian 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
Custodian in connection with its account(s). The Fund 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 Custodian.
2. The Fund shall obtain and maintain at its own cost and
e x pense all equipment and services, including but not limited to
communications services, necessary for it to utilize the Software and
transmit Instructions to the Custodian. The Custodian 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 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
t h e r e t o), 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
Custodian. 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 Custodian. Upon
termination of this Agreement or the Software license granted hereunder for
any reason, the Fund shall return to the Custodian all copies of the
Information which are in its possession or under its control or which the
Fund distributed to third parties.
4. The Custodian reserves the right to modify the Software
from time to time upon reasonable prior notice and the Fund shall install
new releases of the Software as the Custodian may direct. The Fund agrees
not to modify or attempt to modify the Software without the Custodian's
prior written consent. The Fund acknowledges that any modifications to the
Software, whether by the Fund or the Custodian and whether with or without
the Custodian's consent, shall become the property of the Custodian.
5. The Custodian makes 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 Custodian, express or implied, including but
not limited to any implied warranties or merchantability or fitness for a
particular purpose.
6. Where the method for transmitting Instructions by the
Fund involves an automatic systems acknowledgment by the Custodian of its
receipt of such Instructions, then in the absence of such acknowledgment
the Custodian 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 Custodian, and the Fund shall deliver a Certificate by some other
means.
7. (a) The Fund agrees that where it delivers to the
C u s t o d ian 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 Custodian. The Fund will cause all
persons transmitting Instructions to the Custodian to treat applicable user
and authorization codes, passwords and authentication keys with extreme
care, and irrevocably authorizes the Custodian to act in accordance with
and rely upon Instructions received by it 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 Custodian and that
there may be more secure methods of transmitting instructions to the
Custodian 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.
8. The Fund hereby presents, warrants and covenants to the
Custodian 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 of 1940,
as amended.
9. The Fund shall notify the Custodian 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 Custodian
shall promptly advise the Fund whenever the Custodian learns of any errors,
omissions or interruption in, or delay or unavailability of, the Fund's
ability to send Instructions.
ARTICLE XVI
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
i. The Custodian is authorized and instructed to
employ, as sub-custodian for each Series' Foreign
Securities (as such term is defined in paragraph
(c)(1) of Rule 17f-5 under the Investment Company
Act of 1940, as amended) and other assets, the
foreign banking institutions and foreign securities
depositories and clearing agencies designated on
Schedule I hereto ("Foreign Sub-Custodians") to
carry out their respective responsibilities in
accordance with the terms of the sub-custodian
agreement between each such Foreign Sub-Custodian
and the Custodian, copies of which have been
previously delivered to the Fund and receipt of
which is hereby acknowledged (each such agreement,
a "Foreign Sub-Custodian Agreement"). Upon receipt
o f a Certificate, together with a certified
resolution substantially in the form attached as
Exhibit E of the Fund's Board of Trustees, the Fund
may designate any additional foreign sub-custodian
with which the Custodian has an agreement for such
entity to act as the Custodian's agent, as its sub-
custodian and any such additional foreign sub-
custodian shall be deemed added to Schedule I.
Upon receipt of a Certificate from the Fund, the
Custodian 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.
ii. Each Foreign Sub-Custodian Agreement shall be
substantially in the form previously delivered to
the Fund and will not be amended in a way that
materially adversely affects the Fund without the
Fund's prior written consent.
iii. The Custodian 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
Custodian 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.
iv. Upon request of the Fund, the Custodian 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
S u b - Custodian under its agreement with the
Custodian on behalf of the Fund.
v. The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements
in respect of the securities and other assets of
e a c h Series held by Foreign Sub-Custodians,
including but not limited to, an identification of
entities having possession of each Series' Foreign
S e curities 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
Custodian on behalf of the Series.
vi. The Custodian shall furnish annually to the
F u n d , as mutually agreed upon, information
concerning the Foreign Sub-Custodians employed by
the Custodian. Such information shall be similar
in kind and scope to that furnished to the Fund in
connection with the Fund's initial approval of such
Foreign Sub-Custodians and, in any event, shall
include information pertaining to (i) the Foreign
Custodians' financial strength, general reputation
and standing in the countries in which they are
located and their ability to provide the custodial
services required, and (ii) whether the Foreign
Sub-Custodians would provide a level of safeguards
for safekeeping and custody of securities not
materially different form those prevailing in the
United States. The Custodian shall monitor the
general operating performance of each Foreign Sub-
Custodian. The Custodian agrees that it will use
reasonable care in monitoring compliance by each
F o reign Sub-Custodian with the terms of the
relevant Foreign Sub-Custodian Agreement and that
if it learns of any breach of such Foreign Sub-
Custodian Agreement believed by the Custodian to
have a material adverse effect on the Fund or any
Series it will promptly notify the Fund of such
b r e ach. The Custodian also agrees to use
reasonable and diligent efforts to enforce its
rights under the relevant Foreign Sub-Custodian
Agreement.
vii. The Custodian shall transmit promptly to the
F u n d 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.
viii. 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
a c cordance 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.
ix. 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
Custodian shall be to take appropriate action at
the Fund's expense to recover such loss or damage
from the Foreign Sub-Custodian. It is expressly
understood and agreed that the Custodian's sole
responsibility and liability shall be limited to
a m o unts so recovered from the Foreign Sub-
Custodian.
ARTICLE XVII
FX TRANSACTIONS
1. Whenever the Fund shall enter into an FX Transaction, the
Fund shall promptly deliver to the Custodian a Certificate or Oral
Instructions specifying with respect to 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 delivered; and (f) the name of the person from whom or
through whom such currencies are to be purchased and sold. Unless
otherwise instructed by a Certificate or Oral Instructions, the Custodian
shall deliver, or shall instruct 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 Custodian 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. A n y foreign exchange transaction effected by the
Custodian in connection with this Agreement may be entered with the
Custodian, 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. The Fund may issue a
standing Certificate with respect to foreign exchange transactions but the
Custodian 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 holding 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 Custodian 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 Custodian nor any Foreign
Sub-Custodian shall be liable to the Fund for any loss resulting from any
of the foregoing events.
ARTICLE XVIII
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in Article
XVI, neither the Custodian nor its nominee 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. In no event shall the Custodian be liable to the Fund
or any third party 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 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, at the
Fund's expense, or of its own counsel, which shall be at the expense of
the Fund only if the Fund has approved such expense, and otherwise shall be
at the Custodian's own expense, 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 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 any of its employees or agents.
2. Without limiting the generality of the foregoing, the
Custodian shall be under no obligation to inquire into, and shall not be
liable 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 propriety of the amount paid or
received therefor;
(b) The legality of the sale or redemption of any
Shares, or the propriety 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) The legality of any loan of portfolio Securities,
nor shall the Custodian 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. The Custodian specifically, but
not by way of limitation, shall not 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, the Custodian shall be under no duty or obligation to see that
any broker, dealer or financial institution to which portfolio Securities
of the Fund are lent pursuant to Article X 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 Custodian shall promptly notify the Fund
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, the Custodian shall be under no 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 Custodian 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 Custodian's receipt or non-receipt of any such pay-
ment.
3. The Custodian shall not be liable for, or considered to
be the Custodian of, any money, whether or not represented by any check,
draft, or other instrument for the payment of money, received by it on
behalf of the Fund until the Custodian actually receives and collects such
money directly or by the final crediting of the account representing the
Fund's interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not
be liable for ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository, unless the Custodian shall have actually
received timely notice from the Depository. In no event shall the
Custodian 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 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 shall
make a claim against the Depository on behalf of the Fund, except that the
Custodian shall not 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. The Custodian shall not 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 to the Transfer Agent of the Fund in accordance with this
Agreement.
6. The Custodian shall not 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 Custodian may in addition to the employment of
Foreign Sub-Custodians pursuant to Article XVI appoint one or more banking
i n s t i tutions as Depository or Depositories, as Sub-Custodian or
Sub-Custodians, or as Co-Custodian or Co-Custodians including, but not
limited to, banking institutions located in foreign countries, of
Securities and moneys 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 Custodian, the Fund and the appointed institution.
8. The Custodian shall not 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, are such transactions as may properly be engaged
in by the Fund.
9. The Custodian shall be entitled to receive and the Fund
agrees to pay to the Custodian such out-of-pocket expenses and such
compensation as are specified on Exhibit F hereto, as such Exhibit may be
amended from time to time by the Custodian and the Fund. The Custodian may
charge such compensation and any expenses with respect to a Series incurred
by the Custodian 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 by a Certificate to apportion
any loss, damage, liability or expense among the Series in a specified
manner, the Custodian 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 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. The
expenses for which the Custodian shall be entitled to reimbursement
hereunder shall include, but are not limited to, the expenses of
sub-custodians and foreign branches of the Custodian incurred in settling
outside of New York City transactions involving the purchase and sale of
Securities of the Fund.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by the
Custodian and reasonably believed by the Custodian to be a Certificate.
The Custodian shall be entitled to rely upon any Oral Instructions actually
received by the Custodian hereinabove provided for. The Fund agrees to
forward to the Custodian a Certificate or facsimile thereof confirming such
Oral Instructions in such manner so that such Certificate or facsimile
thereof is received by the Custodian, 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. The Fund
agrees that the fact that such confirming instructions are not received, or
that contrary instructions are received, by the Custodian shall in no way
affect the validity of the transactions or enforceability of the transac-
tions hereby authorized by the Fund. The Fund agrees that the Custodian
shall incur no liability to the Fund in acting upon Oral Instructions given
to the Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Officer.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and reasonably
believed by the Custodian to be given in accordance with the terms and
conditions of any Margin Account Agreement. Without limiting the
generality of the foregoing, the Custodian shall be under no duty to
inquire into, and shall not 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 the Custodian shall be the property of the Fund. Such
books and records shall be prepared and maintained as required by the
Investment Company Act of 1940, as amended, 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 normal business hours. Upon the reasonable request of the
Fund, copies of any such books and records shall be provided by the
Custodian to the Fund or the Fund's authorized representative, and the Fund
shall reimburse the Custodian its expenses of providing such copies. Upon
reasonable request of the Fund, the Custodian shall provide in hard copy or
on micro-film, whichever the Custodian elects, any records included in any
such delivery which are maintained by the Custodian on a computer disc, or
are similarly maintained, and the Fund shall reimburse the Custodian for
its expenses of providing such hard copy or micro-film.
13. The Custodian shall provide the Fund with any report
obtained by the Custodian 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 attorney's fees, howsoever arising or incurred
because of or in connection with this Agreement, including the Custodian's
payment or non-payment of checks pursuant to paragraph 6 of Article XIII as
part of any check redemption privilege program of the Fund, except for any
such liability, claim, loss and demand arising out of the Custodian's own
negligence or willful misconduct.
15. Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Article XVI and XVII the
Custodian may deliver and receive Securities, and receipts with respect to
such Securities, and arrange for payments to be made and received by the
Custodian in accordance with the customs prevailing from time to time among
brokers or dealers in such Securities. When the Custodian 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 Custodian's delivery of Securities pursuant to instruc-
tions of the Fund, which responsibility and liability shall continue until
final payment in full has been received by the Custodian.
16. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set
forth in this Agreement, and no covenant or obligation shall be implied in
this Agreement against the Custodian.
ARTICLE XIX
TERMINATION
1. Either of the parties hereto may terminate this Agreement
by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than ninety (90) days after the
date of 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, the Clerk, any Assistant
Secretary or any Assistant Clerk, 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 $2,000,000 aggregate capital,
surplus and undivided profits. In the event such notice is given by the
Custodian, the Fund shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of the Board of Trustees of the Fund,
certified by the Secretary, the Clerk, any Assistant Secretary or any
Assistant Clerk, 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 bank or trust company having not less
than $2,000,000 aggregate capital, surplus and undivided profits. Upon the
date set forth in such notice this Agreement shall terminate, and the
Custodian shall upon receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the successor custodian all
Securities and moneys then owned by the Fund and held by it as Custodian,
after deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or
the Custodian in accordance with the preceding paragraph, the Fund shall
upon the date specified in the notice of termination of this Agreement and
upon the delivery by the Custodian of all Securities (other than Securities
held in the Book-Entry System which cannot be delivered to the Fund) and
moneys then owned by the Fund be deemed to be its own custodian and the
Custodian shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement, other than the duty with respect to Securities
held in the Book Entry System which cannot be delivered to the Fund to hold
such Securities hereunder in accordance with this Agreement.
ARTICLE XX
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by
two of the present Officers of the Fund under its seal, setting forth the
names and the signatures of the present Officers. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event
that any such present Officer ceases to be an Officer or in the event that
other or additional Officers are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully protected in
acting under the provisions of this Agreement upon Oral Instructions or
signatures of the present Officers 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 the Custodian, shall be
sufficiently given if addressed to the Custodian 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 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 both 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, or by the Custodian without the
written consent of 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 giving effect to conflict of laws
principles thereof. Each party hereby consents to the 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. T h is 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 upon 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 hereunto affixed, as of the day
and year first above written.
CONSECO FUND GROUP
[SEAL] By:_______________________
Attest:
_______________________
THE BANK OF NEW YORK
[SEAL] By:_______________________
Name:
Title:
Attest:
_______________________
APPENDIX A
I , President and I , of
CONSECO FUND GROUP, a Massachusetts business trust (the "Fund"), do hereby
certify that:
The following individuals serve in the following positions with
the Fund and each has been duly elected or appointed by the Board of
Trustees of the Fund to each such position and qualified therefor in
conformity with the Fund's Declaration of Trust and By-Laws, and the
signatures set forth opposite their respective names are their true and
correct signatures:
Name Position Signature
____________________ ___________________ _________________
APPENDIX B
SERIES
Equity Fund
Asset Allocation Fund
Fixed Income Fund
APPENDIX C
I, Xxxxxxxx X. XxXxxxxxxx, a 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, , hereby certifies that
he or she is the duly elected and acting of CONSECO FUND GROUP, 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 , 1996, 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 Custodian
pursuant to a Custody Agreement between The Bank of New York
and the Fund dated as of , 1996, (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing basis to
deposit in the Book-Entry System, as defined in the Custody
A g reement, 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
p o ssible 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
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT B
CERTIFICATION
The undersigned, , hereby certifies that he
or she is the duly elected and acting of CONSECO FUND GROUP, 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 , 1996, 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 Custodian
pursuant to a Custody Agreement between The Bank of New York
and the Fund dated as of , 1996, (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing basis
until such time as it receives a Certificate, as defined in the
C u s tody 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
c o n nection 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
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby certifies that he or
she is the duly elected and acting of CONSECO FUND GROUP, 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 , 1996, 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 Custodian
pursuant to a Custody Agreement between The Bank of New York
and the Fund dated as of , 1996, (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing basis
until such time as it receives a Certificate, as defined in the
C u s tody 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
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies that he or
she is the duly elected and acting of CONSECO FUND GROUP, 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 , 1996, 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 Custodian
pursuant to a Custody Agreement between The Bank of New York
and the Fund dated as of , 1996, (the "Custody Agreement") 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
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT D
The undersigned, , hereby certifies
that he or she is the duly elected and acting of CONSECO FUND GROUP, a
Massachusetts business trust (the "Fund"), further certifies that the
following resolutions were adopted by the Board of Trustees of the Fund at
a meeting duly held on , 1996, at which a quorum was at all times present
and that such resolutions have not been modified or rescinded and are in
full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to
the Custody Agreement between The Bank of New York and the Fund dated as of
, 1996 (the "Custody Agreement") 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 Officers 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 of
1940, as amended, or the rules and regulations thereunder.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT E
The undersigned, , hereby certifies that he
or she is the duly elected and acting of CONSECO FUND GROUP, a
Massachusetts business trust (the "Fund"), further certifies that the
following resolutions were adopted by the Board of Trustees of the Fund at
a meeting duly held on , 1996, at which a quorum was at all times present
and that such resolutions have not been modified or rescinded and are in
full force and effect as of the date hereof.
RESOLVED, that the maintenance of the Fund's assets in each
country listed in Schedule I hereto be, and hereby is, approved by the
Board of Trustees as consistent with the best interests of the Fund and its
shareholders; and further
RESOLVED, that the maintenance of the Fund's assets with the
foreign branches of The Bank of New York (the "Bank") listed in Schedule I
located in the countries specified therein, and with the foreign sub-
custodians and depositories listed in Schedule I located in the countries
specified therein be, and hereby is, approved by the Board of Trustees as
consistent with the best interest of the Fund and its shareholders; and
further
RESOLVED, that the Sub-custodian Agreements presented to this
meeting between the Bank and each of the foreign sub-custodians and
depositories listed in Schedule I providing for the maintenance of the
Fund's assets with the applicable entity, be and hereby are, approved by
the Board of Trustees as consistent with the best interests of the Fund and
its shareholders; and further
RESOLVED, that the appropriate officers of the Fund are hereby
authorized to place assets of the Fund with the aforementioned foreign
branches and foreign sub-custodians and depositories as hereinabove
provided; and further
RESOLVED, that the appropriate officers of the Fund, or any of
them, are authorized to do any and all other acts, in the name of the Fund
and on its behalf, as they, or any of them, may determine to be necessary
or desirable and proper in connection with or in furtherance of the
foregoing resolutions.
IN WITNESS WHEREOF, I hereunto set my hand and the seal of
CONSECO FUND GROUP, as of the day of , 1996.
[SEAL]
EXHIBIT F
Fee Schedule
wdc # : 4787
