Exhibit (j)(1)
XXXXX XXXXX TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND
November 14, 2005
Xxxxx Xxxxx Tax-Managed Premium and Dividend Income Fund hereby adopts and
agrees to become a party to the attached Custodian Agreement as amended and
extended with Investors Bank & Trust Company.
XXXXX XXXXX TAX-MANAGED PREMIUM AND
DIVIDEND INCOME FUND
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
Treasurer, and not Individually
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxx
---------------------------------
Investors Bank & Trust Company
MASTER CUSTODIAN AGREEMENT
between
XXXXX XXXXX GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
1. Definitions............................................................1-2
2. Employment of Custodian and Property to be held by it..................2-3
3. Duties of the Custodian with Respect to Property of the Fund.............3
A. Safekeeping and Holding of Property..................................3
B. Delivery of Securities.............................................3-6
C. Registration of Securities...........................................6
D. Bank Accounts........................................................6
E. Payments for Shares of the Fund....................................6-7
F. Investment and Availability of Federal Funds.........................7
G. Collections........................................................7-8
H. Payment of Fund Moneys.............................................8-9
I. Liability for Payment in Advance of Receipt of
Securities Purchased.................................................9
J. Payments for Repurchases of Redemptions of Shares
of the Fund.......................................................9-10
K. Appointment of Agents by the Custodian..............................10
L. Deposit of Fund Portfolio Securities in Securities Systems.......10-12
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper....................................12-13
X. Xxxxxxxxxx Account..................................................14
O. Ownership Certificates for Tax Purposes.............................14
P. Proxies.............................................................14
Q. Communications Relating to Fund Portfolio Securities................14
R. Exercise of Rights; Tender Offers..................................15
-i-
S. Depository Receipts.................................................15
T. Interest Bearing Call or Time Deposits...........................15-16
U. Options, Futures Contracts and Foreign Currency Transactions.....16-17
V. Actions Permitted Without Express Authority.........................17
W. Advances by the Bank................................................18
4. Duties of Bank with Respect to Books of Account and Calucations
of Net Asset Value......................................................18
5. Records and Miscellaneous Duties.....................................18-19
6. Opinion of Fund's Independent Public Accountants........................19
7. Compensation and Expenses of Bank.......................................19
8. Responsibility of Bank...............................................19-20
9. Persons Having Access to Assets of the Fund.............................20
10. Effective Period, Termination and Amendment; Successor Custodian.....20-21
11. Interpretive and Additional Provisions..................................21
12. Notices.................................................................21
13. Massachusetts Law to Apply..............................................22
14. Adoption of the Agreement by the Fund...................................22
-ii-
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Xxxxx
Xxxxx Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository BUT
ONLY if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system referred
to in Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities BUT ONLY if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to Section 2
hereof for the holding of commercial paper in book-entry form BUT ONLY if the
Custodian has received a certified copy of a vote of the Board approving the
participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or persons
as the Board shall have from time to time authorized to give the particular
class of instructions in question. Electronic instructions for the purchase and
sale of securities which are transmitted by Xxxxx Xxxxx Management to the
Custodian through the Xxxxx Xxxxx equity trading system and the Xxxxx Xxxxx
fixed income trading system shall be deemed to be proper instructions; the Fund
shall cause all such instructions to be confirmed in writing. Different persons
may be authorized to give instructions for different purposes. A certified copy
of a vote of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to the
contrary. Such instructions may be general or specific in terms and, where
appropriate, may be standing instructions. Unless the vote delegating authority
to any person or persons to give a particular class of instructions specifically
requires that the approval of any person, persons or committee shall first have
been obtained before the Custodian may act on instructions of that class, the
Custodian shall be under no obligation to question the right of the person or
persons giving such instructions in so doing. Oral instructions will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt of a
certificate signed by two officers of the Fund as to the authorization by the
President and the Treasurer of the Fund accompanied by a detailed description of
the communication procedures approved by the President and the Treasurer of the
Fund, "proper instructions" may also include communications effected directly
between electromechanical or electronic devices provided that the President and
Treasurer of the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby appoints and employs the Bank as its Custodian and Agent in
accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
-2-
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
A. SAFEKEEPING AND HOLDING OF PROPERTY. The Custodian shall keep safely
all property of the Fund and on behalf of the Fund shall from time to
time receive delivery of Fund property for safekeeping. The Custodian
shall hold, earmark and segregate on its books and records for the
account of the Fund all property of the Fund, including all
securities, participation interests and other assets of the Fund (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred to
herein as a "Securities System", and (4) held by the Custodian or by
any subcustodian referred to in Section 2 hereof and maintained in any
Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES. The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, and
only in the following cases:
1) Upon sale of such securities or participation interests for
the account of the Fund, BUT ONLY against receipt of payment
therefor; if delivery is made in Boston or New York City,
payment therefor shall be made in accordance with generally
accepted clearing house procedures or by use of Federal
-3-
Reserve Wire System procedures; if delivery is made
elsewhere payment therefor shall be in accordance with the
then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by
the parties hereto; if the sale is effected through a
Securities System, delivery and payment therefor shall be
made in accordance with the provisions of Paragraph L
hereof; if the sale of commercial paper is to be effected
through an Approved Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made in accordance
with the provisions of Paragraph M hereof; if the securities
are to be sold outside the United States, delivery may be
made in accordance with procedures agreed to in writing from
time to time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition
of a portfolio security (i) upon the exercise of an option
written by the Fund and (ii) upon the failure by the Fund to
make a successful bid with respect to a portfolio security,
the continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; PROVIDED that, in any such case,
the cash or other consideration is to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name or
nominee name of any subcustodian employed pursuant to
Section 2 hereof; or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in
any such case, the new securities or participation interests
are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance
with the "street delivery" custom; PROVIDED that the
Custodian shall adopt such procedures as the Fund from time
to time shall approve to ensure their prompt return to the
Custodian by the broker in the event the broker elects not
to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the Issuer of such
securities, or pursuant to provisions for conversion of such
securities, or pursuant to any deposit agreement; provided
-4-
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender of
interim receipts or temporary securities for definitive
securities; PROVIDED that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of securities made
by the Fund (such loans to be made pursuant to the terms of
the Fund's current registration statement), BUT ONLY against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund, which may be in the form
of cash or obligations issued by the United States
government, its agencies or instrumentalities; except that
in connection with any securities loans for which collateral
is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of
Treasury, the Custodian will not be held liable or
responsible for the delivery of securities loaned by the
Fund prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets by
the Fund (if then permitted under circumstances described in
the current registration statement of the Fund), provided,
that the securities shall be released only upon payment to
the Custodian of the monies borrowed, except that in cases
where additional collateral is required to secure a
borrowing already made, further securities may be released
for that purpose; upon receipt of proper instructions, the
Custodian may pay any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing the loan;
11) When required for delivery in connection with any redemption
or repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian employed
pursuant to Section 2 hereof) and a broker-dealer registered
under the Securities Exchange Act of 1934 and, if necessary,
the Fund, relating to compliance with the rules of The
Options Clearing Corporation or of any registered national
securities exchange, or of any similar organization or
organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the
Fund;
-5-
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance with the rules
of the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by the
Fund;
14) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a certified
copy of a vote of the Board specifying the securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery
of such securities shall be made.
C. REGISTRATION OF SECURITIES. Securities held by the Custodian (other
than bearer securities) for the account of the Fund shall be
registered in the name of the Fund or in the name of any nominee of
the Fund or of any nominee of the Custodian, or in the name or nominee
name of any agent appointed pursuant to Paragraph K hereof, or in the
name or nominee name of any subcustodian employed pursuant to Section
2 hereof, or in the name or nominee name of The Depository Trust
Company or Participants Trust Company or Approved Clearing Agency or
Federal Book-Entry System or Approved Book-Entry System for Commercial
Paper; provided, that securities are held in an account of the
Custodian or of such agent or of such subcustodian containing only
assets of the Fund or only assets held by the Custodian or such agent
or such subcustodian as a custodian or subcustodian or in a fiduciary
capacity for customers. All certificates for securities accepted by
the Custodian or any such agent or subcustodian on behalf of the Fund
shall be in "street" or other good delivery form or shall be returned
to the selling broker or dealer who shall be advised of the reason
thereof.
D. BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting in pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
the Fund other than cash maintained by the Fund in a bank account
established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the
Fund may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies
as the Custodian may in its discretion deem necessary or desirable;
provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act of
1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved in
writing by two officers of the Fund. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be subject to
withdrawal only by the Custodian in that capacity.
E. PAYMENT FOR SHARES OF THE FUND. The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of
the Fund to enable the Custodian to make certain it promptly receives
the cash or other consideration due to the Fund for such new or
treasury Shares as may be issued or sold from time to time by the
-6-
Fund, in accordance with the governing documents and offering
prospectus and statement of additional information of the Fund. The
Custodian will provide prompt notification to the Fund of any receipt
by it of payments for Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon agreement between
the Fund and the Custodian, the Custodian shall, upon the receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties,
1) invest in such securities and instruments as may be set
forth in such instructions on the same day as received all
federal funds received after a time agreed upon between the
Custodian and the Fund; and
2) make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for
Shares of the Fund which are deposited into the Fund's
account.
G. COLLECTIONS. The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in connection
with such prompt collections and, without limiting the generality of
the foregoing, the Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund,
checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities
System or in an Approved Book-Entry System for Commercial
Paper at the time funds become available to the Custodian;
in the case of securities maintained in The Depository Trust
Company funds shall be deemed available to the Fund not
later than the opening of business on the first business day
after receipt of such funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably practicable
whenever income due on any security is not promptly collected. In any
case in which the Custodian does not receive any due and unpaid income
after it has made demand for the same, it shall immediately so notify
the Fund in writing, enclosing copies of any demand letter, any
-7-
written response thereto, and memoranda of all oral responses thereto
and to telephonic demands, and await instructions from the Fund; the
Custodian shall in no case have any liability for any nonpayment of
such income provided the Custodian meets the standard of care set
forth in Section 8 hereof. The Custodian shall not be obligated to
take legal action for collection unless and until reasonably
indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends,
rights and other items of like nature, and deal with the same pursuant
to proper instructions relative thereto.
H. PAYMENT OF FUND MONEYS. Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases
only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options on
futures contracts purchased for the account of the Fund but
only (a) against the receipt of
(i) such securities registered as provided in Paragraph C
hereof or in proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of
the options, futures contracts, forward contracts or options
on futures contracts
by the Custodian (or by a subcustodian employed pursuant to
Section 2 hereof or by a clearing corporation of a national
securities exchange of which the Custodian is a member or by
any bank, banking institution or trust company doing
business in the United States or abroad which is qualified
under the Investment Company Act of 1940 to act as a
custodian and which has been designated by the Custodian as
its agent for this purpose or by the agent specifically
designated in such instructions as representing the
purchasers of a new issue of privately placed securities);
(b) in the case of a purchase effected through a Securities
System, upon receipt of the securities by the Securities
System in accordance with the conditions set forth in
Paragraph L hereof; (c) in the case of a purchase of
commercial paper effected through an Approved Book-Entry
System for Commercial Paper, upon receipt of the paper by
the Custodian or subcustodian in accordance with the
conditions set forth in Paragraph M hereof; (d) in the case
of repurchase agreements entered into between the Fund and
another bank or a broker-dealer, against receipt by the
Custodian of the securities underlying the repurchase
agreement either in certificate form or through an entry
crediting the Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of Boston with such
securities along with written evidence of the agreement by
-8-
the bank or broker-dealer to repurchase such securities from
the Fund; or (e) with respect to securities purchased
outside of the United States, in accordance with written
procedures agreed to from time to time in writing by the
parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of
the Fund in accordance with the provisions of Paragraph J
hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments
for the account of the Fund: advisory fees, distribution
plan payments, interest, taxes, management compensation and
expenses, accounting, transfer agent and legal fees, and
other operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated
as deferred expenses;
5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a certified
copy of a vote of the Board, specifying the amount of such
payment, setting forth the purpose for which such payment is
to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom such
payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions signed by two officers of the Fund to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received
by the Custodian; EXCEPT that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the Federal
Reserve System, the Custodian may transfer funds to the account of
such bank prior to the receipt of (i) the securities in certificate
form subject to such repurchase agreement or (ii) written evidence
that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of
the Custodian maintained with the Federal Reserve Bank of Boston or
(iii) the safekeeping receipt, PROVIDED that such securities have in
fact been so transferred by book-entry and the written repurchase
agreement is received by the Custodian in due course; AND EXCEPT that
if the securities are to be purchased outside the United States,
payment may be made in accordance with procedures agreed to in writing
from time to time by the parties hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND. From
such funds as may be available for the purpose, but subject to any
applicable votes of the Board and the current redemption and
repurchase procedures of the Fund, the Custodian shall, upon receipt
of written instructions from the Fund or from the Fund's transfer
agent or from the principal underwriter, make funds and/or portfolio
-9-
securities available for payment to holders of Shares who have caused
their Shares to be redeemed or repurchased by the Fund or for the
Fund's account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding Shares
for which certificates have not been issued. Such checking account and
such special checks shall be subject to such rules and regulations as
the Custodian and the Fund may from time to time adopt. The Custodian
or the Fund may suspend or terminate use of such checking account or
such special checks (either generally or for one or more shareholders)
at any time. The Custodian and the Fund shall notify the other
immediately of any such suspension or termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN. The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any
other bank or trust company (provided such bank or trust company is
itself qualified under the Investment Company Act of 1940 to act as a
custodian or is itself an eligible foreign custodian within the
meaning of Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian described
in this Section 3 as the Custodian may from time to time direct;
providED, however, that the appointment of any such agent shall not
relieve the Custodian of any of its responsibilities or liabilities
hereunder, and as between the Fund and the Custodian the Custodian
shall be fully responsible for the acts and omissions of any such
agent. For the purposes of this Agreement, any property of the Fund
held by any such agent shall be deemed to be held by the Custodian
hereunder.
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, and at
all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2 keep securities of the
Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the Custodian
-10-
or such subcustodian in the Securities System which shall not include
any assets of the Custodian or such subcustodian or any other person
other than assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund, and the Custodian
shall be fully and completely responsible for maintaining a
recordkeeping system capable of accurately and currently stating the
Fund's holdings maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice or
advice from the Securities System that such securities have been
transferred to the Account, and (ii) the making of any entry on the
records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for
the account of the Fund only upon (i) receipt of notice or advice from
the Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all notices or advices from the
Securities System of transfers of securities for the account of the
Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written
advice or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the Fund on
the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to the
Securities System's accounting system, system of internal accounting
controls or procedures for safeguarding securities deposited in the
Securities System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding securities
deposited in any Securities System; and the Custodian shall ensure
that any agent appointed pursuant to Paragraph K hereof or any
subcustodian employed pursuant to Section 2 hereof shall promptly send
to the Fund and to the Custodian any report or other communication
relating to such agent's or sub custodian's internal accounting
controls and procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating to the
Fund's participation in each Securities System will at all times
during regular business hours be open to the inspection of the Fund's
authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Fund that the Board
has approved the use of a particular Securities System; the Custodian
shall also obtain appropriate assurance from the officers of the Fund
that the Board has annually reviewed the continued use by the Fund of
each Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be discontinued; at
the request of the Fund, the Custodian will terminate the use of any
such Securities System as promptly as practicable.
-11-
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or subcustodians or of any of its or their employees or from
any failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the Securities
System or any other person; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or damage if
and to the extent that the Fund has not been made whole for any such
loss or damage.
M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER. Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial paper of
the Fund in an Approved Book-Entry System for Commercial Paper,
provided that such paper is issued in book entry form by the Custodian
or subcustodian on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and provided
further that such paper is maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include any
assets of the Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as a fiduciary,
custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of
the Fund which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue of
commercial paper purchased by the Fund which is included in the System
and shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the Fund.
The Custodian shall be fully and completely responsible for
maintaining a recordkeeping system capable of accurately and currently
stating the Fund's holdings of commercial paper maintained in each
such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon contemporaneous
(i) receipt of notice or advice from the issuer that such paper has
been issued, sold and transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such purchase,
payment and transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such commercial
paper which is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that payment for such
paper has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer or
redemption and payment for the account of the Fund. Copies of all
-12-
notices, advices and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund at its
request. The Custodian shall promptly send to the Fund confirmation of
each transfer to or from the account of the Fund in the form of a
written advice or notice of each such transaction, and shall furnish
to the Fund copies of daily transaction sheets reflecting each day's
transactions in the System for the account of the Fund on the next
business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to each
System's accounting system, system of internal accounting controls or
procedures for safeguarding commercial paper deposited in the System;
the Custodian shall promptly send to the Fund any report or other
communication relating to the Custodian's internal accounting controls
and procedures for safeguarding commercial paper deposited in any
Approved Book-Entry System for Commercial Paper; and the Custodian
shall ensure that any agent appointed pursuant to Paragraph K hereof
or any subcustodian employed pursuant to Section 2 hereof shall
promptly send to the Fund and to the Custodian any report or other
communication relating to such agent's or sub custodian's internal
accounting controls and procedures for safeguarding securities
deposited in any Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence
of receipt of a certificate of an officer of the Fund that the Board
has approved the use of a particular Approved Book-Entry System for
Commercial Paper; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has annually
reviewed the continued use by the Fund of each Approved Book-Entry
System for Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for Commercial
Paper is to be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System
for Commercial Paper is maintained by the subcustodian) shall issue
physical commercial paper or promissory notes whenever requested to do
so by the Fund or in the event of an electronic system failure which
impedes issuance, transfer or custody of direct issue commercial paper
by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of any Approved Book-Entry System for
Commercial Paper by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or subcustodians or
of any of its or their employees or from any failure of the Custodian
or any such agent or subcustodian to enforce effectively such rights
as it may have against the System, the issuer of the commercial paper
or any other person; at the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claim against the System, the issuer of the commercial paper or any
other person which the Custodian may have as a consequence of any such
loss or damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
-13-
N. SEGREGATED ACCOUNT. The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and any registered broker-dealer (or any futures commission
merchant), relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any
contract market or commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or other
arrangements in connection with transactions by the Fund, (ii) for
purposes of segregating cash or U.S. Government securities in
connection with options purchased, sold or written by the Fund or
futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper purposes,
BUT ONLY, in the case of clause (iv), upon receipt of, in addition to
proper instructions, a certificate signed by two officers of the Fund,
setting forth the purpose such segregated account and declaring such
purpose to be a proper purpose.
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
P. PROXIES. The Custodian shall, with respect to the securities held by
it hereunder, cause to be promptly delivered to the Fund all forms of
proxies and all notices of meetings and any other notices or
announcements or other written information affecting or relating to
the securities, and upon receipt of proper instructions shall execute
and deliver or cause its nominee to execute and deliver such proxies
or other authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute any proxy
to vote thereon or give any consent or take any other action with
respect thereto (except as otherwise herein provided) unless ordered
to do so by proper instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
shall deliver promptly to the Fund all written information (including,
without limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by
the Fund) received by the Custodian from issuers and other persons
relating to the securities and participation interests being held for
the Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information received by
the Custodian from issuers and other persons relating to the
securities and participation interests whose tender or exchange is
sought and from the party (or his agents) making the tender or
exchange offer.
-14-
R. EXERCISE OF RIGHTS; TENDER OFFERS. In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities and
participation interests held by the Custodian under this Agreement,
the Custodian shall have responsibility for promptly notifying the
Fund of all such offers in accordance with the standard of reasonable
care set forth in Section 8 hereof. For all such offers for which the
Custodian is responsible as provided in this Paragraph R, the Fund
shall have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of proper
instructions, the Custodian shall timely deliver to the issuer or
trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the new securities and cash, if
any, acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon receipt
of proper instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered
securities are to be returned to the Custodian or subcustodian
employed pursuant to Section 2 hereof. Notwithstanding any provision
of this Agreement to the contrary, the Custodian shall take all
necessary action, unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall thereafter promptly notify the Fund in writing of
such action.
S. DEPOSITORY RECEIPTS. The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities
to the depository used by an issuer of American Depository Receipts or
International Depository Receipts (hereinafter collectively referred
to as "ADRs") for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has acknowledged
receipt of instructions to issue with respect to such securities ADRs
in the name of a nominee of the Custodian or in the name or nominee
name of any subcustodian employed pursuant to Section 2 hereof, for
delivery to the Custodian or such subcustodian at such place as the
Custodian or such subcustodian may from time to time designate. The
Custodian shall, upon receipt of proper instructions, surrender ADRs
to the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to
the Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS. The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term and
call deposits with the banking department of such banking institution
(other than the Custodian) and in such amounts as the Fund may
designate. Deposits may be denominated in U.S. Dollars or other
currencies. The Custodian shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and
other appropriate details and shall retain such forms of advice or
-15-
receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the banking institution. Such deposits shall be deemed
portfolio securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the collection
of income from such accounts and the transmission of cash to and from
such accounts.
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS.
1. OPTIONS. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered broker-dealer
and, if necessary, the Fund, relating to compliance with the
rules of the Options Clearing Corporation or of any registered
national securities exchange or similar organization or
organizations, receive and retain confirmations or other
documents, if any, evidencing the purchase or writing of an
option on a security or securities index or other financial
instrument or index by the Fund; deposit and maintain in a
segregated account for each Fund separately, either physically or
by book-entry in a Securities System, securities subject to a
covered call option written by the Fund; and release and/or
transfer such securities or other assets only in accordance with
a notice or other communication evidencing the expiration,
termination or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or options exchange
on which such covered option is traded or such other organization
as may be responsible for handling such options transactions. The
Custodian and the broker-dealer shall be responsible for the
sufficiency of assets held in each Fund's segregated account in
compliance with applicable margin maintenance requirements.
2. FUTURES CONTRACTS. The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other
documents, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the Fund; deposit
and maintain in a segregated account, for the benefit of any
futures commission merchant, assets designated by the Fund as
initial, maintenance or variation "margin" deposits (including
mark-to-market payments) intended to secure the Fund's
performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written by
Fund, in accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any contract
market or commodities exchange or similar organization regarding
such margin deposits or payments; and release and/or transfer
assets in such margin accounts only in accordance with any such
agreements or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of assets held
in the segregated account in compliance with the applicable
margin maintenance and mark-to-market payment requirements.
-16-
3. FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, pursuant
to proper instructions, enter into or cause a subcustodian to
enter into foreign exchange contracts or options to purchase and
sell foreign currencies for spot and future delivery on behalf
and for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such banking or
financial institutions or other currency brokers, as set forth in
proper instructions. Foreign exchange contracts and options shall
be deemed to be portfolio securities of the Fund; and
accordingly, the responsibility of the Custodian therefor shall
be the same as and no greater than the Custodian's responsibility
in respect of other portfolio securities of the Fund. The
Custodian shall be responsible for the transmittal to and receipt
of cash from the currency broker or banking or financial
institution with which the contract or option is made, the
maintenance of proper records with respect to the transaction and
the maintenance of any segregated account required in connection
with the transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or banking or
financial institutions with which the Fund deals or for their
failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of
proper instructions and insofar as funds are made available to
the Custodian for the purpose, the Custodian may (if determined
necessary by the Custodian to consummate a particular transaction
on behalf and for the account of the Fund) make free outgoing
payments of cash in the form of U.S. dollars or foreign currency
before receiving confirmation of a foreign exchange contract or
confirmation that the counter value currency completing the
foreign exchange contact has been delivered or received. The
Custodian shall not be responsible for any costs and interest
charges which may be incurred by the Fund or the Custodian as a
result of the failure or delay of third parties to deliver
foreign exchange; provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and shall be liable
to the Fund in accordance with, the provisions of Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED, that all such
payments shall be accounted for by the Custodian to the
Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Fund except as otherwise directed by the Fund.
-17-
W. ADVANCES BY THE BANK. The Bank may, in its sole discretion, advance
funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this
Agreement for such payments by the Fund. Should such a payment or
payments, with advanced funds, result in an overdraft (due to
insufficiencies of the Fund's account with the Bank, or for any other
reason) this Agreement deems any such overdraft or related
indebtedness a loan made by the Bank to the Fund payable on demand.
Such overdraft shall bear interest at the current rate charged by the
Bank for such secured loans unless the Fund shall provide the Bank
with agreed upon compensating balances. The Fund agrees that the Bank
shall have a continuing lien and security interest to the extent of
any overdraft or indebtedness or the extent required by law, whichever
is greater, in and to any property at any time held by it for the
Fund's benefit or in which the Fund has an interest and which is then
in the Bank's possession or control (or in the possession or control
of any third party acting on the Bank's behalf). The Fund authorizes
the Bank, in the Bank's sole discretion, at any time to charge any
overdraft or indebtedness, together with interest due thereon, against
any balance of account standing to the credit of the Fund on the
Bank's books.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS OF NET
ASSET VALUE
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
5. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
-18-
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
-19-
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. PERSONS HAVING ACCESS TO ASSETS OF THE FUND
(i) No trustee, director, general partner, officer, employee or agent of
the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be available to
duly authorized officers, employees, representatives or agents of the Custodian
or other persons or entities for whose actions the Custodian shall be
responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, that the Fund may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to
-20-
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the Funds
determines that the performance of the Custodian has been unsatisfactory or
adverse to the interests of shareholders of any Fund or Funds or that the terms
of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.
The Board of the Fund shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to such other
address as the Fund may have designated to the Bank, in writing, or to Investors
Bank & Trust Company, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, shall be
deemed to have been properly delivered or given hereunder to the respective
addressees.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
-21-
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. ADOPTION OF THE AGREEMENT BY THE FUND
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement, such adoption to be evidenced by a
letter agreement between the Fund and the Bank reflecting such adoption, which
letter agreement shall be dated and signed by a duly authorized officer of the
Fund and duly authorized officer of the Bank. This Agreement shall be deemed to
be duly executed and delivered by each of the parties in its name and behalf by
its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-22-
