CUSTODY AGREEMENT
Agreement made as of this 20th day of September, 1991, between XXXX XXXXXX
MULTI-STATE MUNICIPAL SERIES TRUST, a Massachusetts business trust organized and
existing under the laws of the Commonwealth of Massachusetts, having its
principal office and place of business at 0 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its principal office and
place of business at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter
called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, shall have the following meanings:
1. "Agreement" shall mean this Custody Agreement and all
Appendices and Certifications described in the Exhibits
delivered in connection herewith.
2. "Authorized Person" shall mean any person, whether or not
such person is an Officer or employee of the Fund, duly authorized by
the Board of Trustees of the Fund to give Oral Instructions and
Written Instructions 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, provided that
each person who is designated in any such Certificate as an "Officer
of DWTC" shall be an Authorized Person only for purposes of Articles
XII and XIII hereof.
3. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency securities, its successor or successors and its
nominee or nominees.
4. "Call Option" shall mean an exchange traded option with
respect to Securities other than Index, 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 instruments,
currency, or 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 received (irrespective of
constructive receipt) by the Custodian and signed on behalf of the
Fund by any two Officers. The term Certificate shall also include
instructions by the Fund to the Custodian communicated by a 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 any Put Option guarantee letter or similar
document described in paragraph 8 of Article V 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 instruments, currency, or Securities
(excluding Futures Contracts) which are owned by the writer thereof.
9. "Depository" shall mean The Depository Trust Company ("DTC"),
a clearing agency registered with the Securities and Exchange
Commission, its successor or successors and its nominee or nominees.
The term "Depository" shall further mean and include any other person
authorized to act as a depository under the Investment Company Act of
1940, its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of the
Fund's Board of Trustees specifically approving deposits therein by
the Custodian.
10. "Financial Futures Contract" shall mean the firm
commitment to buy or sell financial instruments on a U.S. com-
modities exchange or board of trade at a specified future time
at an agreed upon price.
11. "Futures Contract" shall mean a Financial Futures
Contract and/or Index Futures Contracts.
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12. "Futures Contract Option" shall mean an option with
respect to a Futures Contract.
13. "Investment Company Act of 1940" shall mean the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
14. "Index Futures Contract" shall mean a bilateral agreement
pursuant to which the parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the
difference between the value of a particular index at the close of
the last business day of the contract and the price at which the
futures contract is originally struck.
15. "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.
16. "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 a 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.
17. "Money Market Security" shall mean all instruments and
obligations commonly known as a money market instruments, where the
purchase and sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale, including,
without limitation, certain Reverse Repurchase Agreements, debt
obligations issued or guaranteed as to interest and/or principal by
the government of the United States or agencies or instrumentalities
thereof, any tax, bond or revenue anticipation note issued by any
state or municipal government or public authority, commercial paper,
certificates of deposit and bankers' acceptances, repurchase
agreements with respect to Securities and bank time deposits.
18. "O.C.C." shall mean the Options Clearing Corpora-
tion, a clearing agency registered under Section 17A of the
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Securities Exchange Act of 1934, its successor or successors, and its
nominee or nominees.
19. "Officers" shall mean the President, any Vice President, the
Secretary, the Clerk, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Clerk, any Assistant Treasurer, and any
other person or persons, whether or not any such other person is an
officer or employee of the Fund, but in each case only if duly
authorized by the Board of Trustees of the Fund to execute any
Certificate, instruction, notice or other instrument on behalf of the
Fund and listed in the Certificate annexed hereto as Appendix B or
such other Certificate as may be received by the Custodian from time
to time; provided that each person who is designated in any such
Certificate as holding the position of "Officer of DWTC" shall be an
Officer only for purposes of Articles XII and XIII hereof.
20. "Option" shall mean a Call Option, Covered Call Op-
tion, Index Option and/or a Put Option.
21. "Oral Instructions" shall mean verbal instructions actually
received (irrespective of constructive receipt) by the Custodian from
an Authorized Person or from a person reasonably believed by the
Custodian to be an Authorized Person.
22. "Put Option" shall mean an exchange traded option with
respect to instruments, currency, or Securities other than Index
Options, Futures Contracts, and Futures Contract Options entitling
the holder, upon timely exercise and tender of the specified
underlying instruments, currency, or Securities, to sell such
instruments, currency, or Securities to the writer thereof for the
exercise price.
23. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which the Fund sells Securities and agrees to repurchase
such Securities at a described or specified date and price.
24. "Security" shall be deemed to include, without limitation,
Money Market Securities, Call Options, Put Options, Index Options,
Index Futures Contracts, Index Futures Contract Options, Financial
Futures Contracts, Financial Futures Contract Options, Reverse
Repurchase Agreements, over the counter options on Securities, 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
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for the same, or evidencing or representing any other rights or
interest therein, or rights to any property or assets.
25. "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 recorda- tion or otherwise,
within the custody account in which certain Securities and/or other
assets of the Fund specifically allocated to such Series shall be
deposited and withdrawn from time to time in accordance with
Certificates received by the Custodian in connection with such
transactions as the Fund may from time to time determine.
26. "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, except that if the Fund does not have more
than one portfolio, "Series" shall mean the Fund or be ignored where
a requirement would be imposed on the Fund or the Custodian which is
unnecessary if there is only one portfolio.
27. "Shares" shall mean the shares of beneficial inter-
est of the Fund and its Series.
28. "Terminal Link" shall mean an electronic data transmission
link between the Fund and the Custodian requiring in connection with
each use of the Terminal Link the use of an authorization code
provided by the Custodian and at least two access codes established
by the Fund, provided, that the Fund shall have delivered to the
Custodian a Certificate substantially in the form of Appendix C.
29. "Transfer Agent" shall xxxx Xxxx Xxxxxx Trust
Company, a New Jersey limited purpose trust company, its suc-
cessors and assigns.
30. "Transfer Agent Account" shall mean any account in the name
of the Transfer Agent maintained with The Bank of New York pursuant
to a Cash Management and Related Services Agreement between The Bank
of New York and the Transfer Agent.
31. "Written Instructions" shall mean written communications
actually received (irrespective of constructive receipt) by the
Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person by telex or any
other such system whereby the receiver of such communications is able
to verify by codes or otherwise with a reasonable degree of certainty
the identity of the sender of such communication.
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ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the Custodian as
custodian of the Securities and moneys at any time owned by the Fund
during the period of this Agreement.
2. The Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article
and in Article VIII, the Fund will deliver or cause to be delivered
to the Custodian all Securities and all moneys owned by it, at any
time during the period of this Agreement, and shall specify with
respect to such Securities and money the Series to which the same are
specifically allocated, and the Custodian shall not be responsible
for any Securities or money not so delivered. The Custodian shall
physically segregate, keep and maintain the Securities of the Series
separate and apart from each other Series and from other assets held
by the Custodian. Except as otherwise expressly provided in this
Agreement, the Custodian will not be responsible for any Securities
and moneys not actually received by it, unless the Custodian has been
negligent or has engaged in willful misconduct with respect thereto.
The Custodian will be entitled to reverse any credits of money made
on the Fund's behalf where such credits have been previously made and
moneys are not finally collected, unless the Custodian has been
negligent or has engaged in willful misconduct with respect thereto.
The Fund shall deliver to the Custodian a certified resolution of the
Board of Trustees of the Fund, substantially in the form of Exhibit A
hereto, approving, authorizing and instructing the Custodian on a
continuous and on-going basis to deposit in the Book-Entry System all
Securities eligible for deposit therein, regardless of the Series to
which the same are specifically allocated and to utilize the
Book-Entry System to the extent possible in connection with its
performance hereunder, including, without limitation, in connection
with settlements of purchases and sales of Securities, loans of
Securities and deliveries and returns of Securities collateral. Prior
to a deposit of Securities specifically allocated to a Series in any
Depository, the Fund shall deliver to the Custodian a certified
resolution of the Board of Trustees of the Fund,
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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 to deposit in
such Depository all Securities specifically allocated to such Series
eligible for deposit therein, and to utilize such 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 a Depository will be represented in accounts which include
only assets held by the Custodian for customers, including, but not
limited to, accounts in which the Custodian acts in a fiduciary or
representative capacity and will be specifically allocated on the
Custodian's books to the separate account for the applicable Series.
Prior to the Custodian's accepting, utilizing and acting with respect
to Clearing Member confirmations for Options and transactions in
Options for a Series as provided in this Agreement, the Custodian
shall have received a certified resolution of the Fund's Board of
Trustees, substantially in the form of Exhibit C hereto, approving,
authorizing and instructing the Custodian on a continuous and
on-going basis, until instructed to the contrary by a Certificate, to
accept, utilize and act in accordance with such confirmations as
provided in this Agreement with respect to such Series. All
securities are to be held or disposed of by the Custodian for, and
subject at all times to the instructions of, the Fund pursuant to the
terms of this Agreement. The Custodian shall have no power or
authority to assign, hypothecate, pledge or otherwise dispose of any
Securities except as provided by the terms of this Agreement, and
shall have the sole power to release and deliver Securities held
pursuant to this Agreement.
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. Such moneys will be held in such manner
and account as the Fund and the Custodian shall agree upon in writing
from time to time. Money credited to a separate account for a Series
shall be subject only to drafts, orders, or charges of the Custodian
pursuant to this Agreement and shall be disbursed by the Custodian
only:
(a) As hereinafter provided;
(b) Pursuant to Resolutions of the Fund's Board of Trustees
certified by an Officer and by the Secretary or Assistant Secretary
of the Fund 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, the purpose for which payment is to be made, and
declaring such purpose to
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be a proper corporate purpose; provided, however, that amounts
representing dividends or distributions with respect to
Shares shall be paid only to the Transfer Agent Account;
(c) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian attributable to
such Series and authorized by this Agreement; or
(d) Pursuant to Certificates to pay interest, taxes,
management fees or operating expenses (including, without limitation
thereto, Board of Trustees' fees and expenses, and fees for legal
accounting and auditing services), which Certificates set forth the
name and address of the person to whom payment is to be made, state
the purpose of such payment and designate the Series for whose
account the payment is to be made.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund with confirmations and a summary, on
a per Series basis, of all transfers to or from the account of the
Fund for a Series, either hereunder or with any co-custodian or
sub-custodian appointed in accordance with this Agreement during said
day. Where Securities are transferred to the account of the Fund for
a Series but held in a Depository, the Custodian shall upon such
transfer also by book-entry or otherwise identify such Securities as
belonging to such Series in a fungible bulk of Securities registered
in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the
Depository. At least monthly and from time to time, the Custodian
shall furnish the Fund with a detailed statement, on a per Series
basis, of the Securities and moneys held under this Agreement for the
Fund.
4. Except as otherwise provided in paragraph 7 of this Article
and in Article VIII, all Securities held by the Custodian hereunder,
which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the
Custodian in that form; all other Securities held hereunder may be
registered in the name of the Fund, in the name of any duly appointed
registered nominee of the Custodian as the Custodian may from time to
time determine, or in the name of the Book-Entry System or a
Depository or their successor or successors, or their nominee or
nominees. The Fund agrees to furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or
in the name of the Book-Entry System or a 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 a Depository in a separate account in the
name of such Series physically segregated at all times from those of
any other person or persons.
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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 a
Depository with respect to Securities held hereunder and therein
deposited, shall with respect to all Securities held for the Fund
hereunder in accordance with preceding paragraph 4:
(a) Promptly collect all income and dividends due
or payable;
(b) Promptly give notice to the Fund and promptly present
for payment and collect the amount of money or other consideration
payable upon such Securities which are called, but only if either (i)
the Custodian receives a written notice of such call, or (ii) notice
of such call appears in one or more of the publications listed in
Appendix D annexed hereto, which may be amended at any time by the
Custodian without the prior consent of the Fund, provided the
Custodian gives prior notice of such amendment to the Fund;
(c) Promptly present for payment and collect for
the Fund's account the amount payable upon all Securities
which mature;
(d) Promptly surrender Securities in temporary form
in exchange for definitive Securities;
(e) Promptly execute, as custodian, any necessary
declarations or certificates of ownership under the Federal Income
Tax Laws or the laws or regulations of any other taxing authority now
or hereafter in effect;
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the
account of a Series, all rights and similar securities issued with
respect to any Securities held by the Custodian for such Series
hereunder; and
(g) Promptly deliver to the Fund all notices, prox- ies,
proxy soliciting materials, consents and other written information
(including, without limitation, notices of tender offers and exchange
offers, pendency of calls, maturities of Securities and expiration of
rights) relating to Securities held pursuant to this Agreement which
are actually received by the Custodian, such proxies and other
similar materials to be executed by the registered holder (if
Securities are registered otherwise than in the name of the Fund),
but without indicating the manner in which proxies or consents are to
be voted.
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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) Promptly execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations, and
any other instruments whereby the authority of the Fund as owner of
any Securities held hereunder for the Series specified in such
Certificate may be exercised;
(b) Promptly deliver any Securities held hereunder for the
Series specified in such Certificate in exchange for other Securities
or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any right,
warrant or conversion privilege and receive and hold hereunder
specifically allocated to such Series any cash or other Securities
received in exchange;
(c) Promptly deliver any Securities held hereunder for the
Series specified in such Certificate to any protective committee,
reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and hold hereunder
specifically allocated to such Series in exchange therefor such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery or such
Securities as may be issued upon such delivery; and
(d) Promptly present for payment and collect the amount
payable upon Securities which may be called as specified in the
Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any
instrument or certificate representing any Futures Contract, any
Option, or any Futures Contract Option until after it shall have
determined, or shall have received a Certificate from the Fund
stating, that any such instruments or certificates are available. The
Fund shall deliver to the Custodian such a Certificate no later than
the business day preceding the availability of any such instrument or
certificate. Prior to such availability, the Custodian shall comply
with Section 17(f) of the Investment Company Act of 1940 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 in connection
with any such purchase, sale, writing, settlement or closing out upon
its receipt from a broker, dealer, or futures commission merchant of
a statement or confirmation reasonably believed by the Custodian to
be in the form customarily used by brokers, dealers, or future
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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 execution of a purchase of Securities by
the Fund, other than a purchase of an Option, a Futures Contract, or
a Futures Contract Option, the Fund shall deliver to the Custodian
(i) with respect to each purchase of Securities which are not Money
Market Securities, a Certificate, and (ii) with respect to each
purchase of Money Market Securities, a Certificate, Oral Instructions
or Written 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 such
Securities purchased by or for the Fund, pay to the broker specified in
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the Certificate out of the moneys held for the account of such Series
the total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such
Certificate, Oral Instructions or Written Instructions.
2. Promptly after each execution of a 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 such 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, Oral Instructions or Written 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 and
settlement; (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. On the settlement date, the Custodian shall
deliver the Securities specifically allocated to such Series to the
broker in accordance with generally accepted street practices and as
specified in the Certificate 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, Oral
Instructions or Written Instructions.
ARTICLE V
OPTIONS
1. Promptly after each execution of a purchase of any Option by
the Fund other than a closing purchase transaction the Fund shall
deliver to the Custodian a Certificate specifying with respect to
each Option purchased: (a) the Series to which such Option is
specifically allocated; (b) the type of Option (put or call); (c) the
instrument, currency, or Security underlying such Option and the
number of Options, or the name of the in the case of an Index Option,
the index to which such Option relates and the number of 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; and (h) the
name of the Clearing Member through whom such Option was purchased.
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
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Custodian) as custodian for the Fund, out of moneys held for the
account of the Series to which such Option is to be specifically
allocated, the total amount payable upon such purchase to the
Clearing Member through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in such
Certificate.
2. Promptly after the execution of a sale of any Option
purchased by the Fund, other than a closing sale transaction,
pursuant to paragraph 1 hereof, the Fund shall deliver to the
Custodian a Certificate specifying with respect to each such sale:
(a) the Series to which such Option was specifically allocated; (b)
the type of Option (put or call); (c) the instrument, currency, or
Security underlying such Option and the number of Options, or the
name of the issuer and the title and number of shares subject to such
Option or, in the case of a Index Option, the index to which such
Option relates and the number of Index Options sold; (d) the date of
sale; (e) the sale price; (f) the date of settlement; (g) the total
amount payable to the Fund upon such sale; and (h) the name of the
Clearing Member through whom the sale was made. The Custodian shall
consent to the delivery of the Option sold by the Clearing Member
which previously supplied the confirmation described in preceding
paragraph 1 of this Article with respect to such Option against
payment to the Custodian of the total amount payable to the Fund,
provided that the same conforms to the total amount payable as set
forth in such Certificate.
3. Promptly after the exercise by the Fund of any Call Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to
such Call Option: (a) the Series to which such Call Option was
specifically allocated; (b) the name of the issuer and the title and
number of shares subject to the Call Option; (c) the expiration date;
(d) the date of exercise and settlement; (e) the exercise price per
share; (f) the total amount to be paid by the Fund upon such
exercise; and (g) the name of the Clearing Member through whom such
Call Option was exercised. The Custodian shall, upon receipt of the
Securities underlying the Call Option which was exercised, pay out of
the moneys held for the account of the Series to which such Call
Option was specifically allocated the total amount payable to the
Clearing Member through whom the Call Option was exercised, provided
that the same conforms to the total amount payable as set forth in
such Certificate.
4. Promptly after the exercise by the Fund of any Put Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to
such Put Option: (a) the Series to which such Put Option was
specifically allocated; (b) the name of the issuer and the title and
number of shares subject to the Put Option; (c) the expiration date;
(d) the date of exercise
- 13 -
and settlement; (e) the exercise price per share; (f) the total
amount to be paid to the Fund upon such exercise; and (g) the name of
the Clearing Member through whom such Put Option was exercised. The
Custodian shall, upon receipt of the amount payable upon the exercise
of the Put Option, deliver or direct a 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 Index Option
purchased by the Fund pursuant to paragraph 1 hereof, the Fund shall
deliver to the Custodian a Certificate specifying with respect to
such Index Option: (a) the Series to which such Index Option was
specifically allocated; (b) the type of Index Option (put or call);
(c) the number of Options being exercised; (d) the index to which
such Option relates; (e) the expiration date; (f) the exercise price;
(g) the total amount to be received by the Fund in connection with
such exercise; and (h) the Clearing Member from whom such payment is
to be received.
6. Whenever the Fund writes a Covered Call Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Covered Call Option: (a) the Series for which such
Covered Call Option was written; (b) the name of the issuer and the
title and number of shares for which the Covered Call Option was
written and which underlie the same; (c) the expiration date; (d) the
exercise price; (e) the premium to be received by the Fund; (f) the
date such Covered Call Option was written; and (g) the name of the
Clearing Member through whom the premium is to be received. The
Custodian shall deliver or cause to be delivered, in exchange for
receipt of the premium specified in the Certificate with respect to
such Covered Call Option, such receipts as are required in accordance
with the customs prevailing among Clearing Members dealing in Covered
Call Options and shall impose, or direct a 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 a Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund and
described in the preceding paragraph of this Article is exercised,
the Fund shall promptly deliver to the Custodian a Certificate
instructing the Custodian to deliver, or to direct the Depository to
deliver, the Securities subject to such Covered Call Option and
specifying: (a) the Series for which such Covered Call Option was
written; (b) the name of the issuer and the title and number of
shares subject to the Covered Call Option; (c) the Clearing Member to
whom the underlying
- 14 -
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 a Depository to deliver, the
underlying Securities as specified in the Certificate against payment
of the amount to be received as set forth in such Certificate.
8. Whenever the Fund writes a Put Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to such Put Option: (a) the Series for which such Put Option
was written; (b) the name of the issuer and the title and number of
shares for which the Put Option is written and which underlie the
same; (c) the expiration date; (d) the exercise price; (e) the
premium to be received by the Fund; (f) the date such Put Option is
written; (g) the name of the Clearing Member through whom the premium
is to be received and to whom a Put Option guarantee letter is to be
delivered; (h) the amount of cash, and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be
deposited in the Senior Security Account for such Series; and (i) the
amount of cash and/or the amount and kind of Securities specifically
allocated to such Series to be deposited into the Collateral Account
for such Series. The Custodian shall, after making the deposits into
the Collateral Account specified in the Certificate, issue a Put
Option guarantee letter substantially in the form utilized by the
Custodian on the date hereof, and deliver the same to the Clearing
Member specified in the Certificate against receipt of the premium
specified in said Certificate. Notwithstanding the foregoing, the
Custodian shall be under no obligation to issue any Put Option
guarantee letter or similar document if it is unable to make any of
the representations contained therein.
9. Whenever a Put Option written by the Fund and described in
the preceding paragraph is exercised, the Fund shall promptly deliver
to the Custodian a Certificate specifying: (a) the Series to which
such Put Option was written; (b) the name of the issuer and title and
number of shares subject to the Put Option; (c) the Clearing Member
from whom the underlying Securities are to be received; (d) the total
amount payable by the Fund upon such delivery; (e) the amount of cash
and/or the amount and kind of Securities specifically allocated to
such Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of
Securities, specifically allocated to such Series, if any, to be
withdrawn from the Senior Security Account. Upon the return and/or
cancellation of any Put Option guarantee letter or similar document
issued by the Custodian in connection with such Put Option, the
Custodian shall pay out of the moneys held for the account of the
Series to which such Put Option was specifically allocated the total
amount payable to the Clearing Member specified in the Certificate as
set forth in such Certificate, against delivery of such
- 15 -
Securities, and shall make the withdrawals specified in such
Certificate.
10. Whenever the Fund writes an Index Option, the Fund shall
promptly deliver to the Custodian a Certificate specifying with
respect to such Index Option: (a) the Series for which such Index
Option was written; (b) whether such Index Option is a put or a call;
(c) the number of options written; (d) the 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
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 an Index Option written by the Fund and described
in the preceding paragraph of this Article is exercised, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Index Option: (a) the Series for which such Index
Option was written; (b) such information as may be necessary to
identify the Index Option being exercised; (c) the Clearing Member
through whom such Index Option is being exercised; (d) the total
amount payable upon such exercise, and whether such amount is to be
paid by or to the Fund; (e) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Margin Account; and
(f) the amount of cash and/or amount and kind of Securities, if any,
to be withdrawn from the Senior Security Account for such Series; and
the amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Collateral Account for such Series. Upon the
return and/or cancellation of the receipt, if any, delivered pursuant
to the preceding paragraph of this Article, the Custodian shall pay
out of the moneys held for the account of the Series to which such
Stock Index Option was specifically allocated to the Clearing Member
specified in the Certificate the total amount payable, if any, as
specified therein.
- 16 -
12. Promptly after the execution of a purchase or sale by the
Fund of 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" or a "Closing Sale
Transaction", the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to the Option being purchased:
(a) that the transaction is a Closing Purchase Transaction or a
Closing Sale Transaction; (b) the Series for which the Option was
written; (c) the instrument, currency, or Security subject to the
Option, or, in the case of an Index Option, the index to which such
Option relates and the number of Options held; (d) the exercise
price; (e) the premium to be paid by or the amount to be paid to the
Fund; (f) the expiration date; (g) the type of Option (put or call);
(h) the date of such purchase or sale; (i) the name of the Clearing
Member to whom the premium is to be paid or from whom the amount is
to be received; 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 or receipt of the
amount, as the case may be, specified in the Certificate 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 or the
Closing Sale Transaction, the Custodian shall remove, or direct a
Depository to remove, the previously imposed restrictions on the
Securities underlying the Call Option.
13. Upon the expiration, exercise or consummation of a Closing
Purchase Transaction with respect to any Option purchased or written
by the Fund and described in this Article, the Custodian shall delete
such Option from the statements delivered to the Fund pursuant to
paragraph 3 Article III herein, and upon the return and/or
cancellation of any receipts issued by the Custodian, shall make such
withdrawals from the Collateral Account, and the Margin Account
and/or the Senior Security Account as may be specified in a
Certificate received in connection with such expiration, exercise, or
consummation.
14. Securities acquired by the Fund through the exercise of an
Option described in this Article shall be subject to Article IV
hereof.
- 17 -
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a
Certificate specifying with respect to such Futures Contract,
(or with respect to any number of identical Futures Contract(s)): (a)
the Series for which the Futures Contract is being entered; (b) the
category of Futures Contract (the name of the underlying index or
financial instrument); (c) the number of identical Futures Contracts
entered into; (d) the delivery or settlement date of the Futures
Contract(s); (e) the date the Futures Contract(s) was (were) entered
into and the maturity date; (f) whether the Fund is buying (going
long) or selling (going short) such Futures Contract(s); (g) the
amount of cash and/or the amount and kind of Securities, if any, to
be deposited in the Senior Security Account for such Series; (h) the
name of the broker, dealer, or futures commission merchant through
whom the Futures Contract was entered into; and (i) the amount of fee
or commission, if any, to be paid and the name of the broker, dealer,
or futures commission merchant to whom such amount is to be paid. The
Custodian shall make the deposits, if any, to the Margin Account in
accordance with the terms and conditions of the Margin Account
Agreement. The Custodian shall make payment out of the moneys
specifically allocated to such Series of the fee or commission, if
any, specified in the Certificate and deposit in the Senior Security
Account for such Series the amount of cash and/or the amount and kind
of Securities specified in said Certificate.
2. (a) Any variation margin payment or similar payment required
to be made by the Fund to a broker, dealer, or futures commission
merchant with respect to an outstanding Futures Contract shall be
made by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a
broker, dealer, or futures commission merchant to the Fund with
respect to an outstanding Futures Contract shall be received and
dealt with by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder
is retained by the Fund until delivery or settlement is made on such
Futures Contract, the Fund shall deliver to the Custodian prior to
the delivery or settlement date a Certificate specifying: (a) the
Futures Contract and the Series to which the same relates; (b) with
respect to an Index Futures Contract, the total cash settlement
amount to be paid
- 18 -
or received, and with respect to a Financial
Futures Contract, the Securities and/or amount of cash to be
delivered or received; (c) the broker, dealer, or futures commission
merchant to or from whom payment or delivery is to be made or
received; and (d) the amount of cash and/or Securities to be
withdrawn from the Senior Security Account for such Series. The
Custodian shall make the payment or delivery specified in the
Certificate, and delete such Futures Contract from the
statements delivered to the Fund pursuant to paragraph 3 of
Article III herein.
4. Whenever the Fund shall enter into a Futures Contract to
offset a Futures Contract held by the Custodian hereunder, the Fund
shall deliver to the Custodian a Certificate specifying: (a) the
items of information required in a Certificate described in paragraph
1 of this Article, and (b) the Futures Contract being offset. The
Custodian shall make payment out of the money specifically allocated
to such Series of the fee or commission, if any, specified in the
Certificate and delete the Futures Contract being offset from the
statements delivered to the Fund pursuant to paragraph 3 of Article
III herein, and make such withdrawals from the Senior Security
Account for such Series as may be specified in such Certificate. The
withdrawals, if any, to be made from the Margin Account shall be made
by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the execution of a purchase of any Futures
Contract Option by the Fund, the Fund shall 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.
- 19 -
2. Promptly after the execution of a sale of any Futures
Contract Option purchased by the Fund pursuant to paragraph 1 hereof,
the Fund shall deliver to the Custodian a Certificate specifying with
respect to each such sale: (a) Series to which such Futures Contract
Option was specifically allocated; (b) the type of Future Contract
Option (put or call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the
sale price; (f) the date of settlement; (g) the total amount payable
to the Fund upon such sale; and (h) the name of the broker of futures
commission merchant through whom the sale was made. The Custodian
shall consent to the cancellation of the Futures Contract Option
being closed against payment to the Custodian of the total amount
payable to the Fund, provided the same conforms to the total amount
payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the Fund
pursuant to paragraph 1 is exercised by the Fund, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a) the
Series to which such Futures Contract Option was specifically
allocated; (b) the particular Futures Contract Option (put or call)
being exercised; (c) the type of Futures Contract underlying the
Futures Contract Option; (d) the date of exercise; (e) the name of
the broker or futures commission merchant through whom the Futures
Contract Option is exercised; (f) the net total amount, if any,
payable by the Fund; (g) the amount, if any, to be received by the
Fund; and (h) the amount of cash and/or the amount and kind of
Securities to be deposited in the Senior Security Account for such
Series. The Custodian shall make, out of the moneys and Securities
specifically allocated to such Series, the payments of money, if any,
and the deposits of Securities, if any, into the Senior Security
Account as specified in the Certificate. The deposits, if any, to be
made to the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
4. Whenever the Fund writes a Futures Contract Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying with
respect to such Futures Contract Option: (a) the Series for which
such Futures Contract Option was written; (b) the type of Futures
Contract Option (put or call); (c) the type of Futures Contract and
such other information as may be necessary to identify the Futures
Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the
Fund; (g) the name of the broker or futures commission merchant
through whom the premium is to be received; and (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
deposited in the Senior Security Account for such Series. The
Custodian shall, upon receipt of the premium specified in the
Certificate, make out of the moneys and Securities specifically
allocated to such Series the deposits into the Senior Security
Account, if any, as specified in the Certificate. The deposits, if
any, to be made to the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin Account
Agreement.
- 20 -
5. Whenever a Futures Contract Option written by the Fund which
is a call is exercised, the Fund shall promptly deliver to the
Custodian a Certificate specifying: (a) the Series to which such
Futures Contract Option was specifically allocated; (b) the
particular Futures Contract Option exercised; (c) the type of Futures
Contract underlying the Futures Contract Option; (d) the name of the
broker or futures commission merchant through whom such Futures
Contract Option was exercised; (e) the net total amount, if any,
payable to the Fund upon such exercise; (f) the net total amount, if
any, payable by the Fund upon such exercise; and (g) the amount of
cash and/or the amount and kind of Securities to be deposited in the
Senior Security Account for such Series. The Custodian shall, upon
its receipt of the net total amount payable to the Fund, if any,
specified in such Certificate make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in
the Certificate. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the terms
and conditions of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written by the
Fund and which is a put is exercised, the Fund shall promptly deliver
to the Custodian a Certificate specifying: (a) the Series to which
such Option was specifically allocated; (b) the particular Futures
Contract Option exercised; (c) the type of Futures Contract
underlying such Futures Contract Option; (d) the name of the broker
or futures commission merchant through whom such Futures Contract
Option is exercised; (e) the net total amount, if any, payable to the
Fund upon such exercise; (f) the net total amount, if any, payable by
the Fund upon such exercise; and (g) the amount and kind of
Securities and/or cash to be withdrawn from or deposited in, the
Senior Security Account for such Series, if any. The Custodian shall,
upon its receipt of the net total amount payable to the Fund, if any,
specified in the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in
the Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
- 21 -
7. Promptly after the execution by the Fund of a purchase of any
Futures Contract Option identical to a previously written Futures
Contract Option described in this Article in order to liquidate its
position as a writer of such Futures Contract Option, the Fund shall
deliver to the Custodian a Certificate specifying with respect to the
Futures Contract Option being purchased: (a) the Series to which such
Option is specifically allocated; (b) that the transaction is a
closing transaction; (c) the type of Future Contract and such other
information as may be necessary to identify the
Futures Contract underlying the Futures Option Contract; (d) the
exercise price; (e) the premium to be paid by the Fund; (f) the
expiration date; (g) the name of the broker or futures commission
merchant to whom the premium is to be paid; and (h) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account for such Series. The
Custodian shall effect the withdrawals from the Senior Security
Account specified in the Certificate. The withdrawals, if any, to be
made from the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
8. Upon the expiration, exercise, or consummation of a closing
transaction with respect to, any Futures Contract Option written or
purchased by the Fund and described in this Article, the Custodian
shall (a) delete such Futures Contract Option from the statements
delivered to the Fund pursuant to paragraph 3 of Article III herein
and, (b) make such withdrawals from and/or in the case of an exercise
such deposits into the Senior Security Account as may be specified in
a Certificate. The deposits to and/or withdrawals from the Margin
Account, if any, shall be made by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the exercise
of a Futures Contract Option described in this Article shall be
subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after the execution of any short sales of Securities
by any Series of the Fund, the Fund shall 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
- 22 -
price per unit; (f) the total amount credited to the Fund
upon such sale, if any, (g) the amount of cash and/or the amount and
kind of Securities, if any, which are to be deposited in a Margin
Account and the name in which such Margin Account has been or is to
be established; (h) the amount of cash and/or the amount and kind of
Securities, if any, to be deposited in a Senior Security Account, and
(i) the name of the broker through whom such short sale was made. The
Custodian shall upon its receipt of a statement from such broker
confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by
such broker for the account of the Custodian (or any nominee of the
Custodian) as custodian of the Fund, issue a receipt or make the
deposits into the Margin Account and the Senior Security Account
specified in the Certificate.
2. Promptly after the execution of a purchase to close-out any
short sale of Securities, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to each such closing
out: (a) the Series for which such transaction is being made; (b) the
name of the issuer and the title of the Security; (c) the number of
shares or the principal amount, and accrued interest or dividends, if
any, required to effect such closing-out to be delivered to the
broker; (d) the dates of closing-out and settlement; (e) the purchase
price per unit; (f) the net total amount payable to the Fund upon
such closing-out; (g) the net total amount payable to the broker upon
such closing-out; (h) the amount of cash and the amount and kind of
Securities to be withdrawn, if any, from the Margin Account; (i) the
amount of cash and/or the amount and kind of Securities, if any, to
be withdrawn from the Senior Security Account; and (j) the name of
the broker through whom the Fund is effecting such closing-out. The
Custodian shall, upon receipt of the net total amount payable to the
Fund upon such closing-out, and the return and/ or cancellation of
the receipts, if any, issued by the Custodian with respect to the
short sale being closed-out, pay out of the moneys held for the
account of the Fund to the broker the net total amount payable to the
broker, and make the withdrawals from the Margin Account and the
Senior Security Account, as the same are specified in the
Certificate.
- 23 -
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase Agreement
with respect to Securities and money held by the Custodian hereunder,
the Fund shall deliver to the Custodian a Certificate, or in the
event such Reverse Repurchase Agreement is a Money Market Security, a
Certificate, Oral Instructions, or Written 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, dealer, or financial institution with whom
the Reverse Repurchase Agreement is entered; (d) the amount and kind
of Securities to be delivered by the Fund to such broker, dealer, or
financial institution; (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,
Oral Instructions, or Written Instructions make the delivery to the
broker, dealer, or financial institution and the deposits, if any, to
the Senior Security Account, specified in such Certificate, Oral
Instructions, or Written
Instructions.
2. Upon the termination of a Reverse Repurchase Agreement
described in preceding paragraph 1 of this Article, the Fund shall
promptly deliver a Certificate or, in the event such Reverse
Repurchase Agreement is a Money Market Security, a Certificate, Oral
Instructions, or Written Instructions to the Custodian specifying:
(a) the Reverse Repurchase Agreement being terminated and the Series
for which same was entered; (b) the total amount payable by the Fund
in connection with such termination; (c) the amount and kind of
Securities to be received by the Fund and specifically allocated to
such Series in connection with such termination; (d) the date of
termination; (e) the name of the broker, dealer, or financial
institution with whom the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind of
Securities to be withdrawn from the Senior Securities Account for
such Series. The Custodian shall, upon receipt of the amount and kind
of Securities to be received by the Fund specified in the
Certificate, Oral Instructions, or Written Instructions, make the
payment to the broker, dealer, or financial institution and the
withdrawals, if any, from the Senior Security Account, specified in
such Certificate, Oral Instructions, or Written Instructions.
- 24 -
3. The Certificates, Oral Instructions, or Written Instructions
described in paragraphs 1 and 2 of this Article may with respect to
any particular Reverse Repurchase Agreement be combined and delivered
to the Custodian at the time of entering into such Reverse Repurchase
Agreement.
ARTICLE X
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Fund shall
deliver or cause to be delivered to the Custodian a Certificate
specifying with respect to each such loan: (a) the Series to which
the loaned Securities are specifically allocated; (b) the name of the
issuer and the title of the Securities, (c) the number of shares or
the principal amount loaned, (d) the date of loan and delivery, (e)
the total amount to be delivered to the Custodian against the loan of
the Securities, including the amount of cash collateral and the
premium, if any, separately identified, and (f) the name of the
broker, dealer, or financial institution
to which the loan was made. The Custodian shall deliver the
Securities thus designated to the broker, dealer or financial
institution to which the loan was made upon receipt of the total
amount designated in the Certificate 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 a
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.
2. In connection with each termination of a loan of Securities
by the Fund, the Fund shall deliver or cause to be delivered to the
Custodian a Certificate specifying with respect to each such loan
termination and return of Securities: (a) the Series to which the
loaned Securities are specifically allocated; (b) the name of the
issuer and the title of the Securities to be returned, (c) the number
of shares or the principal amount to be returned, (d) the date of
termination, (e) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any
offsetting credits as described in said Certificate), and (f) the
name of the broker, dealer, or financial institution from which the
Securities will be returned. The Custodian shall receive all
Securities returned from the broker, dealer, or financial institution
to which such Securities were loaned and upon receipt thereof shall
pay, out of the moneys held for the account of the Fund, the total
amount payable upon such return of Securities as set forth in the
Certificate.
- 25 -
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall establish a Senior Security Account and
from time to time make such deposits thereto, or withdrawals
therefrom, as specified in a Certificate. Such Certificate shall
specify the Series for which such deposit or withdrawal is to be made
and the amount of cash and/or the amount and kind of Securities
specifically allocated to such Series to be deposited in, or
withdrawn from, such Senior Security Account for such Series. In the
event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and the number of shares or the
principal amount of any particular Securities to be deposited by the
Custodian into, or withdrawn from, a Senior Securities Account, the
Custodian shall be under no obligation to make any such deposit or
withdrawal and shall promptly notify the Fund that no such deposit
has been made.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer, futures commission merchant or
Clearing Member in whose name, or for whose benefit, the account was
established as specified in the Margin Account Agreement.
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security
interest in and to any property at any time held by the Custodian in
any Collateral Account described herein. In accordance with
applicable law the Custodian may enforce its lien and realize on any
such property whenever the Custodian has made payment or delivery
pursuant to any Put Option guarantee letter or similar document or
any receipt issued hereunder by the Custodian. In the event the
Custodian should realize on any such property net proceeds which are
less than the Custodian's obligations under any Put Option guarantee
letter or similar document or any receipt, such deficiency shall be a
debt owed the Custodian by the Fund within the scope of Article XIV
herein.
5. On each business day the Custodian shall furnish the Fund
with a statement with respect to each Margin Account in which money
or Securities are held specifying as of the close of business on the
previous business day: (a) the name of the
- 26 -
Margin Account; (b) the amount and kind of Securities held therein;
and (c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures commission
merchant specified in the name of a Margin Account a copy of the
statement furnished the Fund with respect to such Margin Account.
6. The Custodian shall establish a Collateral Account and from
time to time shall make such deposits thereto as may be specified in
a Certificate. Promptly after the close of business on each business
day in which cash and/or Securities are maintained in a Collateral
Account for any Series, the Custodian shall furnish the Fund with a
statement with respect to such Collateral Account specifying the
amount of cash and/or the amount and kind of Securities held therein.
No later than the close of business next succeeding the delivery to
the Fund of such statement, the Fund shall furnish to the Custodian a
Certificate or Written Instructions specifying the then market value
of the Securities described in such statement. In the event such then
market value is indicated to be less than the Custodian's obligation
with respect to any outstanding Put Option guarantee letter or
similar document, the Fund shall promptly specify in a Certificate
the additional cash and/or Securities to be deposited in such
Collateral Account to eliminate such deficiency.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of the
resolution of the Board of Trustees of the Fund, certified by the
Secretary, the Clerk, any Assistant Secretary or any Assistant Clerk,
either (i) setting forth with respect to the Series specified therein
the date of the declaration of a dividend or distribution, the date
of payment thereof, the record date as of which shareholders entitled
to payment shall be determined, the amount payable per Share of such
Series to the shareholders of record as of that date and the total
amount payable to the Dividend Agent and any sub-dividend agent or
co-dividend agent of the Fund on the payment date, or (ii)
authorizing with respect to the Series specified therein and the
declaration of dividends and distributions thereon the Custodian to
rely on Oral Instructions, Written 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.
- 27 -
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions, or Certificate, as the case may
be, the Custodian shall pay to the Transfer Agent Account out of the
moneys held for the account of the Series specified therein 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 to be delivered, to the Custodian a Certificate duly
specifying:
(a) The Series, the number of Shares sold, trade
date, and price; and
(b) The amount of money to be received by the Custodian for
the sale of such Shares and specifically allocated to the separate
account in the name of such Series.
2. Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the separate account in the name
of the Series for which such money was received.
3. Upon issuance of any Shares of any Series the Custodian shall
pay, out of the money held for the account of such Series, all
original issue or other taxes required to be paid by the Fund in
connection with such issuance upon the receipt of a Certificate
specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund desires the
Custodian to make payment out of the money held by the Custodian
hereunder in connection with a redemption of any Shares, it shall
furnish, or cause to be furnished, 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 of an advice from an Authorized Person 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 Account out of
the moneys held in the separate account in the name of the Series the
total amount specified in the Certificate issued pursuant to the
foregoing paragraph 4 of this Article.
- 28 -
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion advance funds
on behalf of any Series which results in an overdraft because the
moneys held by the Custodian in the separate account for such Series
shall be insufficient to pay the total amount payable upon a purchase
of Securities specifically allocated to such Series, as set forth in
a Certificate, Oral Instructions, or Written 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, (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 the Federal Funds Rate plus
1/2%, such rate to be adjusted on the effective date of any change in
such Federal Funds 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 the aggregate amount of such
overdrafts and indebtedness as may from time to time exist 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 money 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, including pursuant to any Reverse Repurchase
Agreement, not so specified other than from the Custodian.
- 29 -
2. The Fund will cause to be delivered to the Custodian by any
bank (including, if the borrowing is pursuant to a separate
agreement, the Custodian) from which it borrows money for investment
or for temporary or emergency purposes using Securities held by the
Custodian hereunder as collateral for such borrowings, a notice or
undertaking in the form currently employed by any such bank setting
forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to
each such borrowing: (a) the Series to which such borrowing relates;
(b) the name of the bank, (c) the amount and terms of the borrowing,
which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Fund, or other loan agreement,
(d) the time and date, if known, on which the loan is to be entered
into, (e) the date on which the loan becomes due and payable, (f) the
total amount payable to the Fund on the borrowing date, (g) the
market value of Securities to be delivered as collateral for such
loan, including the name of the issuer, the title and the number of
shares or the principal amount of any particular Securities, and (h)
a statement specifying whether such loan is for investment purposes
or for temporary or emergency purposes and that such loan is in
conformance with the Investment Company Act of 1940 and the Fund's
prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified collateral
and the executed promissory note, if any, against delivery by the
lending bank of the total amount of the loan payable, provided that
the same conforms to the total amount payable as set forth in the
Certificate. The Custodian may, at the option of the lending bank,
keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver such
Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in
this paragraph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and the
Custodian shall receive from time to time such return of collateral
as may be tendered to it. In the event that the Fund fails to specify
in a Certificate the Series, the name of the issuer, the title and
number of shares or the principal amount of any particular Securities
to be delivered as collateral by the Custodian, to any such bank, the
Custodian shall not be under any obligation to deliver any
Securities.
- 30 -
ARTICLE XV
CONCERNING THE CUSTODIAN
1. The Custodian shall use reasonable care in the performance of
its duties hereunder, and, except as hereinafter provided, neither
the Custodian nor its nominee shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act
or otherwise, either hereunder or under any Margin Account Agreement,
except for any such loss or damage arising out of its own negligence,
bad faith, or willful misconduct or that of its officers, employees,
or agents. The Custodian may, with respect to questions of law
arising hereunder or under any Margin Account Agreement, apply for
and obtain the advice and opinion of counsel to the Fund, at the
expense of the Fund, or of its own counsel, at its own expense, and
shall be fully protected with respect to anything done or omitted by
it in good faith in conformity with such advice or opinion. The
Custodian shall be liable to the Fund for any loss or damage
resulting from the use of the Book-Entry System or any Depository
arising by reason of any negligence or willful misconduct on the part
of the Custodian or any of its employees or agents.
2. Notwithstanding the foregoing, the Custodian shall
be under no obligation to inquire into, and shall not be li-
able for:
(a) The validity (but not the authenticity) 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, as specified in a
Certificate, Oral Instructions, or Written Instructions;
(b) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid
therefor, as specified in a Certificate;
(c) The legality of the declaration or payment of
any dividend by the Fund, as specified in a resolution,
Certificate, Oral Instructions, or Written Instructions;
(d) The legality of any borrowing by the Fund using
Securities as collateral;
(e) The legality of any loan of portfolio Securities, nor
shall the Custodian be under any duty or obligation to see to it that
the 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
- 31 -
Fund is adequate collateral for the Fund against any loss it might
sustain as a result of such loan, except that this sub-paragraph shall
not excuse any liability the Custodian may have for failing to act
in accordance with Article X hereof or any Certificate, Oral
Instructions, or Written Instructions given in accordance with this
Agreement. The Custodian specifically, but not by way of limitation,
shall not be under any duty or obligation periodically to check or
notify the Fund that the amount of such cash collateral held by it for
the Fund is sufficient collateral for the Fund, but such duty or
obligation shall be the sole responsibility of the Fund. In addition,
the Custodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio Securities
of the Fund are lent pursuant to Article X of this Agreement makes
payment to it of any dividends or interest which are payable to or
for the account of the Fund during the period of such loan or at
the termination of such loan, provided, however, that the Custodian
shall promptly notify the Fund in the event that such dividends
or interest are not paid and received when due; or
(f) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Senior Security Account or
Collateral Account in connection with transactions by the Fund,
except that this sub-paragraph shall not excuse any liability the
Custodian may have for failing to establish, maintain, make deposits
to or withdrawals from such accounts in accordance with this
Agreement. 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 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. With respect to Securities held in a Depository, except as
otherwise provided in paragraph 5(b) of Article III hereof, the
Custodian shall have no responsibility and shall not be liable for
ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to such
Securities, unless the Custodian shall have actually received timely
notice from the
- 32 -
Depository in which such Securities are held. In no event shall
the Custodian have any responsibility or liability for the
failure of a Depository to collect, or for the late collection or
late crediting by a Depository of any amount payable upon Securities
deposited in a 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
a 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 a 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, or alternatively, the Fund shall be
subrogated to the rights of the Custodian with respect to such claim
against the Depository should it so request in a Certificate. This
paragraph shall not, however, excuse any failure by the Custodian to
act in accordance with a Certificate, Oral Instructions, or Written
Instructions given in accordance with this Agreement.
5. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to the Fund from
the Transfer Agent of the Fund nor to take any action to effect
payment or distribution by the Transfer Agent of the Fund of any
amount paid by the Custodian to the Transfer Agent of the Fund in
accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount if the Securities upon
which such amount is payable are in default, or if payment is refused
after the Custodian has timely and properly, in accordance with this
Agreement, made 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, but the Custodian
shall have such a duty if the Securities were not in default on the
payable date and the Custodian failed to timely and properly make
such demand for payment and such failure is the reason for the
non-receipt of payment.
7. The Custodian may appoint one or more banking institutions 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.
- 33 -
8. The Custodian agrees to indemnify the Fund against and save
the Fund harmless from all liability, claims, losses and demands
whatsoever, including attorney's fees, howsoever arising or incurred
because of the negligence, bad faith or willful misconduct of any
Sub-Custodian of the Securities and moneys owned by the Fund,
provided such Sub-Custodian is a banking institution located in a
foreign country and appointed by the Custodian pursuant to paragraph
7 of this Article.
9. The Custodian shall not be under any duty or obligation (a)
to ascertain whether any Securities at any time delivered to, or held
by it, 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.
10. The Custodian shall be entitled to receive and the Fund
agrees to pay to the Custodian all reasonable out-of-pocket expenses
and such compensation as may be agreed upon from time to time between
the Custodian and the Fund. The Custodian may charge such
compensation, and any such expenses with respect to a Series incurred
by the Custodian in the performance of its duties under this
Agreement against any money specifically allocated to such Series.
The Custodian shall also be entitled to charge against any money held
by it for the account of a Series 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 attributable to, or arising out of, its serving as
Custodian for such Series. 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. Notwithstanding the foregoing or anything else contained in
this Agreement to the contrary, the Custodian shall, prior to
effecting any charge for compensation, expenses, or any overdraft or
indebtedness or interest thereon, submit an invoice therefor to the
Fund.
11. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing, Oral
Instructions, or Written Instructions received by the Custodian and
reasonably believed by the Custodian to be genuine. The Fund agrees
to forward to the Custodian a Certificate or facsimile thereof
confirming Oral Instructions or Written 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,
- 34 -
or otherwise, by the close of business of the same day that
such Oral Instructions or Written 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 thereby authorized by the Fund. The Fund agrees that the
Custodian shall incur no liability to the Fund in acting upon Oral
Instructions or Written Instructions given to the Custodian hereunder
concerning such transactions provided such instructions reasonably
appear to have been received from an Authorized Person.
12. 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. This paragraph shall not excuse any failure by the
Custodian to have acted in accordance with any Margin Agreement it
has executed or any Certificate, Oral Instructions, or Written
Instructions given in accordance with this Agreement.
13. The books and records pertaining to the Fund, as
described in Appendix E hereto, which are in the possession of
the Custodian shall be the property of the Fund. Such books
and records shall be prepared and maintained by the Custodian 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.
14. 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, each 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.
- 35 -
15. The Custodian shall furnish upon request annually to the
Fund a letter prepared by the Custodian's accountants with respect to
the Custodian's internal systems and controls in the form generally
provided by the Custodian to other investment companies for which the
Custodian acts as custodian.
16. 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 out of, or
related to, the Custodian's performance of its obligations under this
Agreement, except for any such liability, claim, loss and demand
arising out of the Custodian's own negligence, bad faith, or willful
misconduct or that of its officers, employees, or agents.
17. Subject to the foregoing provisions of this Agreement, the
Custodian shall deliver and receive Securities, and receipts with
respect to such Securities, and shall make and receive payments only
in accordance with the customs prevailing from time to time among
brokers or dealers in such Securities and, except as may otherwise be
provided by this Agreement or as may be in accordance with such
customs, shall make payment for Securities only against delivery
thereof and deliveries of Securities only against payment therefor.
18. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
ARTICLE XVI
TERMINATION
1. Except as provided in paragraph 3 of this Article, this
Agreement shall continue until terminated by either the Custodian
giving to the Fund, or the Fund giving to the Custodian, a notice in
writing specifying the date of such termination, which date shall be
not less than 60 days after the date of the giving of such notice. In
the event such notice or a notice pursuant to paragraph 3 of this
Article is given by the Fund, it shall be accompanied by a copy of a
resolution of the Board of Trustees of the Fund, certified by an
Officer and the Secretary or an Assistant Secretary of the Fund,
electing to terminate this Agreement and designating a successor
custodian or custodians, each of which shall be eligible to serve as
a custodian for the securities of a management investment company
under the Investment Company Act of 1940. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination
date, deliver to the Custodian a copy of a resolution of the Board of
Trustees
- 36 -
of the Fund, certified by the Secretary, the Clerk, any Assistant
Secretary or any Assistant Clerk, designating a successor
custodian or custodians. In the absence of such designation by the
Fund, the Custodian may designate a successor custodian which shall
be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in
such notice this Agreement shall terminate, and the Custodian shall
upon receipt of a notice of acceptance by the successor custodian on
that date deliver directly to the successor custodian all Securities
and moneys then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or the
Custodian in accordance with the preceding paragraph, the Fund shall
upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities
(other than Securities held in the Book-Entry System which cannot be
delivered to the Fund) and moneys then owned by the Fund be deemed to
be its own custodian and the Custodian shall thereby be relieved of
all duties and responsibilities pursuant to this Agreement, other
than the duty with respect to Securities held in the Book Entry
System which cannot be delivered to the Fund to hold such Securities
hereunder in accordance with this Agreement.
3. Notwithstanding the foregoing, the Fund may terminate
this Agreement upon the date specified in a written notice
in the event of the "Bankruptcy" of The Bank of New York. As
used in this sub-paragraph, the term "Bankruptcy" shall mean The Bank
of New York's making a general assignment, arrangement or composition
with or for the benefit of its creditors, or instituting or having
instituted against it a proceeding seeking a judgment of insolvency
or bankruptcy or the entry of a order for relief under any applicable
bankruptcy law or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or if a
petition is presented for the winding up or liquidation of the party
or a resolution is passed for its winding up or liquidation, or it
seeks, or becomes subject to, the appointment of an administrator,
receiver, trustee, custodian or other similar official for it or for
all or substantially all of its assets or its taking any action in
furtherance or, or indicating its consent to approval of, or
acquiescence in, any of the foregoing.
- 37 -
ARTICLE XVII
TERMINAL LINK
1. At no time and under no circumstances shall the Fund be
obligated to have or utilize the Terminal Link, and the provisions of
this Article shall apply if, but only if, the Fund in its sole and
absolute discretion elects to utilize the Terminal Link to transmit
Certificates to and to receive notices from the Custodian.
2. The parties hereto shall utilize the Terminal Link only for
the purpose of the Fund providing Certificates to the Custodian and
the Custodian providing notices to the Fund and only after the Fund
and the Custodian shall have established access codes and internal
safekeeping procedures to safeguard and protect the confidentiality
and availability of such access codes. Each use of the Terminal Link
by the Fund shall constitute a representation and warranty that at
least two such access codes have been utilized and that such
procedures have been established.
3. Each party 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 other party shall not be responsible for the
reliability or availability of any such equipment or services, except
that the Custodian shall not pay any communications costs of any line
leased by the Fund, even if such line is also used by the Custodian.
4. The Fund acknowledges that any data bases made available as
part of, or through the Terminal 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 shall, and shall cause others to which it 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, each Fund
shall return to the Custodian any and all copies of the Information
which are in the Fund's possession or under its control, or which the
Fund 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.
- 38 -
6. The Custodian reserves the right to modify the Terminal Link
from time to time without notice to the Fund, except that the
Custodian shall give the Fund notice not less than 75 days in advance
of any modification which would materially adversely affect the
Fund's operation, and the Fund agrees not to modify or attempt to
modify the Terminal Link without the Bank's prior written consent.
The Fund acknowledges that the Terminal Link is the property of the
Custodian and, accordingly, the Fund agrees that any modifications to
the Terminal Link, whether by the Fund or 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 suppliers 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. Each party will, and will cause its officers and employees
to, treat the user and authorization codes, passwords and
authentication keys applicable to Terminal Link with extreme care.
Each party hereby irrevocably authorizes the other to act in
accordance with and rely on Certificates and notices received by it
through the Terminal Link. Each party acknowledges that it is its
responsibility to assure that only its authorized persons use the
Terminal Link on its behalf, and that a party shall not be
responsible nor liable for use of the Terminal Link on its behalf of
the other party by unauthorized persons except that the other party
shall be liable for such use thereof by unauthorized persons who have
obtained access thereto as a result of the bad faith or willful
misconduct of such party or any of its officers or employees.
9. Notwithstanding anything else in this Agreement to the
contrary, neither party shall have any liability to the other for any
losses, damages, injuries, claims, costs or expenses arising as a
result of a delay, omission or error in the transmission of a
Certificate or notice by use of the Terminal Link except for money
damages for those suffered as the result of the negligence, bad faith
or willfull misconduct of such party or its officers, employees or
agents in an amount not exceeding for any incident $100,000,
provided, however, that a party shall have no liability under this
Section 9 if the other party fails to comply with the provisions of
Section 11.
10. Without limiting the generality of the foregoing, it is
hereby agreed that in no event shall either party or any manufacturer
or supplier of its computer equipment, software or services relating
to the Terminal Link be responsible for
- 39 -
any special, indirect, incidental or consequential damages which the
other party may incur or experience by reason of its use of the
Terminal Link even if such party, manufacturer or supplier has been
advised of the possibility of such damages, nor with respect to the
use of the Terminal Link shall either party or any such manufacturer or
supplier be liable for acts of God, or with respect to the following
to the extent beyond such person's reasonable control: machine or
computer breakdown or malfunction, interruption or malfunction of
communication facilities, labor difficulties or any other similar or
dissimilar cause.
11. The Fund shall 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 earliest of (i) discovery thereof, (ii) the business day on which
discovery should have occurred through the exercise of reasonable
care and (iii) in the case of any error, the date of actual receipt
of the earliest notice which reflects such error, it being agreed
that discovery and receipt of notice may only occur on a business
day. The Custodian shall promptly advise the Fund whenever the
Custodian learns of any errors, omissions or interruption in, or
delay or unavailability of, the Terminal Link.
12. Each party shall, as soon as practicable after its receipt
of a Certificate or of any notice transmitted by the Terminal Link,
verify to the other party by use of the Terminal Link its receipt of
such Certificate or notice, and in the absence of such verification a
party to whom a Certificate or notice is sent shall not be liable for
any failure to act in accordance with such Certificate or notice, and
the sending party may not claim that such Certificate or notice was
received by the other.
ARTICLE XVIII
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 Authorized Persons. The Fund
agrees to furnish to the Custodian a new Certificate in similar form
in the event that any such present Authorized Person ceases to be an
Authorized Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new Certificate shall be
received, the Custodian shall be entitled to rely and to act upon
Oral Instructions, Written Instructions, or signatures of the present
Authorized Persons as set forth in the last delivered Certificate to
the extent provided by this Agreement.
- 40 -
2. Annexed hereto as Appendix B is a Certificate signed by two
of the present Officers of the Fund under its seal, setting forth the
names and the signatures of the present Officers of the Fund. The
Fund agrees to furnish to the Custodian a new Certificate in similar
form in the event any such present Officer ceases to be an Officer of
the Fund, or in the event that other or additional Officers are
elected or appointed. Until such new Certificate shall be received,
the Custodian shall be entitled to rely and to act upon the
signatures of the Officers as set forth in the last delivered
Certificate to the extent provided by this Agreement.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, other than
any Certificate or Written Instructions, 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.
4. 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.
5. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with the same
formality as this Agreement and approved by a resolution of the Board
of Trustees of the Fund, except that Appendices A and B may be
amended unilaterally by the Fund without such an approving
resolution.
6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the
Fund without the written consent of the Custodian, or by the
Custodian or The Bank of New York without the written consent of the
Fund, authorized or approved by a resolution of the Fund's Board of
Trustees. For purposes of this paragraph, no merger, consolidation,
or amalgamation of the Custodian, The Bank of New York, or the Fund
shall be deemed to constitute an assignment of this Agreement.
7. 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.
- 41 -
8. 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.
9. A copy of the Declaration of Trust of the Fund is on file
with the Secretary of The Commonwealth of Massachusetts, and notice
is hereby given that this instrument is executed on behalf of the
Board of Trustees of the Fund as Trustees and not individually and
that the obligations of this instrument are not binding upon any of
the Trustees or shareholders individually but are binding only upon
the assets and property of the Fund; provided, however, that the
Declaration of Trust of the Fund provides that the assets of a
particular Series of the Fund shall under no circumstances be charged
with liabilities attributable to any other Series of the Fund and
that all persons extending credit to, or contracting with or having
any claim against a particular Series of the Fund shall look only to
the assets of that particular Series for payment of such credit,
contract or claim.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto duly
authorized and their respective seals to be hereunto affixed, as of
the day and year first above written.
XXXX XXXXXX MULTI-STATE
MUNICIPAL SERIES TRUST
[SEAL] By:_______________________
Attest:
-----------------------
THE BANK OF NEW YORK
[SEAL] By:_______________________
Attest:
-----------------------
- 43 -
APPENDIX A
I, , President and I,
of ,
a Massachusetts business trust (the "Fund"), do hereby certify that:
The following individuals have been duly authorized by the Board
of Trustees of the Fund in conformity with the Fund's Declaration of
Trust and By-Laws to give Oral Instructions and Written Instructions
on behalf of the Fund, except that those persons designated as being
an "Officer of DWTC" shall be an Authorized Person only for purposes
of Articles XII and XIII. The signatures set forth opposite their
respective names are their true and correct signatures:
Name Position Signature
----------------- ---------------- -----------------
APPENDIX B
I, , President and I,
of , a
Massachusetts business trust (the "Fund"), do hereby certify that:
The following individuals for whom a position other than
"Officer of DWTC" is specified serve in the following positions with
the Fund and each has been duly elected or appointed by the Board of
Trustees of the Fund to each such position and qualified therefor in
conformity with the Fund's Declaration of Trust and By-Laws. With
respect to the following individuals for whom a position of "Officer
of DWTC" is specified, each such individual has been designated by a
resolution of the Board of Trustees of the Fund to be an Officer for
purposes of the Fund's Custody Agreement with The Bank of New York,
but only for purposes of Articles XII and XIII thereof and a
certified copy of such resolution is attached hereto. The signatures
of each individual below set forth opposite their respective names
are their true and correct signatures:
Name Position Signature
-------------------- ------------------- -----------------
APPENDIX C
The undersigned, hereby
certifies that he or she is the duly elected and acting
of (the "Fund"), further certifies that the
following resolutions were adopted by the Board of Trustees of the
Fund at a meeting duly held on , 199 , at which a quorum at all
times present and that such resolutions have not been modified or rescinded
and are in full force an effect as of the date hereof.
RESOLVED, that The Bank New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as
of , 199 (the "Custody Agreement") is authorized and instructed on a
continuous and ongoing basis to act in accordance with, and to rely
on instructions by the Fund to the Custodian communicated by a
Terminal Link as defined in the Custody Agreement.
RESOLVED, that the Fund shall establish access codes and grant
use of such access codes only to officers of the Fund as defined in
the Custody Agreement, and shall establish internal safekeeping
procedures to safeguard and protect the confidentiality and
availability of such access codes.
RESOLVED, that Officers of the Fund as defined in the Custody
Agreement shall, following the establishment of such access codes and
such internal safekeeping procedures, advise the Custodian that the
same have been established by delivering a Certificate, as defined in
the Custody Agreement, and the Custodian shall be entitled to rely
upon such advice.
IN WITNESS WHEREOF, I hereunto set my hand in the seal of
, as of the day of , 1991.
APPENDIX D
I, Xxxxxxx X. Xxxxx, an Assistant Vice President with THE BANK OF
NEW YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
APPENDIX E
The following books and records pertaining to Fund shall be
prepared and maintained by the Custodian and shall be the property of
the Fund:
EXHIBIT A
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of , a Massachusetts business
trust (the "Fund"), andfurther certifies that the following resolution was
adopted by theBoard of Trustees of the Fund at a meeting duly held on
, 1991, at which a quorum was at all times present and that
such resolution has not been modified or rescinded and is in full force and
effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant
to a Custody Agreement between The Bank of New York and the Fund
dated as of , 1991, (the "Custody Agreement") is
authorized and instructed on a continuous and ongoing basis to
deposit in the Book-Entry System, as defined in the Custody Agreement,
all securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated, and to
utilize the Book-Entry System to the extent possible in
connection with its performance thereunder, including, without
limitation, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries and
returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
, as of the day of , 1991.
---------------------------
[SEAL]
EXHIBIT B
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of , a Massachusetts business Trust (the "Fund"), and
further certifies that the following resolution was adopted by the
Board of Trustees of the Fund at a meeting duly held on , 1991, at
which a quorum was at all times present and that such resolution has
not been modified or rescinded and is in full force and effect as of
the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant
to a Custody Agreement between The Bank of New York and the Fund
dated as of , 1991, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as
it receives a Certificate, as defined in the Custody Agreement,
to the contrary to deposit in The Depository Trust Company
("DTC"), as a "Depository" as defined in the Custody Agreement,
all securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated, and to
utilize DTC to the extent possible in connection with its
performance thereunder, including, without limitation, in
connection with settlements of purchases and sales of
securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
, as of the day of , 1991.
--------------------------------
[SEAL]
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of , a Massachusetts business Trust (the "Fund"), and
further certifies that the following resolution was adopted by the
Board of Trustees of the Fund at a meeting duly held on , 1991, at
which a quorum was at all times present and that such resolution has
not been modified or rescinded and is in full force and effect as of
the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant
to a Custody Agreement between The Bank of New York and the Fund
dated as of , 1991 (the "Custody Agreement") is authorized
and instructed on a continuous and ongoing basis until such time as
it receives a Certificate, as defined in the Custody Agreement,
to the contrary to deposit in the Participants Trust Company as
a Depository, as defined in the Custody Agreement, all
securities eligible for deposit therein, regardless of the
Series to which the same are specifically allocated, and to
utilize the Participants Trust Company to the extent possible in
connection with its performance thereunder, including, without
limitation, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries and
returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of , as of the day of , 1991.
[SEAL]
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies that he or she is the
duly elected and acting of , a Massachusetts
business trust (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Trustees of the Fund at a
meeting duly held on , 1991, at which a quorum was
at all times present and that such resolution has not been modified
or rescinded and is in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the Fund dated as
of , 1991, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as
it receives a Certificate, as defined in the Custody Agreement,
to the contrary, to accept, utilize and act with respect to
Clearing Member confirmations for Options and transaction in
Options, regardless of the Series to which the same are
specifically allocated, as such terms are defined in the Custody
Agreement, as provided in the Custody Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of
, as of the day of , 1991.
[SEAL]
