CUSTODY AGREEMENT
AGREEMENT, effective March 30, 1998, between THE CHASE MANHATTAN BANK
(the "Bank") and THE LINCOLN NATIONAL GROWTH AND INCOME FUND, INC. ("Customer")
a registered investment company under the Investment Company Act of 1940, as
amended.
CUSTODY ACCOUNT DEFINED. The Customer hereby requests the Bank to open
and to maintain a "Custody Account" in the Customer's name as Entitlement
Holder, in order to hold therein, as the Customer's Securities Intermediary,
upon the following terms and conditions, all Financial Assets which are the
property of Customer. As used herein, the term "Custody Account" shall include
all such custody accounts opened pursuant to this Custody Agreement (the
"Agreement"). From time to time, Customer may instruct the Bank to open
additional Custody Accounts in Customer's name. Unless Customer and Bank shall
otherwise expressly agree in writing, all such Custody Accounts shall be
governed by the terms of this Agreement.
OTHER DEFINITIONS.
"Financial Assets" means Securities. As the context requires a Financial
Asset means either the interest itself or the means by which a person's
claim to it is evidenced, including a certificated or uncertificated
Security, a security certificate, or a Security Entitlement.
"Securities" means stocks, bonds, rights, warrants and other negotiable
and non-negotiable paper issued in certificated form or in uncertificated
form and commonly traded or dealt in on securities exchanges or financial
markets, and other obligations of an issuer, or shares, participations
and interests in an issuer recognized in any area in which it is issued
or dealt in as a medium for investment and any other property as shall be
acceptable to you for the Custody Account.
"Security Entitlement" means the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in Part
5 of Article 8 of the New York Uniform Commercial Code.
"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement
against the Securities Intermediary.
"Securities Intermediary" means the Bank, a Depository, and any other
financial institution which in the ordinary course of its business
maintains Securities accounts for others and acts in that capacity.
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"Instructions" shall have the meaning set forth in Section 2 of this
Agreement.
1. TRANSACTIONS
(A) TRANSACTIONS REQUIRING INSTRUCTIONS
(i) Receipt and Disbursement of Funds
Bank shall open and maintain a separate cash account in the
name of the Customer for each Custody Account ("Custody
Cash Account") to which cash will be credited and debited
in respect of all transactions to the Custody Account
pursuant to this Agreement, and in which cash shall not be
subject to withdrawal by check or draft. Bank shall make
payment from the Custody Cash Account only upon the
Instructions of the Customer.
Bank is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by Bank for the account of the Customer.
(ii) Segregated Account
Upon receipt of Instructions from Customer, Bank will
establish and maintain a segregated Securities account or
accounts on Bank's records for and on behalf of Customer,
in which may be credited cash and/or Financial Assets:
(a) in accordance with the provisions of an agreement
among Customer and a broker/dealer (registered under
the Securities and Exchange Act of 1934 ("Exchange
Act") and a member of the National Association of
Securities Dealers, Inc. ("NASD"), or any futures
commission merchant registered under the Commodity
Exchange Act, relating to compliance with the rules
of the Options Clearing Corporation and of any
registered national securities exchange (or the
Commodity Futures Training Commission or any
registered contract market), or of any similar
organization, regarding escrow or other arrangements
in connection with the transactions by Customer;
(b) for the purpose of segregating cash or Financial
Assets with options purchased or sold by Customer;
and
(c) for other proper corporate purposes as per the
Instruction of an Authorized Officer.
(iii) Receipt and Holding of Securities
Bank shall hold in the Custody Account, and at all times
separate from the assets of Bank, all Financial Assets
(including Securities received by it in
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physical form) for the account of the Customer. All such
Financial Assets held in the Custody Account are to be held
or disposed of by Bank for, and subject at all times to the
Instructions of, the Customer pursuant to the terms of this
Agreement. The Bank shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any
such Financial Assets and investments, except pursuant to
the Instructions of the Customer and except as permitted
by Section 14 hereof.
Unless the Bank receives contrary Instructions from the
Customer, the Bank is authorized to keep certificated
Securities in the Bank's own vaults (and to the extent it
does so, Bank shall maintain those Securities separate from
the securities it maintains for its other customers), or in
book entry form registered in the Bank's name or in the
name of the Bank's nominee or nominees or, where Securities
are eligible for deposit in a Depository (hereinafter
defined), such as The Depository Trust Company, the Federal
Reserve Bank of New York or Participants Trust Company, the
Bank may use any such Depository and permit the
registration of registered Securities in the name of its
nominee or nominees, and the Customer agrees to hold the
Bank and the nominees harmless from any liability as
holders of record. The Customer shall accept the return or
delivery of Securities of the same class and denomination
as those deposited with the Bank by the Customer or
otherwise received by the Bank for the Custody Account, and
the Bank need not retain the particular certificates so
deposited or received.
If any of the Customer's Securities registered in the
Bank's name or the name of the Bank's nominee or held in a
Depository and registered in the name of the Depository's
nominee are called for partial redemption by the issuer of
such Securities, the Bank is authorized to allot the called
portion to the respective beneficial holders of the
Securities in any manner deemed to be fair and equitable by
the Bank in the Bank's sole discretion.
(iv) Transfer, Exchange, Redelivery of Securities
The Bank shall release or deliver any Financial Assets of
the Customer held by it only as authorized by this
Agreement. The Bank agrees to transfer, exchange, or
deliver Financial Assets held by it hereunder (a) for the
sale of such Financial Assets for the account of the
Customer against receipt by the Bank of payment therefor;
(b) when such Financial Assets are called, redeemed or
retired or otherwise become payable; (c) in exchange for or
upon conversion into other Financial Assets alone or other
Financial Assets and cash, whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise; (d) upon conversion of such
Financial Assets, pursuant to their terms, into other
Financial Assets; (e) upon
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exercise of subscription, purchase or other similar rights
represented by such Financial Assets; (f) for the purpose
of exchanging interim receipts or temporary certificated
Securities for definitive certificated Securities; or (g)
for other corporate purposes. As to any deliveries made by
the Bank pursuant to items (a), (b), (c), (d), (e), (f) and
(g), Financial Assets or cash receivable in exchange
therefor shall be deliverable to or for the account of the
Bank and credited by Bank to the Custody Account or the
Custody Cash Account, as appropriate.
Before making any transfer, exchange or delivery, as per
items (a) through (g), the Bank shall receive an
Instruction authorizing such transfer, exchange or
delivery.
(B) TRANSACTIONS WITHOUT INSTRUCTIONS
Unless and until the Bank receives an Officer's Certificate
(defined in Section 2 hereof) to the contrary, the Bank shall:
(a) present for payment all coupons and other income items held by
it for the account of the Customer which call for payment upon
presentation, and credit such payment to the Custody Cash Account;
(b) collect interest and cash dividends received, with notice to
the Customer, and credit such interest and cash dividends to the
Custody Cash Account; (c) deposit to the Custody Account all
stock dividends, rights and similar Securities (except for
fractional shares) issued with respect to any Securities held by
it hereunder; (d) execute as agent on behalf of the Customer all
necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury
Department or under the laws of any State now or hereafter in
effect, inserting the Customer's name on such certificate as the
owner of the Securities covered thereby, to the extent it may
lawfully do so.
2. INSTRUCTIONS.
(A) DEFINITION. As used in this Agreement the term "Instructions"
includes, without limitation, instructions to sell, assign,
transfer, deliver, purchase, hold or receive for the Custody
Account, any and all stocks, bonds and other Financial Assets, or
to transfer funds in the Custody Cash Account.
(B) BY RESOLUTION OR CERTIFICATE. The Bank is authorized to rely
and act upon all written Instructions given or purported to be
given by one or more officers, employees or agents of the Customer
(i) authorized by or in accordance with a corporate resolution of
the Customer delivered to the Bank; or (ii) described as
authorized in a certificate ("Officer's Certificate") delivered to
the Bank by the Customer's Secretary or an Assistant Secretary or
similar officer of the Customer (each such officer, employee or
agent or combination of officers, employees and
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agents authorized pursuant to clause (i) or described pursuant to
clause (ii) of this paragraph (B) is hereinafter referred to as
an "Authorized Officer").
(C) BY FACSIMILE SIGNATURE. The Bank may rely and act upon
Instructions, otherwise valid, which bear or purport to bear the
facsimile signature of any Authorized Officer regardless of by
whom or by what means the actual or purported facsimile signature
or signatures thereon may have been affixed thereto, if such
facsimile signature or signatures resemble the facsimile specimen
or specimens from time to time furnished to the Bank by any of
such Authorized Officers, the Customer's Secretary or an Assistant
Secretary or similar officer of the Customer.
(D) OTHER ACCEPTABLE INSTRUCTIONS. The Bank may rely and act upon
Instructions received by telex, facsimile transmission, bank wire
or other teleprocess, electronic or electro-magnetic medium or
electronic instruction or trade information system acceptable to
the Bank, which Instructions the Bank believes in good faith to
have been given by an Authorized Officer or which are transmitted
with proper testing or authentication pursuant to terms and
conditions which the Bank may specify. The Bank may also rely and
act upon Instructions transmitted electronically through the
Bank's TITAN Data Entry System or any similar electronic
instruction system acceptable to the Bank.
Subject to the next following paragraph with respect to the
transfer of cash from the Custody Cash Account, the Bank may rely
and act upon any Instructions delivered to the Bank by telephone,
and Instructions delivered by telephone shall be promptly
thereafter confirmed in writing by an Authorized Officer; however,
the Bank shall incur no liability for the Customer's failure to
send such confirmation in writing, for the failure of any such
written confirmation to conform to the telephone Instructions
which the Bank received, or for the failure of any such written
confirmation to be signed or properly signed.
With respect to Instructions by telephone from an Authorized
Officer to transfer cash from the Custody Cash Account, PRIOR TO
EXECUTING EACH SUCH INSTRUCTION the Bank shall obtain oral
confirmation for the transfer by calling back any one of the
individuals on a list of persons authorized to confirm those oral
funds transfer Instructions (which individual shall not be the
initiator of that Instruction), and the Bank shall NOT transfer
the cash until it has received that oral confirmation. Written
confirmation shall thereafter promptly be given by the Customer;
however, the Bank shall incur no liability for the Customer's
failure to send such confirmation in writing, for the failure of
any such written confirmation to conform to the telephone
Instructions which the Bank received, or for the failure of any
such written confirmation to be signed or properly signed.
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(E) ADDITIONAL TERMS RELATING TO INSTRUCTIONS. The Bank shall incur
no liability to the Customer or otherwise when the Bank acts or
refrains from acting, as the case may be, in accordance with
Instructions on which the Bank is authorized to rely pursuant to
the provisions of this Agreement. In addition, the Bank shall
incur no liability for refraining from acting upon any
Instructions which for any reason the Bank, in good faith, is
unable to verify to the Bank's own satisfaction.
Unless otherwise expressly provided, all authorizations and
Instructions shall continue in full force and effect until
canceled or superseded by subsequent authorizations or
Instructions received by the Bank's account administrator with
reasonable opportunity to act thereon. The Bank's authorization
to rely and act upon Instructions pursuant to this paragraph shall
be in addition to, and shall not limit, any other authorization
which the Customer may give the Bank regarding the Customer's
accounts with the Bank.
The Customer agrees that, if the Bank requires test arrangements,
authentication methods or procedures or other security devices to
be used with respect to Instructions which the Customer may give
hereunder, thereafter Instructions given by the Customer shall be
given and processed in accordance with terms and conditions for
the use of such arrangements, methods or procedures or devices as
the Bank may put into effect and modify from time to time. The
Customer shall safeguard any testkeys, identification codes or
other security devices which the Bank makes available to the
Customer and Customer agrees that it shall be responsible for any
loss, liability or damage incurred by the Bank or by itself as a
result of the Bank's acting in accordance with Instructions from
any unauthorized person using the proper security device, unless
that unauthorized use is the result of the Bank's negligence or
willful misconduct. Either party may electronically record any
Instructions given by telephone, and any other telephone
discussions with respect to the Custody Account or transactions
pursuant to this Agreement.
Except as may be provided otherwise herein, the Bank is authorized
to execute the Customer's Instructions and take other actions
pursuant to this Agreement in accordance with the Bank's customary
processing practices for customers similar to the Customer and, in
accordance with such practices, the Bank may retain agents,
including subsidiaries or affiliates of the Bank, to perform
certain of such functions.
In acting upon Instructions to deliver Securities against payment,
the Bank is authorized, in accordance with customary securities
processing practices, to deliver such Securities to the purchaser
thereof or dealer therefor (including to an agent for any such
purchaser or dealer) against a receipt, with the expectation of
collecting payment from the purchaser, dealer or agent to whom the
Securities were so delivered before the close of business on the
same day.
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3. STATEMENTS
The Bank shall notify the Customer of each Financial Asset transaction
effected for the Custody Account and of income on and redemptions of the
Financial Assets in the Custody Account, as well as furnish the Customer
a listing of such Financial Assets, at such times upon which the Bank and
the Customer mutually agree. Periodic statements shall be rendered to
the Customer as the Customer may reasonably require, but not less
frequently than monthly.
Unless Customer shall send to Bank a written exception or objection to
any statement of account within 60 days of Customer's receipt of such
statement from Bank, Customer shall be deemed to have approved such
statement, except for items which the Bank later discovers and corrects,
and except for items which Customer discovers after the 60-day period and
which Customer could not reasonably have been expected to discover within
the 60-day period. In any instance in which any statement shall be
deemed to have been approved by Customer, or where Customer has otherwise
approved such statement, Bank shall, to the extent permitted by law, be
released, relieved and discharged with respect to all matters set forth
in such statement or reasonably implied therefrom.
4. ACCESS TO RECORDS
Books and records of the Bank relating to the Custody Account and the
Custody Cash Account shall be open to inspection and audit at all
reasonable times during normal business hours upon request of, and
reasonable advance notice by, Customer's independent public accountants;
directors, officers, employees or agents of the Customer designated to
the Bank; and legally authorized regulatory officials (upon proof to the
Bank of such official status) who are then in the process of reviewing
the Customer's financial affairs.
5. CORPORATE ACTIONS
Promptly after sufficient copies are received by the Bank for forwarding
to customers, the Bank shall send to Customer, or to Customer's designee,
such proxies (signed in blank, if issued in the Bank's name or the name
of the Bank's nominee or a nominee of a Depository) and communications
with respect to the Financial Assets in the Custody Account which call
for voting or which relate to legal proceedings. In addition, the Bank
shall follow coupon payments, redemptions, exchanges or similar matters
with respect to the Financial Assets in the Custody Account and promptly
advise the Customer of rights issued, tender offers or any other
discretionary rights with respect to such Financial Assets, in each case,
of which the Bank receives notice at its Corporate Action Department from
the issuer or from the Depository in which such Financial Assets are held
for the account of the Bank, or from
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notice published in publications and reported in reporting services
routinely used by the Bank for this purpose.
6. CUSTODIAN RESPONSIBILITY
The Bank shall be obligated to indemnify the Customer for the loss of
Financial Assets credited to the Custody Account resulting from (i) the
negligence or willful misconduct of the Bank or the Bank's officers,
employees or agents retained by the Bank to hold such Financial Assets;
or (ii) burglary, robbery, hold-up, theft or mysterious disappearance,
including loss by damage or destruction. In the event of a loss of
Financial Assets held in the Custody Account for which the Bank is
required to indemnify the Customer pursuant to the immediately preceding
sentence, at the Bank's option but subject to mutual agreement of the
parties, the Bank shall promptly either: a) replace such Financial Assets
by, among other means, posting appropriate security or bond with the
issuer(s) of such Financial Assets and obtaining their reissue; or 2)
replace (i) the value thereof determined based upon the market value of
the Financial Assets which are the subject of such loss as of the date of
the discovery of such loss, and (ii) the value of any loss of rights or
privileges resulting from the loss of such Financial Assets. The
foregoing indemnity shall be the Bank's exclusive liability to the
Customer for the Bank's loss of Financial Assets from the Custody
Account.
In respect of all the Bank's other duties and obligations pursuant to the
terms of this Agreement, the Bank shall be liable to the Customer only to
the extent of the Customer's general damages suffered or incurred as a
result of any act, omission, or failure to act of the Bank or the Bank's
officers, employees or agents which constitutes negligence or willful
misconduct. General damages shall mean only those damages as directly
and necessarily result from such act or omission without reference to any
special conditions or circumstances of the Customer or of any
transaction, whether or not the Bank has been advised of any such special
conditions or circumstances. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Bank be liable to the Customer
under this Agreement for special, indirect or consequential loss or
damage of any kind whatsoever, whether or not the Bank is advised as to
the possibility of such loss or damage and regardless of the form of
action through which any such loss or damage may be claimed.
With respect to Depositories, the Customer agrees to be bound by the
Depository rules and procedures applicable to the Bank as a participant
in respect of any securities held by the Bank in the Bank's account with
such Depository. "Depository" shall mean a "securities depository" as
defined in Rule 17f-4 of the Investment Company Act of 1940.
All collection and receipt of funds or Financial Assets and all payment
and delivery of funds or Financial Assets under this Agreement shall be
made by the Bank as the Customer's agent, at the Customer's risk with
respect to the Customer's actions or omissions and those of persons other
than the Bank (except for a Depository), including, without limitation,
the risk associated with the securities processing practice of delivering
securities against a
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receipt and the risk that the counterparty in any transaction into which
the Customer enters will not transfer funds or Financial Assets or
otherwise perform in accordance with the Customer's expectation of its
obligations thereunder.
In no event shall the Bank be responsible or liable for any loss due to
forces beyond the Bank's control, including, but not limited to, acts of
God, flood, nuclear fusion, fission or radiation, war (declared or
undeclared), terrorism, insurrection, revolution, riot, strikes or work
stoppages for any reason, embargo, closure or disruption of any market,
government action, including any laws, ordinances, regulations or the
like which restrict or prohibit the providing of the services
contemplated by this Agreement. In the event that the Bank is unable
substantially to perform for any of the reasons described in the
immediately preceding sentence, the Bank shall so notify the Customer as
soon as reasonably practicable.
The Bank shall be responsible for only those duties expressly stated in
this Agreement or expressly contained in Instructions to perform the
services described herein given to the Bank pursuant to the provisions of
this Agreement and accepted by the Bank. Without limiting the foregoing,
the Bank shall have no duty or responsibility:
(A) to supervise the investment of, or make recommendations with
respect to the purchase, retention or sale of, Financial Assets
relating to the Custody Account, or to maintain any insurance on
the Financial Assets in the Custody Account for the Customer's
benefit;
(B) with regard to any Financial Asset in the Custody Account as to
which a default in the payment of principal or interest has
occurred: (i) to give notice of default or make demand for payment
to the issuer or (ii) to take any other action with respect to
such default except, in each instance, where the Bank has been
requested by the Customer and the Bank has agreed in writing to do
so;
(C) for any act or omission, or for the solvency or insolvency, or
notice to the Customer of the solvency or insolvency, of any
broker or agent which is selected by the Customer or any third
party to effect any transaction for the Custody Account or to
perform any service under this Agreement;
(D) to evaluate, or report to the Customer regarding, the financial
condition of any person, firm or corporation to which the Bank
delivers Financial Assets or funds pursuant to this Agreement;
(E) for any loss occasioned by delay in the actual receipt of notice
by the Bank of any payment, redemption or other transaction in
respect to which the Bank is authorized to take some action
pursuant to this Agreement, (unless the delay was caused by the
negligence or intentional misconduct of Bank); or
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(F) for any errors or omissions made by any third party securities
pricing service used by the Bank to value Securities credited to
the Custody Account as part of any service subscribed to by the
Customer from the Bank.
7. SETTLEMENTS
The Customer agrees with the Bank that all credits of Financial Assets
and funds by the Bank to the Custody Account and the Custody Cash
Account, respectively, on the settlement or payable date shall be
provisional when made and the Bank shall be entitled to reverse any such
credits subject to actual receipt or collection of immediately available
funds.
The Customer shall have sufficient immediately available funds each day
in the Custody Cash Account to pay for the settlement of all Financial
Assets delivered to the Bank against payment and credited to the Custody
Account. Should the Customer fail to have sufficient immediately
available funds in the Custody Cash Account to settle these deliveries of
Financial Assets pursuant to the preceding sentence, this shall
constitute a "Deficit." In the event of a Deficit the Bank, in its sole
discretion, may elect (i) to reject the settlement of any or all of the
Financial Assets delivered to the Bank that day to the Custody Account;
(ii) to settle the deliveries on the Customer's behalf and debit the
Custody Cash Account (A) for the amount of such Deficit, and (B) for the
amount of the funding or other cost or expense incurred or sustained by
the Bank for the Customer's failure to have sufficient immediately
available funds in the Custody Cash Account by the applicable settlement
deadline for Customer; or (iii) to reverse the posting of the Financial
Assets credited to the Custody Account.
Bank shall have the right to reverse any erroneous or provisional credit
entries to the Custody Cash Account retroactively to the date upon which
the correct entry, or no entry, should have been made.
The foregoing rights are in addition to and not in limitation of any
other rights or remedies available to the Bank under this Agreement or
otherwise. Any advances made by the Bank to the Customer in connection
with the purchase, sale, redemption, transfer or other designation of
Financial Assets or in connection with disbursements of funds to any
party, which create or result in an overdraft in the Custody Cash Account
shall be deemed a loan by the Bank to the Customer, payable on demand,
and bear interest on the amount of the loan each day that the loan
remains unpaid at the Bank's prime rate in effect as announced by the
Bank from time to time.
No prior action or course of dealing on the Bank's part with respect to
the settlement of securities transactions on the Customer's behalf shall
be used by or give rise to any claim or action by the Customer against
the Bank for the Bank's refusal to pay or settle for a securities
transaction the Customer has not timely funded as required herein.
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8. DEPOSITORIES
The parties agree that, as of the date of this Agreement, the
Depositories the use of which the Customer has consented are Federal
Reserve/Treasury Book Entry System (the "System"), Participant's Trust
Company ("PTC"), and The Depository Trust Company ("DTC"). Other
Depositories may be used under this Agreement if both parties consent in
writing to the use thereof.
If and to the extent that the Depositories permit the withdrawal of a
Financial Asset in certificated form and Customer requires a certificate
for making a loan or otherwise, Custodian shall take all necessary and
appropriate action to obtain such certificate upon receipt of an
Officer's Certificate requesting the same.
9. RESPONSIBLE AS PRINCIPAL
The Customer agrees that the Customer shall be responsible to the Bank as
a principal for all of the Customer's obligations to the Bank arising
under or in connection with this Agreement, notwithstanding that the
Customer may be acting on behalf of other persons, and the Customer
warrants the Customer's authority to deposit in the Custody Account and
Custody Cash Account, respectively, any Financial Assets and funds which
the Bank receives therefor and to give Instructions relative thereto. The
Customer further agrees that the Bank shall not be subject to, nor shall
the Bank's rights and obligations with respect to this Agreement and the
Custody Account or the Custody Cash Account be affected by, any agreement
between the Customer and any such person.
10. CREDITING AND DEBITING PROCEDURES
With respect to all transactions for the Custody Account and the Custody
Cash Account, including, without limitation, dividend and interest
payments and sales and redemptions of Financial Assets, availability of
funds credited to the Custody Account and Custody Cash Account shall be
based on the type of funds used in the trade settlement or payment,
including, but not limited to, same day availability for federal or same
day funds and next business day availability for clearing house or next
day funds. Furthermore, with respect to all purchases and sales of
Financial Assets for the Custody Account, the proceeds from the sale of
Financial Assets shall be credited to the Custody Cash Account on the
date proceeds are received by the Bank and the cost of Financial Assets
purchased shall be debited to the Custody Cash Account on the date
Financial Assets are received by the Bank, unless the Customer requests
the Bank's contractual settlement service for the Custody Account in
which case the following provisions shall apply with respect to the
delivery and receipt of Financial Assets for the Custody Account for
those Financial Assets and transactions as to which the Bank customarily
offers this service:
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(A) When the Customer instructs the Bank to deliver or receive
Financial Assets, on the contractual settlement date the Bank
shall credit the Custody Cash Account with the expected proceeds
of the transaction and debit the Custody Account for the Financial
Assets which the Customer has instructed the Bank to deliver, in
the case of deliveries, and debit the Custody Cash Account for the
cost of the Financial Assets which the Customer has instructed the
Bank to receive and credit the Custody Account with such Financial
Assets, in the case of receives. These credits and debits are
provisional accounting entries which the Bank shall reverse on the
Customer's Instructions and which the Bank may reverse, even in
the absence of Instructions from Customer, if the transaction with
respect to which they were made fails to settle within a
reasonable period, determined by the Bank in the Bank's
discretion, after the contractual settlement date, except that if
the Bank delivers Financial Assets which are returned by the
recipient thereof, the Bank may reverse such credits and debits at
any time. The Bank has no obligation to use this crediting and
debiting procedure with respect to a delivery of Financial Assets
if the Customer does not have actually in the Customer's account
sufficient Financial Assets to make the delivery.
(B) As with other transactions processed by the Bank, the Bank's
responsibility with respect to transactions for which the Bank
uses this crediting and debiting procedure shall be governed by
the provisions of this Custody Agreement, including the section
headed "Custodian Responsibility". The Customer agrees that the
Bank's using this procedure is not an assurance by the Bank that
the transaction will actually settle on the contractual settlement
date and does not impose any additional responsibility on the Bank
with respect to the transaction. Without limiting the Bank's
right to reverse credits and debits described above, the account
statements which the Bank furnishes to the Customer shall reflect
transactions as to which the Bank uses this procedure as if they
had actually settled on the contractual settlement date, unless
prior to the date to which the statement relates, the Bank has
reversed such credits and debits.
(C) The Customer agrees that the Bank may terminate this contractual
settlement service to the Customer at any time and for any reason.
With respect to Financial Assets or transactions as to which the
Bank does not customarily offer this service, the Bank shall (i)
in the case of deliveries of Financial Assets, credit the proceeds
of the transaction to the Custody Cash Account on the date they
are received by the Bank and debit the Financial Assets from the
Custody Account on the date they are delivered by the Bank, and
(ii) in the case of Financial Assets received, debit the Custody
Cash Account for the cost of such Financial Assets and credit the
Custody Account with such Financial Assets on the date the
Financial Assets are received by the Bank.
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11. TAXES
Unless the Customer has already done so, the Customer shall deliver
promptly to the Bank with respect to each Custody Account established
under this Agreement, two duly completed and executed copies of United
States Internal Revenue Service Form W-9, certifying that the Customer is
entitled to receive United States source payments under or in connection
with this Agreement without deduction as withholding or at a reduced rate
of withholding for United States federal income taxes. The Customer
agrees to provide duly executed and completed updates of such form (or
successor applicable forms), on or before the date that such form expires
or becomes obsolete or after the occurrence of an event requiring a
change in the most recent form previously delivered by the Customer to
the Bank.
Upon receipt of Instructions the Bank is authorized to deduct from the
cash received or credited to the Custody Cash Account any taxes or levies
required by any revenue or governmental authority for whatever reason in
respect of Custody Account.
The Customer further agrees to pay, indemnify, and hold the Bank harmless
from and against any and all liabilities, penalties, interest or
additions to tax with respect to, or resulting from, any delay in, or
failure by, the Bank (i) to pay, withhold or report any federal, state or
foreign taxes imposed on, or in respect of, the property held in the
Custody Account(s), or this Agreement, or (ii) to report interest,
dividend or other income paid or credited to the Custody Cash Account,
whether such failure or delay by the Bank to pay, withhold or report tax
or income is a result of (x) the Customer's failure to comply with the
terms of this section, or (y) the Bank's own acts or omissions; provided,
however, that the Customer shall not be liable to the Bank for penalties
or additions to tax as a result of Bank's failure to pay or withhold tax
or to report to Customer interest, dividend or other income paid or
credited to the Custody Cash Account solely as a result of Bank's
negligent acts or omissions.
12. FEES
The Customer agrees to pay the Bank quarterly in arrears such
compensation for the Bank's services pursuant to this Agreement as may
mutually be agreed upon in writing. The current Compensation Schedule is
reflected in Schedule A of this Agreement.
The Customer shall pay the Bank or reimburse the Bank from time to time
for all necessary and proper disbursements and expenses made or incurred
by the Bank in the performance of this agreement.
13. INDEMNIFICATION
(A) Customer agrees to indemnify and hold Bank and its directors,
officers, agents and employees (collectively the "Indemnitees")
harmless from and against any and all claims, liabilities, losses,
damages, fines, penalties, and expenses, including out-of-pocket
and incidental expenses and reasonable legal fees ("Losses") which
may be imposed on, incurred by, or asserted against, the
Indemnitees or any of them for
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following any Instructions or other directions upon which Bank is
authorized to rely pursuant to the terms of this Agreement.
(B) In addition to and not in limitation of paragraph (a) immediately
above, Customer also agrees to indemnify and hold the Indemnitees
and each of them harmless from and against any and all Losses that
may be imposed on, incurred by, or asserted against, the
indemnitees or any of them in connection with or arising out of
Bank's performance under this Agreement, provided the Indemnitees
have not acted with negligence or engaged in willful misconduct.
(C) (i) In the event that an Indemnitee wishes to assert a claim
for indemnification under paragraph (A) or (B) above, within a
reasonable time after receipt of notice or the commencement of an
action or other claim against the Indemnitee, the Indemnitee shall
deliver written notice to the Customer and provide a copy of the
action or claim. The Indemnitee shall cooperate with the Customer
with respect to the Customer's investigation of the claim. The
Customer may assume the defense of the action upon notice to the
Indemnitee, with legal counsel reasonably acceptable to the
Indemnitee; provided, if the Customer is a party to the action the
Indemnitee may retain the defense of such action if the Indemnitee
is advised by counsel that there are legal defenses available to
the Indemnitee which are different from or in addition to those
available to the Customer.
(ii) If the customer assumes the defense of the action pursuant
to the foregoing paragraph (i), the following additional
provisions shall apply: (1) the Customer shall provide the
Indemnitee with copies of all documents received by it or by its
counsel with respect to the indemnified matter promptly upon
receipt thereof and with copies of all documents proposed to be
delivered by it or by its counsel with respect to the indemnified
matter, and shall use its reasonable best efforts to provide such
documents sufficiently in advance of any deadline for delivery of
such documents to allow the Indemnitee to review and comment
thereon prior to such deadline and prior to actual delivery; (2)
the Customer shall consult with the Indemnitee in good faith as to
the conduct of the defense and shall give due regard to any
comments or suggestions made by the Indemnitee, but the Customer
shall not settle such action without the written consent of the
Indemnitee, which consent shall not be unreasonably withheld; and
(3) in the event the Indemnitee in good faith disagrees with the
defense of the action, the Indemnitee may assume such defense at
its own expense, but the Customer shall not otherwise be released
from its obligation to indemnify the Indemnitee with respect to
such action.
(D) It is expressly understood and agreed that Losses claimable by the
Indemnitees against the Customer under the indemnities in
paragraphs (A) and (B) of this section 13 shall not include legal
fees incurred by the Indemnitees to defend themselves
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against a claim or action by the Customer that the Indemnitees
failed to properly perform under the terms of this Agreement.
14. SECURITY INTEREST
To the extent Bank has advanced funds on Customer's behalf in connection
with the settlement of purchases and sales of Securities for the Custody
Account, Bank shall have a security interest in the Securities which are
the subject of such purchases and sales until Customer shall have repaid
the amount of such advance to Bank, and Bank's security interest in such
Securities shall be released upon Customer's repayment of such advance to
Bank.
15. ASSIGNMENT
This Agreement may not be assigned by either party without the written
consent of the other party, which consent shall not be withheld
unreasonably.
16. AMENDMENT
This Agreement may be amended at any time upon mutual written agreement
of the parties. The amendment will state the date upon which it becomes
effective.
Notwithstanding the foregoing, the Compensation Schedule reflected in
Exhibit A to this Agreement may be amended by having both parties sign
and date a new Schedule, without executing a formal amendment. Each such
amended Schedule shall become a part of this Agreement as of a date
stated thereon.
17. TERMINATION
Either party may terminate this Agreement at any time upon sixty (60)
days' written notice to the other party. If Customer notifies Bank of
termination under this provision, and subsequently desires to postpone
the effective date of termination, customer may do so for up to another
sixty (60) days, as long as Customer, prior to the expiration of the
original 60-day period, notifies Bank of its intention to postpone.
In the event Bank shall be dissolved or shall become incapable of acting,
or in the event that control of Bank or its offices shall be taken over
by any governmental authority, Customer, to the extent permitted by law,
may terminate this agreement at any time without regard to the 60-day
notice provision set forth in the immediately preceding paragraph.
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The Customer's obligations to the Bank pursuant to the sections under the
headings "Settlements," "Fees," "Indemnification," "Taxes," and "Security
Interest" shall survive the termination of this Agreement. In like
manner, the Bank's obligations to the Customer pursuant to the paragraphs
under the headings "Access to Records," "Corporate Actions," and
"Custodian Responsibility" shall survive the termination of this
Agreement.
Except as provided in Section 14, upon termination of this Agreement or
in the event a successor to the Bank shall be selected or appointed the
Bank shall make delivery or payment of cash or Financial Assets held by
the Bank hereunder whether or not full payment shall have been made to
the Bank of all the Bank's fees, compensation, costs, and expenses, or
whether the Bank shall have been furnished with security and indemnity
satisfactory to the Bank against any liability, obligation, fees,
compensation, cost or expense in connection with this Agreement (to the
extent the Bank is entitled thereto under this Agreement.) Anything in
this agreement to the contrary notwithstanding, except as provided in
Section 14 nothing herein shall be construed to allow the Bank to recoup
or set off any of the Bank's fees, charges, or other claims against any
Financial Assets held by the Bank as custodian hereunder.
18. NOTICES
Notices with respect to termination, specification of Authorized Officers
and terms and conditions for Instructions required hereunder shall be in
writing, and shall be deemed to have been duly given if delivered
personally; delivered by courier service; or sent by mail (postage
prepaid), as the case may be, to and received at the following addresses
(or to such other address as either party hereto may from time to time
designate by notice duly given in accordance with this paragraph):
To the Customer at:
Lincoln National Growth and Income Fund, Inc.
Attention: Securities Custody/Treasurer
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
To the Bank, to the attention of the individual designated by the Bank as
the safekeeping account administrator for the Customer's account, at:
The Chase Manhattan Bank
North American Insurance Securities Services
3 Chase Metro Tech Center, Sixth Floor
Brooklyn, New York 11245
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19. GOVERNING LAW; HEADINGS
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its law as to conflict
of laws.
The headings of the paragraphs hereof are included for convenience of
reference only and do not form a part of this Agreement.
20. PRIOR PROPOSALS; SUCCESSORS AND ASSIGNS
This Agreement (including any Riders relating to additional services in
respect of the Custody Account or the Custody Cash Account which the
Customer may request of the Bank) shall contain the complete agreement of
the parties hereto with respect to the Custody Account and the Custody
Cash Account (except as may be expressly provided to the contrary herein)
and supersedes and replaces any previously made proposals,
representations, warranties or agreements with respect thereto by either
or both of the parties hereto. This Agreement shall become effective upon
execution hereof by the Customer and acceptance by the Bank. It is
binding on the parties, their successors and assigns.
21. SEPARABILITY
Any provisions of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
22. RESERVATION OF RIGHT
The Bank shall have the right not to accept for deposit to the Custody
Account any Securities which are in a form or condition which the Bank
and the Customer mutually agree are not suitable for the services which
the Bank provides under this Agreement.
23. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original and together shall constitute one and
the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed, in one or more counterparts, in its name and on its behalf by its duly
authorized representatives:
THE CHASE MANHATTAN BANK The Lincoln National Growth and Income Fund, Inc.
By: By:
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Typed Name: Typed Name:
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Title: Title:
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