Exhibit 99.(j)
CUSTODY AGREEMENT
AGREEMENT, dated as of ________________, 2003 between *, a business trust
organized and existing under the laws of the State of ** having its principal
office and place of business at *** (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 Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("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 Custodian agree as follows:
c.
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
a. "AUTHORIZED PERSON" shall be any person, whether or not
an officer or employee of the Fund, duly authorized by
the Fund's board to execute any Certificate or to give
any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a
Certificate annexed hereto as Schedule I hereto or such
other Certificate as may be received by Custodian from
time to time.
b. "BNY AFFILIATE" shall mean any office, branch or
subsidiary of The Bank of New York Company, Inc.
c. "BOOK-ENTRY SYSTEM" shall mean the Federal
Reserve/Treasury book-entry system for receiving and
delivering securities, its successors and nominees.
d. "BUSINESS DAY" shall mean any day on which Custodian
and relevant Depositories are open for business.
e. "CERTIFICATE" shall mean any notice, instruction, or
other instrument in writing, authorized or required by
this Agreement to be given to Custodian, which is
actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an
Authorized Person or a person reasonably believed by
Custodian to be an Authorized Person.
f. "COMPOSITE CURRENCY UNIT" shall mean the Euro or any
other composite currency unit consisting of the
aggregate of
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specified amounts of specified currencies, as such unit
may be constituted from time to time.
g. "DEPOSITORY" shall include (a) the Book-Entry System,
(b) the Depository Trust Company, (c) any other
clearing agency or securities depository registered
with the Securities and Exchange Commission identified
to the Fund from time to time, and (d) the respective
successors and nominees of the foregoing.
h. "FOREIGN DEPOSITORY" shall mean (a) Euroclear, (b)
Clearstream Banking, societe anonyme, (c) each Eligible
Securities Depository as defined in Rule 17f-7 under
the Investment Company Act of 1940, as amended,
identified to the Fund from time to time, and (d) the
respective successors and nominees of the foregoing.
i. "INSTRUCTIONS" shall mean communications transmitted by
electronic or telecommunications media, including
S.W.I.F.T., computer-to-computer interface, or
dedicated transmission lines.
j. "ORAL INSTRUCTIONS" shall mean verbal instructions
received by Custodian from an Authorized Person or from
a person reasonably believed by Custodian to be an
Authorized Person.
k. "SERIES" shall mean the various portfolios, if any, of
the Fund listed on Schedule II hereto, and if none are
listed references to Series shall be references to the
Fund.
l. "SECURITIES" shall include, without limitation, any
common stock and other equity securities, bonds,
debentures and other debt securities, notes, mortgages
or other obligations, and any instruments representing
rights to receive, purchase, or subscribe for the same,
or representing any other rights or interests therein
(whether represented by a certificate or held in a
Depository or by a Subcustodian).
m. "SUBCUSTODIAN" shall mean a bank (including any branch
thereof) or other financial institution (other than a
Foreign Depository) located outside the U.S. which is
utilized by Custodian in connection with the purchase,
sale or custody of Securities hereunder and identified
to the Fund from time to time, and their respective
successors and nominees.
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d.
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
a. (a) The Fund hereby appoints Custodian as custodian of
all Securities and cash at any time delivered to
Custodian during the term of this Agreement, and
authorizes Custodian to hold Securities in registered
form in its name or the name of its nominees. Custodian
hereby accepts such appointment and agrees to establish
and maintain one or more securities accounts and cash
accounts for each Series in which Custodian will hold
Securities and cash as provided herein. Custodian shall
maintain books and records segregating the assets of
each Series from the assets of any other Series. Such
accounts (each, an "Account"; collectively, the
"Accounts") shall be in the name of the Fund.
i. Custodian may from time to time establish
on its books and records such sub-accounts
within each Account as the Fund and
Custodian may agree upon (each a "Special
Account"), and Custodian shall reflect
therein such assets as the Fund may specify
in a Certificate or Instructions.
ii. Custodian may from time to time establish
pursuant to a written agreement with and
for the benefit of a broker, dealer, future
commission merchant or other third party
identified in a Certificate or Instructions
such accounts on such terms and conditions
as the Fund and Custodian shall agree, and
Custodian shall transfer to such account
such Securities and money as the Fund may
specify in a Certificate or Instructions.
b. The Fund hereby represents and warrants, which
representations and warranties shall be continuing and
shall be deemed to be reaffirmed upon each delivery of
a Certificate or each giving of Oral Instructions or
Instructions by the Fund, that:
1. It is duly organized and existing
under the laws of the jurisdiction
of its organization, with full power
to carry on its business as now
conducted, to enter into this
Agreement, and to perform its
obligations hereunder;
2. This Agreement has been duly
authorized, executed and delivered
by the Fund, approved
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by a resolution of its board,
constitutes a valid and legally
binding obligation of the Fund,
enforceable in accordance with its
terms, and there is no statute,
regulation, rule, order or judgment
binding on it, and no provision of
its charter or by-laws, nor of any
mortgage, indenture, credit
agreement or other contract binding
on it or affecting its property,
which would prohibit its execution
or performance of this Agreement;
ii. It is conducting its business in
substantial compliance with all applicable
laws and requirements, both state and
federal, and has obtained all regulatory
licenses, approvals and consents necessary
to carry on its business as now conducted;
iii. It will not use the services provided by
Custodian hereunder in any manner that is,
or will result in, a violation of any law,
rule or regulation applicable to the Fund;
iv. Its board or its foreign custody manager,
as defined in Rule 17f-5 under the
Investment Company Act of 1940, as amended
(the "'40 Act"), has determined that use of
each Subcustodian (including any
Replacement Custodian) and each Depository
which Custodian or any Subcustodian is
authorized to utilize in accordance with
Section 1(a) of Article III hereof,
satisfies the applicable requirements of
the '40 Act and Rules 17f-4 or 17f-5
thereunder, as the case may be;
v. The Fund or its investment adviser has
determined that the custody arrangements of
each Foreign Depository provide reasonable
safeguards against the custody risks
associated with maintaining assets with
such Foreign Depository within the meaning
of Rule 17f-7 under the '40 Act;
vi. It is fully informed of the protections and
risks associated with various methods of
transmitting Instructions and Oral
Instructions and delivering Certificates to
Custodian, understands that there may be
more secure methods of transmitting or
delivering the same than the methods
selected by the Fund, agrees that the
security procedures (if any) to be utilized
provide a commercially reasonable degree of
protection in light
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of its particular needs and circumstances,
and acknowledges and agrees that
Instructions need not be reviewed by
Custodian, may conclusively be presumed by
Custodian to have been given by person(s)
duly authorized, and may be acted upon as
given;
vii. It shall manage its borrowings, including,
without limitation, any advance or
overdraft (including any day-light
overdraft) in the Accounts, so that the
aggregate of its total borrowings for each
Series does not exceed the amount such
Series is permitted to borrow under the '40
Act;
viii. Its transmission or giving of, and
Custodian acting upon and in reliance on,
Certificates, Instructions, or Oral
Instructions pursuant to this Agreement
shall at all times comply with the '40 Act;
ix. It shall impose and maintain restrictions
on the destinations to which cash may be
disbursed by Instructions to ensure that
each disbursement is for a proper purpose;
and
x. It has the right to make the pledge and
grant the security interest and security
entitlement to Custodian contained in
Section 1 of Article V hereof, free of any
right of redemption or prior claim of any
other person or entity, such pledge and
such grants shall have a first priority
subject to no setoffs, counterclaims, or
other liens or grants prior to or on a
parity therewith, and it shall take such
additional steps as Custodian may require
to assure such priority.
c. The Fund hereby covenants that it shall from time to
time complete and execute and deliver to Custodian upon
Custodian's request a Form FR U-1 (or successor form)
whenever the Fund borrows from Custodian any money to
be used for the purchase or carrying of margin stock as
defined in Federal Reserve Regulation U.
e.
CUSTODY AND RELATED SERVICES
a. (a) Subject to the terms hereof, the Fund hereby
authorizes Custodian to hold any Securities received by
it from time to time for the Fund's account. Custodian
shall be entitled to utilize Depositories,
Subcustodians, and, subject to
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subsection(c) of this Xxxxxxx 0, Xxxxxxx Xxxxxxxxxxxx,
to the extent possible in connection with its
performance hereunder. Securities and cash held in a
Depository or Foreign Depository will be held subject
to the rules, terms and conditions of such entity.
Securities and cash held through Subcustodians shall be
held subject to the terms and conditions of Custodian's
agreements with such Subcustodians. Subcustodians may
be authorized to hold Securities in Foreign
Depositories in which such Subcustodians participate.
Unless otherwise required by local law or practice or a
particular subcustodian agreement, Securities deposited
with a Subcustodian, a Depositary or a Foreign
Depository will be held in a commingled account, in the
name of Custodian, holding only Securities held by
Custodian as custodian for its customers. Custodian
shall identify on its books and records the Securities
and cash belonging to the Fund, whether held directly
or indirectly through Depositories, Foreign
Depositories, or Subcustodians. Custodian shall,
directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the
extent feasible, to hold Securities in the country or
other jurisdiction in which the principal trading
market for such Securities is located, where such
Securities are to be presented for cancellation and/or
payment and/or registration, or where such Securities
are acquired. Custodian at any time may cease utilizing
any Subcustodian and/or may replace a Subcustodian with
a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a
Replacement Subcustodian, Custodian shall not utilize
such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that
utilization of such Replacement Subcustodian satisfies
the requirements of the '40 Act and Rule 17f-5
thereunder.
i. Unless Custodian has received a Certificate
or Instructions to the contrary, Custodian
shall hold Securities indirectly through a
Subcustodian only if (i) the Securities are
not subject to any right, charge, security
interest, lien or claim of any kind in
favor of such Subcustodian or its creditors
or operators, including a receiver or
trustee in bankruptcy or similar authority,
except for a claim of payment for the safe
custody or administration of Securities on
behalf of the Fund by such Subcustodian,
and (ii) beneficial ownership of the
Securities is freely transferable without
the payment of money or value other than
for safe custody or administration.
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ii. With respect to each Foreign Depository,
Custodian shall exercise reasonable care,
prudence, and diligence (i) to provide the
Fund with an analysis of the custody risks
associated with maintaining assets with the
Foreign Depository, and (ii) to monitor
such custody risks on a continuing basis
and promptly notify the Fund of any
material change in such risks. The Fund
acknowledges and agrees that such analysis
and monitoring shall be made on the basis
of, and limited by, information gathered
from Subcustodians or through publicly
available information otherwise obtained by
Custodian, and shall not include any
evaluation of Country Risks. As used herein
the term "Country Risks" shall mean with
respect to any Foreign Depository: (a) the
financial infrastructure of the country in
which it is organized, (b) such country's
prevailing custody and settlement
practices, (c) nationalization,
expropriation or other governmental
actions, (d) such country's regulation of
the banking or securities industry, (e)
currency controls, restrictions,
devaluations or fluctuations, and (f)
market conditions which affect the order
execution of securities transactions or
affect the value of securities.
b. Custodian shall furnish the Fund with an advice of
daily transactions (including a confirmation of each
transfer of Securities) and a monthly summary of all
transfers to or from the Accounts.
c. With respect to all Securities held hereunder,
Custodian shall, unless otherwise instructed to the
contrary:
1. Receive all income and other
payments and advise the Fund as
promptly as practicable of any such
amounts due but not paid;
2. Present for payment and receive the
amount paid upon all Securities
which may mature and advise the Fund
as promptly as practicable of any
such amounts due but not paid;
3. Forward to the Fund copies of all
information or documents that it may
actually receive from an issuer of
Securities which, in the opinion of
Custodian, are intended for the
beneficial owner of Securities;
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4. Execute, as custodian, any
certificates of ownership,
affidavits, declarations or other
certificates under any tax laws now
or hereafter in effect in connection
with the collection of bond and note
coupons;
5. Hold directly or through a
Depository, a Foreign Depository, or
a Subcustodian all rights and
similar Securities issued with
respect to any Securities credited
to an Account hereunder; and
6. Endorse for collection checks,
drafts or other negotiable
instruments.
d. (a) Custodian shall notify the Fund of rights or
discretionary actions with respect to Securities held
hereunder, and of the date or dates by when such rights
must be exercised or such action must be taken,
provided that Custodian has actually received, from the
issuer or the relevant Depository (with respect to
Securities issued in the United States) or from the
relevant Subcustodian, Foreign Depository, or a
nationally or internationally recognized bond or
corporate action service to which Custodian subscribes,
timely notice of such rights or discretionary corporate
action or of the date or dates such rights must be
exercised or such action must be taken. Absent actual
receipt of such notice, Custodian shall have no
liability for failing to so notify the Fund.
i. Whenever Securities (including, but not
limited to, warrants, options, tenders,
options to tender or non-mandatory puts or
calls) confer discretionary rights on the
Fund or provide for discretionary action or
alternative courses of action by the Fund,
the Fund shall be responsible for making
any decisions relating thereto and for
directing Custodian to act. In order for
Custodian to act, it must receive the
Fund's Certificate or Instructions at
Custodian's offices, addressed as Custodian
may from time to time request, not later
than noon (New York time) at least two (2)
Business Days prior to the last scheduled
date to act with respect to such Securities
(or such earlier date or time as Custodian
may specify to the Fund). Absent
Custodian's timely receipt of such
Certificate or Instructions, Custodian
shall not be liable for failure to take any
action relating to or to exercise any
rights conferred by such Securities.
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e. All voting rights with respect to Securities, however
registered, shall be exercised by the Fund or its
designee. For Securities issued in the United States,
Custodian's only duty shall be to mail to the Fund any
documents (including proxy statements, annual reports
and signed proxies) actually received by Custodian
relating to the exercise of such voting rights. With
respect to Securities issued outside of the United
States, Custodian's only duty shall be to provide the
Fund with access to a provider of global proxy services
at the Fund's request. The Fund shall be responsible
for all costs associated with its use of such services.
f. Custodian shall promptly advise the Fund upon
Custodian's actual receipt of notification of the
partial redemption, partial payment or other action
affecting less than all Securities of the relevant
class. If Custodian, any Subcustodian, any Depository,
or any Foreign Depository holds any Securities in which
the Fund has an interest as part of a fungible mass,
Custodian, such Subcustodian, Depository, or Foreign
Depository may select the Securities to participate in
such partial redemption, partial payment or other
action in any non-discriminatory manner that it
customarily uses to make such selection.
g. Custodian shall not under any circumstances accept
bearer interest coupons which have been stripped from
United States federal, state or local government or
agency securities unless explicitly agreed to by
Custodian in writing.
h. The Fund shall be liable for all taxes, assessments,
duties and other governmental charges, including any
interest or penalty with respect thereto ("Taxes"),
with respect to any cash or Securities held on behalf
of the Fund or any transaction related thereto. The
Fund shall indemnify Custodian and each Subcustodian
for the amount of any Tax that Custodian, any such
Subcustodian or any other withholding agent is required
under applicable laws (whether by assessment or
otherwise) to pay on behalf of, or in respect of income
earned by or payments or distributions made to or for
the account of the Fund (including any payment of Tax
required by reason of an earlier failure to withhold).
Custodian shall, or shall instruct the applicable
Subcustodian or other withholding agent to, withhold
the amount of any Tax which is required to be withheld
under applicable law upon collection of any dividend,
interest or other distribution made with respect to any
Security and any proceeds or income from the sale, loan
or other transfer of any Security. In the event that
Custodian or any
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Subcustodian is required under applicable law to pay
any Tax on behalf of the Fund, Custodian is hereby
authorized to withdraw cash from any cash account in
the amount required to pay such Tax and to use such
cash, or to remit such cash to the appropriate
Subcustodian or other withholding agent, for the timely
payment of such Tax in the manner required by
applicable law. If the aggregate amount of cash in all
cash accounts is not sufficient to pay such Tax,
Custodian shall promptly notify the Fund of the
additional amount of cash (in the appropriate currency)
required, and the Fund shall directly deposit such
additional amount in the appropriate cash account
promptly after receipt of such notice, for use by
Custodian as specified herein. In the event that
Custodian reasonably believes that Fund is eligible,
pursuant to applicable law or to the provisions of any
tax treaty, for a reduced rate of, or exemption from,
any Tax which is otherwise required to be withheld or
paid on behalf of the Fund under any applicable law,
Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold
or pay such Tax at such reduced rate or refrain from
withholding or paying such Tax, as appropriate;
PROVIDED that Custodian shall have received from the
Fund all documentary evidence of residence or other
qualification for such reduced rate or exemption
required to be received under such applicable law or
treaty. In the event that Custodian reasonably believes
that a reduced rate of, or exemption from, any Tax is
obtainable only by means of an application for refund,
Custodian and the applicable Subcustodian shall have no
responsibility for the accuracy or validity of any
forms or documentation provided by the Fund to
Custodian hereunder. The Fund hereby agrees to
indemnify and hold harmless Custodian and each
Subcustodian in respect of any liability arising from
any underwithholding or underpayment of any Tax which
results from the inaccuracy or invalidity of any such
forms or other documentation, and such obligation to
indemnify shall be a continuing obligation of the Fund,
its successors and assigns notwithstanding the
termination of this Agreement.
i. (a) For the purpose of settling Securities and foreign
exchange transactions, the Fund shall provide Custodian
with sufficient immediately available funds for all
transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient
immediately available funds" shall mean either (i)
sufficient cash denominated in U.S. dollars to purchase
the necessary foreign currency, or (ii) sufficient
applicable foreign currency, to settle the transaction.
Custodian shall provide the Fund with immediately
available
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funds each day which result from the actual settlement
of all sale transactions, based upon advices received
by Custodian from Subcustodians, Depositories, and
Foreign Depositories. Such funds shall be in U.S.
dollars or such other currency as the Fund may specify
to Custodian.
i. Any foreign exchange transaction effected
by Custodian in connection with this
Agreement may be entered with Custodian or
a BNY Affiliate acting as principal or
otherwise through customary banking
channels. The Fund may issue a standing
Certificate or Instructions with respect to
foreign exchange transactions, but
Custodian may establish rules or
limitations concerning any foreign exchange
facility made available to the Fund. The
Fund shall bear all risks of investing in
Securities or holding cash denominated in a
foreign currency.
ii. To the extent that Custodian has agreed to
provide pricing or other information
services in connection with this Agreement,
Custodian is authorized to utilize any
vendor (including brokers and dealers of
Securities) reasonably believed by
Custodian to be reliable to provide such
information. The Fund understands that
certain pricing information with respect to
complex financial instruments (E.G.,
derivatives) may be based on calculated
amounts rather than actual market
transactions and may not reflect actual
market values, and that the variance
between such calculated amounts and actual
market values may or may not be material.
Where vendors do not provide information
for particular Securities or other
property, an Authorized Person may advise
Custodian in a Certificate regarding the
fair market value of, or provide other
information with respect to, such
Securities or property as determined by it
in good faith. Custodian shall not be
liable for any loss, damage or expense
incurred as a result of errors or omissions
with respect to any pricing or other
information utilized by Custodian
hereunder.
j. Custodian shall promptly send to the Fund (a) any
reports it receives from a Depository on such
Depository's system of internal accounting control, and
(b) such reports on its own system of internal
accounting control as the Fund may reasonably request
from time to time.
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1. Until such time as Custodian receives a certificate to the contrary with
respect to a particular Security, Custodian may release the identity of the Fund
to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and shareholder.
f.
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
a. Promptly after each purchase or sale of Securities by
the Fund, the Fund shall deliver to Custodian a
Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be
settled on the same day the purchase or sale is made,
Oral Instructions specifying all information Custodian
may reasonably request to settle such purchase or sale.
Custodian shall account for all purchases and sales of
Securities on the actual settlement date unless
otherwise agreed by Custodian.
b. The Fund understands that when Custodian is instructed
to deliver Securities against payment, delivery of such
Securities and receipt of payment therefor may not be
completed simultaneously. Notwithstanding any provision
in this Agreement to the contrary, settlements,
payments and deliveries of Securities may be effected
by Custodian or any Subcustodian in accordance with the
customary or established securities trading or
securities processing practices and procedures in the
jurisdiction in which the transaction occurs,
including, without limitation, delivery to a purchaser
or dealer therefor (or agent) against receipt with the
expectation of receiving later payment for such
Securities. The Fund assumes full responsibility for
all risks, including, without limitation, credit risks,
involved in connection with such deliveries of
Securities.
c. Custodian may, as a matter of bookkeeping convenience
or by separate agreement with the Fund, credit the
Account with the proceeds from the sale, redemption or
other disposition of Securities or interest, dividends
or other distributions payable on Securities prior to
its actual receipt of final payment therefor. All such
credits shall be conditional until Custodian's actual
receipt of final payment and may be reversed by
Custodian to the extent that final payment is not
received. Payment with respect to a transaction will
not be "final" until Custodian shall have received
immediately available funds which under applicable
local law, rule and/or practice are irreversible and
not subject to any security interest, levy or
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other encumbrance, and which are specifically
applicable to such transaction.
g.
OVERDRAFTS OR INDEBTEDNESS
a. If Custodian should in its sole discretion advance
funds on behalf of any Series which results in an
overdraft (including, without limitation, any day-light
overdraft) because the money held by Custodian in an
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, Instructions or Oral Instructions, or if
an overdraft arises in the separate account of a Series
for some other reason, including, without limitation,
because of a reversal of a conditional credit or the
purchase of any currency, or if the Fund is for any
other reason indebted to Custodian with respect to a
Series, including any indebtedness to The Bank of New
York under the Fund's Cash Management and Related
Services Agreement (except a borrowing for investment
or for temporary or emergency purposes using Securities
as collateral pursuant to a separate agreement and
subject to the provisions of Section 2 of this
Article), such overdraft or indebtedness shall be
deemed to be a loan made by Custodian to the Fund for
such Series payable on demand and shall bear interest
from the date incurred at a rate per annum ordinarily
charged by Custodian to its institutional customers, as
such rate may be adjusted from time to time. In
addition, the Fund hereby agrees that Custodian shall
to the maximum extent permitted by law have a
continuing lien, security interest, and security
entitlement in and to any property, including, without
limitation, any investment property or any financial
asset, of such Series at any time held by Custodian for
the benefit of such Series or in which such Series may
have an interest which is then in Custodian's
possession or control or in possession or control of
any third party acting in Custodian's behalf. The Fund
authorizes Custodian, in its sole discretion, at any
time to charge any such overdraft or indebtedness
together with interest due thereon against any balance
of account standing to such Series' credit on
Custodian's books.
b. If the Fund borrows money from any bank (including
Custodian if the borrowing is pursuant to a separate
agreement) for investment or for temporary or emergency
purposes using Securities held by Custodian hereunder
as collateral for such borrowings, the Fund shall
deliver to Custodian a Certificate specifying with
respect to each such borrowing: (a) the Series
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to which such borrowing relates; (b) the name of the
bank, (c) the amount of the borrowing, (d) the time and
date, if known, on which the loan is to be entered
into, (e) the total amount payable to the Fund on the
borrowing date, (f) the 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 (g)
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
'40 Act and the Fund's prospectus. Custodian shall
deliver on the borrowing date specified in a
Certificate the specified collateral against payment 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.
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. Custodian shall deliver such Securities as
additional collateral as may be specified in a
Certificate to collateralize further any transaction
described in this Section. The Fund shall cause all
Securities released from collateral status to be
returned directly to Custodian, and 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 Custodian, Custodian shall not be under
any obligation to deliver any Securities.
h.
SALE AND REDEMPTION OF SHARES
a. Whenever the Fund shall sell any shares issued by the
Fund ("Shares") it shall deliver to Custodian a
Certificate or Instructions specifying the amount of
money and/or Securities to be received by Custodian for
the sale of such Shares and specifically allocated to
an Account for such Series.
b. Upon receipt of such money, Custodian shall credit such
money to an Account in the name of the Series for which
such money was received.
c. Except as provided hereinafter, whenever the Fund
desires Custodian to make payment out of the money held
by Custodian hereunder in connection with a redemption
of any Shares, it shall furnish to Custodian (a) a
resolution of the
14
Fund's board directing the Fund's transfer agent to
redeem the Shares, and (b) a Certificate or
Instructions specifying the total amount to be paid for
such Shares. Custodian shall make payment of such total
amount to the transfer agent specified in such
Certificate or Instructions out of the money held in an
Account of the appropriate Series.
i.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
a. Whenever the Fund shall determine to pay a dividend or
distribution on Shares it shall furnish to Custodian
Instructions or a Certificate setting forth with
respect to the Series specified therein the date of the
declaration of such dividend or distribution, the total
amount payable, and the payment date.
b. Upon the payment date specified in such Instructions or
Certificate, Custodian shall pay out of the money held
for the account of such Series the total amount payable
to the dividend agent of the Fund specified therein.
j.
CONCERNING CUSTODIAN
a. (a) Except as otherwise expressly provided herein,
Custodian shall not be liable for any costs, expenses,
damages, liabilities or claims, including attorneys'
and accountants' fees (collectively, "Losses"),
incurred by or asserted against the Fund, except those
Losses arising out of Custodian's own negligence or
willful misconduct. Custodian shall have no liability
whatsoever for the action or inaction of any
Depositories, or, except to the extent such action or
inaction is a direct result of the Custodian's failure
to fulfill its duties hereunder, of any Foreign
Depositories. With respect to any Losses incurred by
the Fund as a result of the acts or any failures to act
by any Subcustodian (other than a BNY Affiliate),
Custodian shall take appropriate action to recover such
Losses from such Subcustodian; and Custodian's sole
responsibility and liability to the Fund shall be
limited to amounts so received from such Subcustodian
(exclusive of costs and expenses incurred by
Custodian). In no event shall Custodian be liable to
the Fund or any third party for special, indirect or
consequential damages, or lost profits or loss of
business, arising in connection with this Agreement,
nor shall BNY or any Subcustodian be liable: (i) for
acting in accordance with any Certificate or Oral
Instructions actually received by Custodian and
reasonably believed by Custodian to
15
be given by an Authorized Person; (ii) for acting in
accordance with Instructions without reviewing the
same; (iii) for conclusively presuming that all
Instructions are given only by person(s) duly
authorized; (iv) for conclusively presuming that all
disbursements of cash directed by the Fund, whether by
a Certificate, an Oral Instruction, or an Instruction,
are in accordance with Section 2(i) of Article II
hereof; (v) for holding property in any particular
country, including, but not limited to, Losses
resulting from nationalization, expropriation or other
governmental actions; regulation of the banking or
securities industry; exchange or currency controls or
restrictions, devaluations or fluctuations;
availability of cash or Securities or market conditions
which prevent the transfer of property or execution of
Securities transactions or affect the value of
property; (vi) for any Losses due to forces beyond the
control of Custodian, including without limitation
strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural
catastrophes or acts of God, or interruptions, loss or
malfunctions of utilities, communications or computer
(software and hardware) services; (vii) for the
insolvency of any Subcustodian (other than a BNY
Affiliate), any Depository, or, except to the extent
such action or inaction is a direct result of the
Custodian's failure to fulfill its duties hereunder,
any Foreign Depository; or (viii) for any Losses
arising from the applicability of any law or regulation
now or hereafter in effect, or from the occurrence of
any event, including, without limitation,
implementation or adoption of any rules or procedures
of a Foreign Depository, which may affect, limit,
prevent or impose costs or burdens on, the
transferability, convertibility, or availability of any
currency or Composite Currency Unit in any country or
on the transfer of any Securities, and in no event
shall Custodian be obligated to substitute another
currency for a currency (including a currency that is a
component of a Composite Currency Unit) whose
transferability, convertibility or availability has
been affected, limited, or prevented by such law,
regulation or event, and to the extent that any such
law, regulation or event imposes a cost or charge upon
Custodian in relation to the transferability,
convertibility, or availability of any cash currency or
Composite Currency Unit, such cost or charge shall be
for the account of the Fund, and Custodian may treat
any account denominated in an affected currency as a
group of separate accounts denominated in the relevant
component currencies.
i. Custodian may enter into subcontracts,
agreements and understandings with any BNY
Affiliate, whenever and on such terms and
conditions as it deems necessary or
16
appropriate to perform its services
hereunder. No such subcontract, agreement
or understanding shall discharge Custodian
from its obligations hereunder.
ii. The Fund agrees to indemnify Custodian and
hold Custodian harmless from and against
any and all Losses sustained or incurred by
or asserted against Custodian by reason of
or as a result of any action or inaction,
or arising out of Custodian's performance
hereunder, including reasonable fees and
expenses of counsel incurred by Custodian
in a successful defense of claims by the
Fund; provided however, that the Fund shall
not indemnify Custodian for those Losses
arising out of Custodian's own negligence
or willful misconduct. This indemnity shall
be a continuing obligation of the Fund, its
successors and assigns, notwithstanding the
termination of this Agreement.
b. Without limiting the generality of the foregoing,
Custodian shall be under no obligation to inquire into,
and shall not be liable for:
1. Any Losses incurred by the Fund or
any other person as a result of the
receipt or acceptance of fraudulent,
forged or invalid Securities, or
Securities which are otherwise not
freely transferable or deliverable
without encumbrance in any relevant
market;
2. The validity of the issue of any
Securities purchased, sold, or
written by or for the Fund, the
legality of the purchase, sale or
writing thereof, or the propriety of
the amount paid or received
therefor;
3. The legality of the sale or
redemption of any Shares, or the
propriety of the amount to be
received or paid therefor;
4. The legality of the declaration or
payment of any dividend or
distribution by the Fund;
5. The legality of any borrowing by the
Fund;
6. The legality of any loan of
portfolio Securities, nor shall
Custodian be under any duty or
obligation to see to it that any
cash or collateral delivered to it
by a broker, dealer or financial
17
institution or held by it at any
time as a result of such loan of
portfolio Securities is adequate
security for the Fund against any
loss it might sustain as a result of
such loan, which duty or obligation
shall be the sole responsibility of
the Fund. In addition, 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 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 Custodian
shall promptly notify the Fund in
the event that such dividends or
interest are not paid and received
when due;
7. The sufficiency or value of any
amounts of money and/or Securities
held in any Special Account in
connection with transactions by the
Fund; whether 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, or
whether any payment received by
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 Custodian's
receipt or non-receipt of any such
payment; or
8. Whether any Securities at any time
delivered to, or held by it or by
any Subcustodian, 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 and statement of
additional information, or to
ascertain whether any transactions
by the Fund, whether or not
involving Custodian, are such
transactions as may properly be
engaged in by the Fund.
c. Custodian may, with respect to questions of law
specifically regarding an Account, obtain the advice of
counsel and shall be
18
fully protected with respect to anything done or
omitted by it in good faith in conformity with such
advice.
d. Custodian shall be under no obligation to take action
to collect any amount payable on Securities in default,
or if payment is refused after due demand and
presentment.
e. Custodian shall have no duty or responsibility to
inquire into, make recommendations, supervise, or
determine the suitability of any transactions affecting
any Account.
f. The Fund shall pay to Custodian the fees and charges as
may be specifically agreed upon from time to time and
such other fees and charges at Custodian's standard
rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with
the conversion of the Fund's Securities hereunder and
the transfer of Securities and records kept in
connection with this Agreement. The Fund shall also
reimburse Custodian for out-of-pocket expenses which
are a normal incident of the services provided
hereunder.
g. Custodian has the right to debit any cash account for
any amount payable by the Fund in connection with any
and all obligations of the Fund to Custodian. In
addition to the rights of Custodian under applicable
law and other agreements, at any time when the Fund
shall not have honored any of its obligations to
Custodian, Custodian shall have the right without
notice to the Fund to retain or set-off, against such
obligations of the Fund, any Securities or cash
Custodian or a BNY Affiliate may directly or indirectly
hold for the account of the Fund, and any obligations
(whether matured or unmatured) that Custodian or a BNY
Affiliate may have to the Fund in any currency or
Composite Currency Unit. Any such asset of, or
obligation to, the Fund may be transferred to Custodian
and any BNY Affiliate in order to effect the above
rights.
h. The Fund agrees to forward to Custodian a Certificate
or Instructions confirming Oral Instructions by the
close of business of the same day that such Oral
Instructions are given to Custodian. The Fund agrees
that the fact that such confirming Certificate or
Instructions are not received or that a contrary
Certificate or contrary Instructions are received by
Custodian shall in no way affect the validity or
enforceability of transactions authorized by such Oral
Instructions and effected by Custodian. If the Fund
elects to transmit Instructions through an on-line
communications system offered
19
by Custodian, the Fund's use thereof shall be subject
to the Terms and Conditions attached as Appendix I
hereto, and Custodian shall provide user and
authorization codes, passwords and authentication keys
only to an Authorized Person or a person reasonably
believed by Custodian to be an Authorized Person.
i. The books and records pertaining to the Fund which are
in possession of Custodian shall be the property of the
Fund. Such books and records shall be prepared and
maintained as required by the '40 Act and the rules
thereunder. The Fund, or its authorized
representatives, shall have access to such books and
records during Custodian's normal business hours. Upon
the reasonable request of the Fund, copies of any such
books and records shall be provided by Custodian to the
Fund or its authorized representative. Upon the
reasonable request of the Fund, Custodian shall provide
in hard copy or on computer disc any records included
in any such delivery which are maintained by Custodian
on a computer disc, or are similarly maintained.
j. It is understood that Custodian is authorized to supply
any information regarding the Accounts which is
required by any law, regulation or rule now or
hereafter in effect. The Custodian shall provide the
Fund with any report obtained by the Custodian on the
system of internal accounting control of a Depository,
and with such reports on its own system of internal
accounting control as the Fund may reasonably request
from time to time.
k. 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 against
Custodian in connection with this Agreement.
k.
TERMINATION
a. Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in
writing specifying the date of such termination, which
shall be not less than ninety (90) days after the date
of giving of such notice. In the event such notice is
given by the Fund, it shall be accompanied by a copy of
a resolution of the board of the Fund, certified by the
Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor
custodian or custodians, each of which shall be a bank
or trust company
20
having not less than $2,000,000 aggregate capital,
surplus and undivided profits. In the event such notice
is given by Custodian, the Fund shall, on or before the
termination date, deliver to Custodian a copy of a
resolution of the board of the Fund, certified by the
Secretary or any Assistant Secretary, designating a
successor custodian or custodians. In the absence of
such designation by the Fund, 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 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 money 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.
b. If a successor custodian is not designated by the Fund
or Custodian in accordance with the preceding Section,
the Fund shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by
Custodian of all Securities (other than Securities
which cannot be delivered to the Fund) and money then
owned by the Fund be deemed to be its own custodian and
Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than
the duty with respect to Securities which cannot be
delivered to the Fund to hold such Securities hereunder
in accordance with this Agreement.
l.
MISCELLANEOUS
a. The Fund agrees to furnish to Custodian a new
Certificate of Authorized Persons in the event of any
change in the then present Authorized Persons. Until
such new Certificate is received, Custodian shall be
fully protected in acting upon Certificates or Oral
Instructions of such present Authorized Persons.
b. Any notice or other instrument in writing, authorized
or required by this Agreement to be given to Custodian,
shall be sufficiently given if addressed to Custodian
and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
Custodian may from time to time designate in writing.
21
c. 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 received by it at its offices at ***, or at such
other place as the Fund may from time to time designate
in writing.
d. Each and every right granted to either party hereunder
or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity,
shall be cumulative and may be exercised from time to
time. No failure on the part of either party to
exercise, and no delay in exercising, any right will
operate as a waiver thereof, nor will any single or
partial exercise by either party of any right preclude
any other or future exercise thereof or the exercise of
any other right.
e. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in
any exclusive jurisdiction, the validity, legality and
enforceability of the remaining provisions shall not in
any way be affected thereby. This Agreement may not be
amended or modified in any manner except by a written
agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only
by the Fund and any amendment to Appendix I hereto need
be signed only by Custodian. 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
either party without the written consent of the other.
f. This Agreement shall be construed in accordance with
the substantive laws of the State of New York, without
regard to conflicts of laws principles thereof. The
Fund and Custodian hereby consent to the jurisdiction
of a state or federal court situated in New York City,
New York in connection with any dispute arising
hereunder. The Fund hereby irrevocably waives, to the
fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the
laying of venue of any such proceeding brought in such
a court and any claim that such proceeding brought in
such a court has been brought in an inconvenient forum.
The Fund and Custodian each hereby irrevocably waives
any and all rights to trial by jury in any legal
proceeding arising out of or relating to this
Agreement.
g. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original,
22
but such counterparts shall, together, constitute only
one instrument.
23
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
*
By:
--------------------------------------
Title:
Tax Identification No:
THE BANK OF NEW YORK
By:
--------------------------------------
Title:
24
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(THE FUND - ORAL AND WRITTEN INSTRUCTIONS)
The undersigned hereby certifies that he/she is the duly elected and acting
________________________ of * (the "Fund"), and further certifies that the
following officers or employees of the Fund have been duly authorized in
conformity with the Fund's Declaration of Trust and By-Laws to deliver
Certificates and Oral Instructions to The Bank of New York ("Custodian")
pursuant to the Custody Agreement between the Fund and Custodian dated
_______________, and that the signatures appearing opposite their names are true
and correct:
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you may
currently have on file.
[seal] By:
---------------------------
Title:
Date:
SCHEDULE II
SERIES
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. LICENSE; USE. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person the Fund of software
enabling the Fund to obtain access to the System (the "Software"), Custodian
grants to the Fund a personal, nontransferable and nonexclusive license to use
the Software solely for the purpose of transmitting Written Instructions,
receiving reports, making inquiries or otherwise communicating with Custodian in
connection with the Account(s). The Fund shall use the Software solely for its
own internal and proper business purposes and not in the operation of a service
bureau. Except as set forth herein, no license or right of any kind is granted
to the Fund with respect to the Software. The Fund acknowledges that Custodian
and its suppliers retain and have title and exclusive proprietary rights to the
Software, including any trade secrets or other ideas, concepts, know-how,
methodologies, or information incorporated therein and the exclusive rights to
any copyrights, trademarks and patents (including registrations and applications
for registration of either), or other statutory or legal protections available
in respect thereof. The Fund further acknowledges that all or a part of the
Software may be copyrighted or trademarked (or a registration or claim made
therefor) by Custodian or its suppliers. The Fund shall not take any action with
respect to the Software inconsistent with the foregoing acknowledgments, nor
shall you attempt to decompile, reverse engineer or modify the Software. The
Fund may not copy, sell, lease or provide, directly or indirectly, any of the
Software or any portion thereof to any other person or entity without
Custodian's prior written consent. The Fund may not remove any statutory
copyright notice or other notice included in the Software or on any media
containing the Software. The Fund shall reproduce any such notice on any
reproduction of the Software and shall add any statutory copyright notice or
other notice to the Software or media upon Custodian's request.
2. EQUIPMENT. The Fund 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 Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. PROPRIETARY INFORMATION. The Software, any data base and any proprietary
data, processes, information and documentation made available to the Fund (other
than which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of Custodian or its suppliers. The Fund
shall keep the Information confidential by using the same care and discretion
that the Fund uses with respect to its own confidential property and trade
secrets, but not less than reasonable care. Upon
1
termination of the Agreement or the Software license granted herein for any
reason, the Fund shall return to Custodian any and all copies of the Information
which are in its possession or under its control.
4. MODIFICATIONS. Custodian reserves the right to modify the Software from
time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and whether
with or without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND
SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE,
SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE
PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY
DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY
INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF
CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE
OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF
COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR
CAUSE BEYOND THEIR REASONABLE CONTROL.
6. SECURITY; RELIANCE; UNAUTHORIZED USE. The Fund will cause all persons
utilizing the Software and System to treat all applicable user and authorization
codes, passwords and authentication keys with extreme care, and it will
establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Instructions received by it through the System. The Fund acknowledges that it is
its sole responsibility to assure that only persons duly authorized use the
System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. SYSTEM ACKNOWLEDGMENTS. Custodian shall acknowledge through the System
its receipt of each transmission communicated through the System, and in the
absence of such acknowledgment Custodian shall not be liable for any failure to
act in accordance with such transmission and the Fund may not claim that such
transmission was received by Custodian.
2
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may not be
available for every communication through the System, or for all data. The Fund
agrees that Custodian may deactivate any encryption features at any time,
without notice or liability to the Fund, for the purpose of maintaining,
repairing or troubleshooting the System or the Software.
3
