EXHIBIT 8(a)
CUSTODIAL AGREEMENT BETWEEN REGISTRANT
AND THE BANK OF NEW YORK DATED NOVEMBER 1, 1994
56
CUSTODY AGREEMENT
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Agreement made as of this 1st day of November, 1994,
between Xxxxxxxx Growth Fund, Inc., a corporation organized and
existing under the laws of the state of Maryland, having its
principal office and place of business
at
(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 :
WHEREAS, the Fund represents that pursuant to the Custody
Administration and Agency Agreement between Fund/Plan Services,
Inc. ("Fund/Plan") and the Fund, Fund/Plan (a) has agreed to
perform certain administrative functions which may include the
functions of administrator, transfer agent and accounting
services agent and (b) has been appointed by the Fund to act as
its agent in respect of certain transactions contemplated in
this Agreement; and
WHEREAS, the Fund represents that (a) Fund/Plan has agreed
to act as Fund's agent in respect of certain transactions
contemplated in this Agreement and (b) the Bank is authorized
and directed to rely upon and follow Certificates and
instructions given by Fund/Plan, the Fund's agent, in respect of
transactions contemplated in this Agreement.
NOW, THEREFORE, 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. "Administrator" shall mean Fund/Plan Services, Inc.
and such successors or permitted assigns as may succeed and
perform its duties under the Administration Agreement.
2. "Administration Agreement" shall mean that certain
separate agreement entitled "Custody Administration and Agency
Agreement" dated as of November 1, 1994 between the Fund
and the Fund/Plan Services, Inc.
3. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and fed-
eral agency securities, its successor or successors and its
nominee or nominees.
4. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the
specified underlying Securities.
5. "Certificate" shall mean any notice, instruction, or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian which is actually re-
ceived by the Custodian and signed on behalf of the Fund by any
two Officers, and the term Certificate shall also include
instructions communicated to the Custodian by the Administrator
by Terminal Link.
6. "Clearing Member" shall mean a registered broker-
dealer which is a clearing member under the rules of O.C.C. and
a member of a national securities exchange qualified to act as
a custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing
member.
7. "Collateral Account" shall mean a segregated account
so denominated which is specifically allocated to a Series and
pledged to the Custodian 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.
8. "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.
9. "Depository" shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and
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Exchange Commission, its successor or successors and its nomi-
nee 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 Directors
specifically approving deposits therein by the Custodian.
10. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities including,
without limitation, U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds, domestic bank certificates of deposit, and
Eurodollar certificates of deposit, during a specified month at
an agreed upon price.
11. "Futures 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. "Margin Account" shall mean a segregated account in
the name of a broker, dealer, futures commission merchant, or a
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant, or Clearing Member,
or otherwise, in accordance with an agreement between the Fund,
the 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.
14. "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 anticipa-
tion 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.
15. "O.C.C." shall mean the Options Clearing Corpora-
tion, a clearing agency registered under Section 17A of the
Securities Exchange Act of 1934, its successor or successors,
and its nominee or nominees.
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16. "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, including
officers or employees of the Administrator, whether or not any
such other person is an officer of the Fund, duly authorized by
the Board of Directors 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.
17. "Option" shall mean a Call Option, Covered Call Op-
tion, Stock Index Option and/or a Put Option.
18. "Oral 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.
19. "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 un-
derlying Securities, to sell such Securities to the writer
thereof for the exercise price.
20. "Reverse Repurchase Agreement" shall mean an agree-
ment pursuant to which the Fund sells Securities and agrees to
repurchase such Securities at a described or specified date and
price.
21. "Security" shall be deemed to include, without limi-
tation, Money Market Securities, Call Options, Put Options,
Stock Index Options, Stock Index Futures Contracts, Stock Index
Futures Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, common
stocks and other securities having characteristics similar to
common stocks, preferred stocks, debt obligations issued by
state or municipal governments and by public authorities,
(including, without limitation, general obligation bonds,
revenue bonds, industrial bonds and industrial development
bonds), bonds, debentures, notes, mortgages or other
obligations, and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase, sell or
subscribe for the same, or evidencing or representing any other
rights or interest therein, or any property or assets.
22. "Senior Security Account" shall mean an account
maintained and specifically allocated to a Series under the
terms of this Agreement as a segregated account, by recordation
or otherwise, within the custody account in which certain
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Securities and/or other assets of the Fund specifically al-
located 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.
23. "Series" shall mean the various portfolios, if any,
of the Fund as described from time to time in the current and
effective prospectus for the Fund and listed on Appendix B
hereto as amended from time to time.
24. "Shares" shall mean the shares of beneficial inter-
est of the Fund, each of which is, in the case of a Fund having
Series, allocated to a particular Series.
25. "Stock Index Futures Contract" shall mean a bilat-
eral 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 con-
tract and the price at which the futures contract is originally
struck.
26. "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.
26. "Terminal Link" shall mean an electronic data trans-
mission link between the Administrator on behalf of the Fund and
the Custodian requiring in connection with each use of the
Terminal Link by or on behalf of the Administrator on behalf of
the Fund use of an authorization code provided by the Custodian
and at least two access codes established by the Administrator
on behalf of the Fund.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custo-
dian as custodian of the Securities and moneys at any time owned
by the Fund during the period of this Agreement.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as herein-
after set forth.
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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 respon-
sible 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 Directors
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 Directors 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 Directors, substantially in the
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form of Exhibit C hereto, approving, authorizing and instruct-
ing 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 Administrator 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
Administrator 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 Custo-
dian 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 or cause to be furnished
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to the Custodian appropriate instruments to enable the Custo-
dian 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 here-
under and therein deposited, shall with respect to all Securi-
ties held for the Fund hereunder in accordance with preceding
paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount pay-
able 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 publi-
cations listed in Appendix C annexed hereto, which may be
amended at any time by the Custodian without the prior notifi-
cation or consent of the Fund;
(c) Present for payment and collect the amount pay-
able upon all Securities which mature;
(d) Surrender Securities in temporary form for de-
finitive Securities;
(e) Execute, as custodian, any necessary declara-
tions 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.
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, authoriza-
tions, and any other instruments whereby the authority of the
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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 ex-
change for other Securities or cash issued or paid in con-
nection 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 cor-
poration, 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 any duly authorized plan of liqui-
dation, reorganization, merger, consolidation or recapitaliza-
tion of the Fund; and
(e) Present for payment and collect the amount pay-
able upon Securities not described in preceding paragraph 5(b)
of this Article which may be called as specified in the Cer-
tificate.
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain posses-
sion 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
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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 instruments 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 or cause the
Administrator to deliver to the Custodian (i) with respect to
each purchase of Securities which are not Money Market Se-
curities, 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
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amount payable upon such purchase, provided that the same con-
forms to the total amount payable as set forth in such Cer-
tificate 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 or cause the Administrator to 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 upon receipt 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 or cause the Administrator to 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
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through whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in such Cer-
tificate.
2. Promptly after the sale of any Option purchased by the
Fund pursuant to paragraph 1 hereof, the Fund shall deliver or
cause the Administrator to 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 or cause the Administrator to deliver to the
Custodian a Certificate specifying with respect to such Call
Option: (a) the Series to which such Call Option was spe-
cifically allocated; (b) the name of the issuer and the title
and number of shares subject to the Call Option; (c) the expi-
ration 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 or cause the Administrator to deliver to the
Custodian a Certificate specifying with respect to such Put
Option: (a) the Series to which such Put Option was spe-
cifically allocated; (b) the name of the issuer and the title
and number of shares subject to the Put Option; (c) the expi-
ration 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
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Member through whom such Put Option was exercised. The Custo-
xxxx shall, upon receipt of the amount payable upon the exer-
cise 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 or cause the Administrator to
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 ex-
ercise; 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 deliver or cause the Administrator to 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 deliver or cause the Administrator to
deliver to the Custodian a Certificate instructing the Cus-
todian 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
- 13 -
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
deliver or cause the Administrator to 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 de-
scribed in the preceding paragraph is exercised, the Fund shall
deliver or cause the Administrator to 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
- 14 -
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 deliver or cause the Administrator to 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 deliver or cause the Administrator to
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
- 15 -
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 deliver or cause the
Administrator to 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 pur-
chased 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 Con-
tract, the Fund shall deliver or cause the Administrator to
deliver to the Custodian a Certificate specifying with respect
to such Futures Contract, (or with respect to any number of
- 16 -
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 Fu-
tures 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 or
cause the Administrator to deliver to the Custodian a Certifi-
cate specifying: (a) the Futures Contract and the Series to
which the same relates; (b) with respect to a Stock Index Fu-
tures 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.
- 17 -
4. Whenever the Fund shall enter into a Futures Contract
to offset a Futures Contract held by the Custodian hereunder,
the Fund shall deliver or cause the Administrator to 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 deliver or cause the Admin-
istrator to 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 Op-
tion purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver or cause the Administrator to 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;
- 18 -
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 deliver or cause the Administrator to 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 deliver or cause the Administrator to 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 deliver or cause
the Administrator to deliver to the Custodian a Certificate
specifying: (a) the Series to which such Futures Contract
- 19 -
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 deliver
or cause the Administrator to 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 Op-
tion described in this Article in order to liquidate its posi-
tion as a writer of such Futures Contract Option, the Fund shall
deliver or cause the Administrator to 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)
- 20 -
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 con-
ditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a
closing transaction with respect to, any Futures Contract Op-
tion 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 withdraw-
als from and/or in the case of an exercise such deposits into
the Senior Security Account as may be specified in a Certifi-
cate. The deposits to and/or withdrawals from the Margin Ac-
count, 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 deliver or cause the Administrator to
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.
- 21 -
2. In connection with the closing-out of any short sale,
the Fund shall deliver or cause the Administrator to 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 or cause the Ad-
ministrator to 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.
- 22 -
2. Upon the termination of a Reverse Repurchase Agree-
ment described in preceding paragraph 1 of this Article, the
Fund shall deliver or cause the Administrator to 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 Agree-
ment being terminated and the Series for which same was en-
tered; (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 termi-
nated; 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. Promptly after each loan of portfolio Securities
specifically allocated to a Series held by the Custodian here-
under, the Fund shall deliver or cause the Administrator to
deliver to the Custodian a Certificate specifying with respect
to each such loan: (a) the Series to which the loaned Securi-
ties 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.
- 23 -
2. Promptly after each termination of the loan of Secu-
rities by the Fund, the Fund shall deliver or cause the Admin-
istrator to deliver to the Custodian a Certificate specifying
with respect to each such loan termination and return of Secu-
rities: (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 Cus-
todian (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 the Certificate
fails to specify 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 Administrator.
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 ben-
efit, the account was established as specified in the Margin
Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Mar-
gin Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
- 24 -
4. The Custodian shall have a continuing lien and secu-
rity interest in and to any property at any time held by the
Custodian in any Collateral Account described herein. In ac-
cordance 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 Custo-
xxxx 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 busi-ness
day in which cash and/or Securities are maintained in a
Collateral Account for any Series, the Custodian shall furnish
the Administrator with a statement with respect to such Col-
lateral 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 deliver or cause the Administrator to
deliver 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 or cause the Administrator to 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 deliver or cause the Administrator to
deliver to the Custodian a copy of the resolution of the Board
of Directors 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
- 25 -
the date of the declaration of a dividend or distribution, the
date of payment thereof, the record date as of which share-
holders 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 Cus-
todian 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 or cause the Administrator to 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 Cus-
todian 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
- 26 -
the Custodian hereunder in connection with a redemption of any
Shares, it shall deliver or cause the Administrator to deliver
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 delivered pursuant to the foregoing paragraph 4 of
this Article.
6. Notwithstanding the above provisions regarding the
redemption of any Shares, whenever any Shares are redeemed
pursuant to any check redemption privilege which may from time
to time be offered by the Fund, the 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 over-draft
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 payable on demand
and shall bear interest from the date incurred at a rate per
annum (based on a 360-day year for the actual number of days
involved) equal to 1/2% over
- 27 -
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
- 28 -
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
TERMINAL LINK
1. At no time and under no circumstances shall the Ad-
ministrator on behalf of the Fund be obligated to have or uti-
lize the Terminal Link, and the provisions of this Article shall
apply if, but only if, the Fund in its sole and absolute
discretion directs the Administrator to utilize the Terminal
Link to transmit Certificates to the Custodian.
2. The Terminal Link shall be utilized by the Adminis-
trator on behalf of the Fund only for the purpose of providing
Certificates to the Custodian with respect to transactions
involving Securities or for the transfer of money to be applied
to the payment of dividends, distributions or redemptions of
Fund Shares, and shall be utilized by the Custodian only for the
purpose of providing notices to the Administrator. Such use
shall commence only after the Fund shall have delivered or
caused the Administrator to have delivered to the Custodian a
Certificate substantially in the form of Exhibit D and shall
have established access codes. Each use of the Terminal Link by
the Administrator shall constitute a representation and
warranty that the Terminal Link is being used only for the
purposes permitted hereby, that at least two Officers have each
utilized an access code, that such safekeeping procedures have
been established, and that such use does not contravene the
Investment Company Act of 1940, as amended, or the rules or
regulations thereunder.
3. The Administrator shall obtain and maintain at its own
cost and expense all equipment and services, including, but not
limited to communications services, necessary for it to utilize
the Terminal Link, and the Custodian shall not be responsible
for the reliability or availability of any such equipment or
services.
- 29 -
4. The Fund and the Administrator acknowledges that any
data bases made available as part of, or through the Terminal
Link and any proprietary data, software, processes, information
and documentation (other than any such 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 and the Administrator shall, and shall cause others to
which either discloses the Information, to keep the Information
confidential by using the same care and discretion it uses with
respect to its own confidential property and trade secrets, and
shall neither make nor permit any disclosure without the express
prior written consent of the Custodian.
5. Upon termination of this Agreement for any reason, the
Fund and the Administrator shall return to the Custodian any and
all copies of the Information which are in its respective
possession or under its respective control, or which either
distributed to third parties. The provisions of this Article
shall not affect the copyright status of any of the Information
which may be copyrighted and shall apply to all Information
whether or not copyrighted.
6. The Custodian reserves the right to modify the Ter-
xxxxx Link from time to time without notice to the Fund or the
Administrator except that the Custodian shall give the Admin-
istrator notice not less than 75 days in advance of any modi-
fication which would materially adversely affect the
Administrator's operation, and the Administrator agrees that the
it shall not modify or attempt to modify the Terminal Link
without the Custodian's prior written consent. The Fund ac-
knowledges that any software or procedures provided the Fund as
part of the Terminal Link are the property of the Custodian and,
accordingly, the Administrator agrees that any modifications to
the Terminal Link, whether by the Administrator, or by the
Custodian and whether with or without the Custodian's consent,
shall become the property of the Custodian.
7. Neither the Custodian nor any manufacturers and sup-
pliers it utilizes or the Fund utilizes in connection with the
Terminal Link makes any warranties or representations, express
or implied, in fact or in law, including but not limited to
warranties of merchantability and fitness for a particular
purpose.
8. The Administrator will cause its officers and em-
ployees to treat the authorization codes and the access codes
applicable to Terminal Link with extreme care, and the Fund and
the Administrator irrevocably authorizes the Custodian to act in
accordance with and rely on Certificates received by it through
the Terminal Link. The Fund and the Administrator acknowledge
that it is their respective responsibility to
- 30 -
assure that only Officers use the Terminal Link, and that
Custodian shall not be responsible nor liable for use of the
Terminal Link by persons other than such persons or Officers, or
by only a single Officer, nor for any alteration, omission, or
failure to promptly forward.
9(a). Except as otherwise specifically provided in
Section 9(b) of this Article, the Custodian shall have no li-
ability for any losses, damages, injuries, claims, costs or
expenses arising out of or in connection with any failure,
malfunction or other problem relating to the Terminal Link
except for money damages suffered as the direct result of the
negligence of the Custodian in an amount not exceeding for any
incident $25,000 provided, however, that the Custodian shall
have no liability under this Section 9 if the Administrator
fails to comply with the provisions of Section 11.
9(b). The Custodian's liability for its negligence in
executing or failing to execute in accordance with a Certifi-
cate received through Terminal Link shall be only with respect
to a transfer of funds which is not made in accordance with such
Certificate after such Certificate shall have been duly
acknowledged by the Custodian, and shall be contingent upon the
Administrator complying with the provisions of Section 12 of
this Article, and shall be limited to (i) restoration of the
principal amount mistransferred, if and to the extent that the
Custodian would be required to make such restoration under
applicable law, and (ii) the lesser of (A) the Fund's actual
pecuniary loss incurred by reason of its loss of use of the
mistransferred funds or the funds which were not transferred, as
the case may be, or (B) compensation for the loss of the use of
the mistransferred funds or the funds which were not
transferred, as the case may be, at a rate per annum equal to
the average federal funds rate as computed from the Federal
Reserve Bank of New York's daily determination of the effective
rate for federal funds, for the period during which a Fund has
lost use of such funds. In no event shall the Custodian have
any liability for failing to execute in accordance with a
Certificate a transfer of funds where the Certificate is
received by the Custodian through Terminal Link other than
through the applicable transfer module for the particular in-
structions contained in such Certificate.
10. Without limiting the generality of the foregoing, in
no event shall the Custodian or any manufacturer or supplier of
its computer equipment, software or services relating to the
Terminal Link be responsible for any special, indirect,
incidental or consequential damages which the Fund or the Ad-
ministrator may incur or experience by reason of its use of the
Terminal Link even if the Custodian or any manufacturer or
supplier has been advised of the possibility of such damages,
nor with respect to the use of the Terminal Link shall the
Custodian or any such manufacturer or supplier be liable for
acts of God, or with respect to the following to the extent
- 31 -
beyond such person's reasonable control: machine or computer
breakdown or malfunction, interruption or malfunction of com-
munication facilities, labor difficulties or any other similar
or dissimilar cause.
11. The Fund shall cause the Administrator to notify the
Custodian of any errors, omissions or interruptions in, or delay
or unavailability of, the Terminal Link as promptly as
practicable, and in any event within 24 hours after the earli-
est of (i) discovery thereof, (ii) the Business Day on which
discovery should have occurred through the exercise of reason-
able care and (iii) in the case of any error, the date of ac-
tual 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 Terminal
Link.
12. The Custodian shall verify to the Administrator, by
use of the Terminal Link, receipt of each Certificate the Cus-
todian receives through the Terminal Link, and in the absence of
such verification the Custodian shall not be liable for any
failure to act in accordance with such Certificate and neither
the Fund nor the Administrator may claim that such Certificate
was received by the Custodian. Such verification, which may
occur after the Custodian has acted upon such Certificate, shall
be accomplished on the same day on which such Certificate is
received.
ARTICLE XVI
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. 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"). The
Custodian shall be liable for the acts and
- 32 -
omissions of each Foreign Sub-Custodian constituting negligence
or willful misconduct in the conduct of its responsibilities
under the terms of the Foreign Sub-Custodian Agreement. Upon
receipt of a Certificate, together with a certified resolution
substantially in the form attached as Exhibit E of the Fund's
Board of Directors, 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, 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.
2. 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.
3. 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.
4. 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 Sub-
Custodian under its agreement with the Custodian on behalf of
the Fund.
5. 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 each Series held by Foreign Sub-
Custodians, including but not limited to, an identification of
entities having possession of each Series' Foreign Securities
and other assets, and advices or notifications of any transfers
of Foreign Securities to or from each custodial account
maintained by a Foreign Sub-Custodian for the Custodian on
behalf of the Series.
6. The Custodian shall furnish annually to the Fund,
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
- 33 -
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 safe-keeping
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,
and at least annually obtain and review the annual financial
report published by such Foreign Sub-Custodian to determine that
it meets the financial criteria of an "Eligible Foreign
Custodian" under Rule 17f-5(c)(2)(i) or (ii). The Custodian will
promptly inform the Fund in the event that the Custodian learns
that a Foreign Sub-Custodian no longer satisfies the financial
criteria of an "Eligible Foreign Custodian" under such Rule. The
Custodian agrees that it will use reasonable care in monitoring
compliance by each Foreign 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 breach.
The Custodian also agrees to use reasonable and diligent efforts
to enforce its rights under the relevant Foreign Sub-Custodian
Agreement.
7. The Custodian shall transmit promptly to the Fund
all notices, reports or other written information received
pertaining to the Fund's Foreign Securities, including without
limitation, notices of corporate action, proxies and proxy
solicitation materials.
8. Notwithstanding any provision of this Agreement
to the contrary, settlement and payment for securities received
for the account of any Series and delivery of securities
maintained for the account of such Series may be effected in
accordance with the customary or established securities trading
or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivery of securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer.
ARTICLE XVII
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in
Article XVI neither the Custodian nor its nominee shall be
- 34 -
liable for any loss or damage, including counsel fees, result-
ing 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 or
of its own counsel, at the expense of the Fund, and shall be
fully protected with respect to anything done or omitted by it
in good faith in conformity with such advice or opinion. The
Custodian 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 Securi-
ties, 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
- 35 -
to which portfolio Securities of the Fund are lent pursuant to
Article XIV of this Agreement makes payment to it of any divi-
dends 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 payment.
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, con-
versions, 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 obliga-
tion to take action to effect collection of any amount due to
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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 obliga-
tion 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 institutions 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 obliga-
tion (a) to ascertain whether any Securities at any time de-
livered 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 all out-of-pocket expenses
and such compensation as may be agreed upon from time to time
between the Custodian and the Fund. The Fund represents that the
Administrator has agreed to pay such compensation and expenses
promptly upon receipt of statements therefor, and hereby directs
the Custodian to (i) send all statements for compensation to its
attention care of Fund/Plan at the following address: Fund/Plan
Services, Inc., 0 X. Xxx Xxxxxx, Xxxxxxxxxxxx, XX 00000,
Attention: Xx. Xxxxx Xxxxxxx, Senior Vice President, and (ii)
accept all payments made by Fund/Plan in the Fund's name as if
such payments were made directly by the Fund. The Fund shall pay
to Fund/Plan fees for services (including custodian services
provided by the Custodian) in accordance with the Administration
Agreement. The Custodian's compensation for services rendered
hereunder is set forth in a separate agreement between the
Custodian and Fund/Plan. Should Fund/Plan fail to pay or remit
such compensation to the Custodian, the Custodian will be
entitled to debit the Custody
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Account directly for such compensation. 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 or the
Administrator 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. The Fund
agrees to forward or cause the Administrator 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 by
the Custodian shall in no way affect the validity of the
transactions or enforceability of the transactions hereby au-
thorized 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.
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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 Agree-
ment, including, without limitation, those contained in Article
XVI 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 Certificates or
instructions of the Fund or the Administrator which
responsibility and liability shall continue until final payment
in full has been received by the Custodian.
- 39 -
16. In the event the Custodian is advised by the Fund that
the Fund is no longer utilizing the services of the Ad-
ministrator, then the Custodian shall furnish or give to the
Fund the statements or notices described above as to be fur-
nished or given to the Administrator.
17. The Custodian shall have no duties or responsibili-
ties 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 Cus-
todian. Without limiting the generality of the foregoing, the
Custodian shall have no duties or responsibilities by reason of
any terms or provisions in the Administration Agreement, and if
such Administration Agreement shall cease to be in effect the
Custodian shall have no additional duties hereunder.
ARTICLE XVIII
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 Directors
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
Directors 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.
- 40 -
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 XIX
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 Of-
ficers. 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, and any notice or other instrument
in writing authorized or required to be given to the
Administrator shall be sufficiently given if addressed to the
Administrator at such address as the Administrator 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 Directors of the Fund.
- 41 -
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 Cus-
todian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of the Fund's Board
of Directors.
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. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this Agree-
ment 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.
XXXXXXXX GROWTH FUND, INC.
[SEAL] By: (Signature appears here)
-------------------------
Attest:
/s/ Xxxxxxxx X. Xxxxx
------------------------
THE BANK OF NEW YORK
[SEAL] By: (Signature appears here)
-------------------------
Attest:
(Signature appears here)
------------------------
- 43 -
