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EXHIBIT 10.16(e)
CUSTODY AGREEMENT
THIS AGREEMENT is made this 30th day of November, 1998 by and between [Name
of Fund]., a ________________ corporation (the "Fund"), and CHASE MANHATTAN
BANK, a New York State chartered bank and trust company ("Chase").
W I T N E S S E T H
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interest in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in Income Fund, Inc.,
(this fund together with all other series subsequently established by the Fund
and made subject to this Contract in accordance with paragraph 33, being herein
referred to as the "Fund(s)):
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints Chase to act as custodian of its
portfolio securities, cash and other property on the terms set forth in this
Agreement. Chase accepts such appointment and agrees to furnish the services
herein set forth in return for the compensation as provided in Section 23 of
this Agreement.
2. DELIVERY OF DOCUMENTS. The Fund has furnished Chase with copies properly
certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Directors authorizing the
appointment of Chase as Custodian of the portfolio securities, cash and other
property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and containing the
signatures of the Fund's officers and/or the persons authorized to sign Proper
Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Articles of Incorporation filed with the State of Minnesota
and all amendments thereto (such Articles of Incorporation as currently in
effect and from time to time, be amended, are herein called the "Articles");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws"),
(e) Resolutions of the Fund's Board of Directors appointing the investment
advisor of the Fund and resolutions of the Fund's Board of Directors and the
Fund's Shareholders approving the proposed Investment Advisory Agreement
between the Fund and the advisor (the "Advisory Agreement");
(f)The Advisory Agreement
(g) The Fund's Registration Statement on Form N-1A under the 1940 Act and
the Securities Act of 1933, as amended ("xxx 0000 Xxx") as filed with the SEC;
and
(h) The Fund's most recent prospectus and statement of additional
information including all amendments and supplements thereto (the
"Prospectus").
Upon request the Fund will furnish Chase with copies of all amendments of
or supplements to the foregoing, if any. The Fund will also furnish Chase upon
request with a copy of the opinion of counsel for
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the Fund with respect to the validity of the Shares and the status of such
Shares under the 1933 Act filed with the SEC, and any other applicable federal
law or regulation.
3. DEFINITIONS.
(a) "Authorized Person". As used in this Agreement, the term "Authorized
Person" means the Fund's President, Treasurer and any other person, whether or
not any such person is an officer or employee of the Fund, duly authorized by
the Board of Directors of the Fund to give Proper Instructions on behalf of the
Fund as set forth in resolutions of the Fund's Board of Directors.
(b). "Book-Entry System". As used in this Agreement, the term "Book-Entry
System" means a book-entry system authorized by the U.S. Department of
Treasury, its successor or successors and its nominee or nominees.
(c) "Proper Instructions". Proper Instructions as used herein means a
writing signed or initialled by two or more persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if Chase reasonably believes them to
have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all such oral instructions to
be confirmed in writing. Upon receipt of a certificate of the Secretary or an
Assistant Secretary as to the authorization by the Board of Directors of the
Fund accompanied by a detailed description of procedures approved by the Board
of Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and Chase are satisfied that such procedures afford adequate
safeguards for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by Chase pursuant to any
three-party agreement which requires a segregated asset account in accordance
with Section 9.
(d) "Property". The term "Property", as used in this Agreement, means:
(i) any and all securities and other property of the Fund which
the Fund may from time to time deposit, or cause to be
deposited, with Chase or which Chase may from time to time
hold for the Fund;
(ii) all income in respect of any such securities or other
property;
(iii) all proceeds of the sales of any of such securities or other
property; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by Chase from time to time from or on
behalf of the Fund.
(e) "Securities Depository". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee
or nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Company's Board of Directors approving deposits by Chase
therein.
4. DELIVERY AND REGISTRATION OF THE PROPERTY. The Fund will deliver or
cause to be delivered to Chase all securities and all moneys owned by it,
including payments of interest, principal and capital distributions and cash
received for the issuance of its Shares, at any time during the period of this
Agreement, except for securities and monies to be delivered to any subcustodian
appointed pursuant to Section 7 hereof. U.S. Trust will not be responsible for
such securities and such monies until actually
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received by it. All securities delivered to Chase or to any such subcustodian
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of the Fund or in the name of Chase or any nominee of
Chase (with or without indication of fiduciary status) or in the name of any
subcustodian or any nominee of such subcustodian appointed pursuant to
Paragraph 7 hereof or shall be properly endorsed and in form for transfer
satisfactory to Chase.
5. VOTING RIGHTS. With respect to all securities, however registered, it is
understood that the voting and other rights and powers shall be exercised by
the Fund. Chase's only duty shall be to mail for delivery on the next business
day to the Fund any documents received, including proxy statements and offering
circulars, with any proxies for securities registered in a nominee name
executed by such nominee. Where warrants, options, tenders or other securities
have fixed expiration dates, the Fund understands that in order for Chase to
act, Chase must receive the Fund's instructions at its offices in New York,
addressed as Chase may from time to time request, by no later than noon (NY
City time) at least one business day prior to the last scheduled date to act
with respect thereto (or such earlier date or time as Chase may reasonably
notify the Fund). Absent Chase's timely receipt of such instructions, such
instruments will expire without liability to Chase.
6. RECEIPT AND DISBURSEMENT OF MONEY.
(a) Chase shall open and maintain a custody account for the Fund, subject
only to draft or order by Chase acting pursuant to the terms of this Agreement,
and shall hold in such account, subject to the provisions hereof, all cash
received by it from or for the Fund other than cash maintained by the Fund in a
bank account established and used in accordance with Rule 17f-3 under the 1940
Act. Funds held by Chase for the Fund may be deposited by it to its credit at
Chase in the Banking Department of Chase or in such other banks or trust
companies as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act, and that each such bank or trust company shall be
approved by vote of a majority of the Board of Directors of the Fund. Such
funds shall be deposited by Chase in its capacity as Custodian and shall be
withdrawable by Chase only in that capacity.
(b) Upon receipt of Proper Instructions (which may be continuing
instructions as deemed appropriate by the parties) Chase shall make payments of
cash to, or for the account of, the Fund from such cash only (i) for the
purchase of securities, options, futures contracts or options on futures
contracts for the Fund as provided in Section 13 hereof; (ii) in the case of a
purchase of securities effected through a Book-Entry System or Securities
Depository, in accordance with the conditions set forth in Section 8 hereof;
(iii) in the case of repurchase agreements entered into between the Fund and
Chase, or another bank, or a broker-dealer which is a member of The National
Association of Securities Dealers, Inc. ("NASD"), either (a) against delivery
of the securities either in certificate form or through an entry crediting
Chase's account at the Federal Reserve Bank with such securities or (b) against
delivery of the receipt evidencing purchase by the Fund of securities owned by
Chase along with written evidence of the agreement by U.S. Trust to repurchase
such securities from the Fund; (iv) for transfer to a time deposit account of
the Fund in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the applicable
bank pursuant to Proper Instructions from the Fund; (v) for the payment of
dividends or other distributions on shares declared pursuant to the governing
documents of the Fund, or for the payment of interest, taxes, administration,
distribution or advisory fees or expenses which are to be borne by the Fund
under the terms of this Agreement, any Advisory Agreement, or any
administration agreement; (vi) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Fund and held
by or to be delivered to Chase; (vii) to a subcustodian pursuant to Section 7
hereof; (viii) for such common expenses incurred by the Fund in the ordinary
course of its business, including but not limited to printing and mailing
expenses, legal fees, accountants fees, exchange
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fees; or (ix) for any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Directors or of the Executive Committee of the Fund signed by an officer of
the Fund and certified by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose for which such payment is
to be made, declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
(c) Chase is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received as custodian for the Fund.
6A. ADVANCES BY CUSTODIAN. The Fund may from time to time purchase
securities for settlement payable in "next day" funds and provide for payment
for such transactions by selling securities for settlement in "same day" funds
settling on the day after settlement of the Fund's purchase transaction. Under
these circumstances the Fund may require the Custodian to advance funds in
amounts not exceeding 20% of the value of the Fund's assets at the time of the
advance for payment of the securities purchase transaction, and the Custodian
shall recover an amount equal to its advance, without interest, from the
proceeds of the securities sale. In addition to the foregoing, the Custodian
may from time to time agree to advance cash to the Fund, without interest, for
the fund's other proper corporate purposes. If the Custodian advances cash for
any purpose, the Fund shall and hereby does grant to the Custodian a security
interest in Fund securities equal in value to the amount of the cash advance
but in no event shall the value of securities in which a security interest has
been granted exceed 20% of the value of the Fund's total assets at the time of
the pledge; should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash to reasonably dispose of any
securities in which it has a security interest to the extent necessary to
obtain reimbursement.
7. RECEIPT AND DELIVERY OF SECURITIES.
(a) Except as provided by Section 8 hereof, Chase shall hold and physically
segregate all securities and noncash Property received by it for the Fund. All
such securities and non-cash Property are to be held or disposed of by Chase
for the Fund pursuant to the terms of this Agreement. In the absence of Proper
Instructions accompanied by a certified resolution authorizing the specific
transaction by the Fund's Board, Chase shall have no power or authority to
withdraw, deliver, assign, hypothecate, pledge or otherwise dispose of any such
securities and investments, except in accordance with the express terms
provided for in this Agreement. In no case may any director, officer, employee
or agent of the Fund withdraw any securities. In connection with its duties
under this Section 7, Chase may, at its own expense, enter into subcustodian
agreements with other banks or trust companies for the receipt of certain
securities and cash to be held by Chase for the account of the Fund pursuant to
this Agreement; provided that each such bank or trust company has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000) and that such bank or
trust company agrees with Chase to comply with all relevant provisions of the
1940 Act and applicable rules and regulations thereunder. Chase will be liable
for acts or omissions of any subcustodian. Chase shall employ sub-custodians
upon receipt of Proper Instructions, but only in accordance with an applicable
vote by the Board of Directors of the Fund.
(b) Promptly after the close of business on each day Chase shall furnish
the Fund with confirmations and a summary of all transfers to or from the
account of the Fund during said day. Where securities are transferred to the
account of the Fund established at a Securities Depository or Book Entry System
pursuant to Section 8 hereof, Chase shall also by book-entry or otherwise
identify as belonging to such Fund the quantity of securities in a fungible
bulk of securities registered in the name of Chase (or its nominee) or shown in
Chase's account on the books of a Securities Depository or Book-Entry System.
At least monthly and from time to time, Chase shall furnish the Fund with a
detailed statement of the Property held for the Fund under this Agreement.
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8. USE OF SECURITIES DEPOSITORY OR BOOK-ENTRY SYSTEM. The Fund shall
deliver to Chase a certified resolution of the Board of Directors of the Fund
approving, authorizing and instructing Chase on a continuous and ongoing basis
until instructed to the contrary by Proper Instructions actually received by
Chase (i) to deposit in a Securities Depository or Book-Entry System all
securities of the Fund eligible for deposit therein and (ii) to utilize a
Securities Depository or Book-Entry System to the extent possible in connection
with the performance of its duties hereunder, including without limitation
settlements of purchases and sales of securities by the Fund, and deliveries
and returns of securities collateral in connection with borrowings. Without
limiting the generality of such use, it is agreed that the following provisions
shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities
Depository or Book-Entry System will at all times (1) be represented in an
account of Chase in the Securities Depository or Book Entry System (the
"Account") and (2) be segregated from any assets and cash controlled by Chase
in other than a fiduciary or custodian capacity but may be commingled with
other assets held in such capacities. Chase will effect payment for securities
and receive and deliver securities in accordance with accepted industry
practices as set forth in (b) below, unless the Fund has given Chase Proper
Instructions to the contrary. The records of Chase with respect to securities
of the Fund maintained in a Securities Depository or Book Entry System shall
identify by book entry those securities belonging to the Fund.
(b) Chase shall pay for securities purchased for the account of the Fund
upon (i) receipt of advice from the Securities Depository or Book Entry System
that such securities have been transferred to the Account, and (ii) the making
of an entry on the records of Chase to reflect such payment and transfer for
the account of the Fund. Upon receipt of Proper Instructions, Chase shall
transfer securities sold for the account of the Fund upon (i) receipt of advice
from the Securities Depository or Book Entry System that payment for such
securities has been transferred to the Account, and (ii) the making of an entry
on the records of Chase to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the Securities Depository or Book Entry
System of transfers of securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by Chase and be provided to the Fund at
its request. Upon request, Chase shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written advice or
notice and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in a Securities Depository or Book Entry
System for the account of the Fund.
(c) Chase shall provide the Fund with any report obtained by Chase on the
Securities Depository or Book Entry System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Securities Depository or Book Entry System;
(d) All Books and records maintained by Chase which relate to the Fund
participation in a Securities Depository or Book-Entry System will at all times
during Chase's regular business hours be open to the inspection of the Fund's
duly authorized employees or agents, and the Fund will be furnished with all
information in respect of the services rendered to it as it may require.
(e) Anything to the contrary in this Agreement notwithstanding, Chase shall
be liable to the Fund for any loss or damage to the Fund resulting from any
negligence, misfeasance or misconduct of Chase or any of its agents or of any
of its or their employees in connection with its or their use of the Securities
Depository or Book Entry Systems or from failure of Chase or any such agent to
enforce effectively such rights as it may have against such Securities
Depository or Book Entry System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of Chase with respect to any claim
against the Securities Depository or Book Entry System or any other person
which Chase may have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or damage.
9. SEGREGATED ACCOUNT. Chase shall upon receipt of Proper Instructions
establish and maintain a segregated account or accounts for and on behalf of
the Fund, into which account or accounts may be
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transferred cash and/or securities, including securities maintained in an
account by Chase pursuant to Section 8 hereof, (i) in accordance with the
provisions of any agreement among the Fund, Chase and a broker dealer
registered under the Securities and Exchange Act of 1934 and a member of the
NASD (or any futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with options purchased,
sold or written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No. 10666, or
any subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the case
of clause (iv), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
10. INSTRUCTIONS CONSISTENT WITH THE ARTICLES, ETC.
(a) Unless otherwise provided in this Agreement, Chase shall act only upon
Proper Instructions. Chase may assume that any Proper Instructions received
hereunder are not in any way inconsistent with any provision of the Articles or
By-Laws or any vote or resolution of the Fund's Board of Directors or any
committee thereof. Chase shall be entitled to rely upon any Proper Instructions
actually received by Chase pursuant to this Agreement. The Fund agrees that
Chase shall incur no liability in acting in good faith upon Proper Instructions
given to Chase, except to the extent such liability was incurred as a result of
Chase's negligence or willful misconduct. In accord with instructions from the
Fund, as required by accepted industry practice or as Chase may elect in
effecting the execution of Fund instructions, advances of cash or other
Property made by Chase, arising from the purchase, sale, redemption, transfer
or other disposition of Property of the Fund, or in connection with the
disbursement of funds to any party, or in payment of fees, expenses, claims or
liabilities owed to Chase by the Fund, or to any other party which has secured
judgment in a court of law against the Fund which creates an overdraft in the
accounts or over-delivery of Property, shall be deemed a loan by Chase to the
Fund, payable on demand, bearing interest at such rate customarily charged by
Chase for similar loans.
(b) The Fund agrees that test arrangements, authentication methods or other
security devices to be used with respect to instructions which the Fund may
give by telephone, telex, TWX, facsimile transmission, bank wire or other
teleprocess, or through an electronic instruction system, shall be processed in
accordance with terms and conditions for the use of such arrangements, methods
or devices as Chase may put into effect and modify from time to time. The Fund
shall safeguard any test keys, identification codes or other security devices
which Chase makes available to the Fund and agrees that the Fund shall be
responsible for any loss, liability or damage incurred by Chase or by the Fund
as a result of Chase's acting in accordance with instructions from any
unauthorized person using the proper security device except to the extent such
loss, liability or damage was incurred as a result of Chase's negligence or
willful misconduct. Chase may electronically record, but shall not be obligated
to so record, any instructions given by telephone and any other telephone
discussions with respect to the Fund. In the event that the Fund uses Chase's
Asset Management system or any successor electronic communications or
information system, the Fund agrees that Chase is not responsible for the
consequences of the failure of that system to perform for any reason, beyond
the reasonable control of Chase, or the failure of any communications carrier,
utility, or communications network. In the event that system is inoperable, the
Fund agrees that it will accept the
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communication of transaction instructions by telephone, facsimile transmission
on equipment compatible to Chase's facsimile receiving equipment or by letter,
at no additional charge to the Fund.
(c) Chase shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by Chase from issuers of the securities
being held for the Fund. With respect to tender or exchange offers, Chase shall
transmit promptly by facsimile to the Fund all written information received by
Chase from issuers of the securities whose tender or exchange is sought and
from the party (or his agents) making the tender or exchange offer. If the Fund
desires to take action with respect to any tender offer, exchange offer or any
other similar transaction, the Fund shall notify Chase at least three business
days prior to the date on which Chase is to take such action or upon the date
such notification is first received by the Fund, if later. If any Property
registered in the name of a nominee of Chase is called for partial redemption
by the issuer of such property, Chase is authorized to allot the called portion
to the respective beneficial holders of the Property in such manner deemed to
be fair and equitable by Chase in its sole discretion.
11. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. Chase is authorized to take
the following action without Proper Instructions:
(a) Collection of Income and Other Payments. Chase shall:
(i) collect and receive on a timely basis for the account
of the Fund, all income and other payments and distributions, including
(without limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of the Fund, and promptly advise the
Fund of such receipt and shall credit such income, as collected, to the Fund.
From time to time, Chase may elect, but shall not be obligated, to credit the
account with interest, dividends or principal payments on payable or
contractual settlement date, in anticipation of receiving same from a payor,
central depository, broker or other agent employed by the Fund or Chase. Any
such crediting and posting shall be at the Fund's sole risk, and Chase shall be
authorized to reverse any such advance posting in the event it does not receive
good funds from any such payor, central depository, broker or agent of the
Customer. Chase agrees to promptly notify the Fund of the reversal of any such
advance posting.
(ii) endorse and deposit for collection in the name of
the Fund, checks, drafts, or other orders for the payment of money on the same
day as received;
(iii) receive and hold for the account of the Fund all
securities received by the Fund as a result of a stock dividend, share split-up
or reorganization, merger, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any portfolio securities of the Fund held by Chase hereunder;
(iv) present for payment and collect the amount payable
upon all securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable; (v) take
any action which may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsement for
collection of checks, drafts and other negotiable instruments;
(vi) to effect an exchange of the securities where the
par value is changed, and to surrender securities at maturity or upon an
earlier call for redemption, or when securities otherwise become payable,
against payment therefore in accordance with accepted industry practice. If any
Property registered in the name of a nominee of Chase is called for partial
redemption by the issuer of such property, Chase is authorized to allot the
called portion to the respective beneficial holders of the Property in such
manner deemed to be fair and equitable by Chase in its sole discretion.
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(b) Miscellaneous Transactions. Chase is authorized to deliver or cause to
be delivered Property against payment or other consideration or written receipt
therefor for examination by a dealer selling for the account of the Fund in
accordance with street delivery custom.
12. TRANSACTIONS REQUIRING INSTRUCTIONS. In addition to the actions
requiring Proper Instructions set forth herein, upon receipt of Proper
Instructions and not otherwise, Chase, directly or through the use of a
Securities Depository or Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in such Proper
Instructions, proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any securities may be exercised;
(b) Deliver any securities held for the Fund against receipt of other
securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
issuer of securities or corporation, or the exercise of any conversion
privilege;
(c) Deliver any securities held for the Fund to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
issuer of securities or corporation, against receipt of such certificates of
deposit, interim receipts or other instruments or documents, and cash, if any,
as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund and take
such other steps as shall be stated in said instructions to be for the purpose
of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust company
for the purpose of pledge or hypothecation to secure any loan incurred by the
Fund; provided, however, that securities shall be released only upon payment to
Chase of the monies borrowed, or upon receipt of adequate collateral as agreed
upon by the Fund and Chase which may be in the form of cash or obligations
issued by the U.S. government, its agencies or instrumentalities, except that
in cases where additional collateral is required to secure a borrowing already
made, subject to proper prior authorization, further securities may be released
for that purpose; and pay such loan upon re-delivery to it of the securities
pledged or hypothecated therefore and upon surrender of the note or notes
evidencing the loan; and
(f) Deliver securities in accordance with the provisions of any agreement
among the Fund, Chase and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Funds;
(g) Deliver securities in accordance with the provisions of any agreement
among the Fund, Chase and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund; and
(h) Deliver securities against payment or other consideration or written
receipt therefore for transfer of securities into the name of the Fund or Chase
or a nominee of either, or for exchange or securities for a different number of
bonds, certificates, or other evidence, representing the same aggregate face
amount or number of units bearing the same interest rate, maturity date and
call provisions, if any; provided that, in any such case, the new securities
are to be delivered to Chase;
(i) Exchange securities in temporary form for securities in definitive
form;
(j) Surrender, in connection with their exercise, warrants, rights or
similar securities, provided that in each case, the new securities and cash, if
any, are to be delivered to Chase;
(k) Deliver securities upon receipt of payment in connection with any
repurchase agreement related to such securities entered into by the Fund;
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(l) Deliver securities pursuant to any other proper corporate purpose, but
only upon receipt of, in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive Committee signed by an
officer of the Funds and certified by the Secretary or an Assistant Secretary,
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made.
13. PURCHASE OF SECURITIES. Promptly after each purchase of securities,
options, futures contracts or options on futures contracts by the investment
advisor, the Fund shall deliver to Chase (as Custodian) Proper Instructions
specifying with respect to each such purchase: (a) the name of the issuer and
the title of the securities, (b) the number of shares of the principal amount
purchased and accrued interest, if any, (c) the dates of purchase and
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, (f) the name of the person from whom or the broker through whom
the purchase was made and (g) the Fund name. Chase shall upon receipt of
securities purchased by or for the Fund registered in the name of the Fund or
in the name of a nominee of Chase or of the Fund or in proper form for transfer
or upon receipt of evidence of title to options, futures contracts or options
on futures contracts purchased by the Fund, pay out of the moneys held for the
account of the Fund the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Proper Instructions. Except as
specifically stated otherwise in this Agreement, in any and every case where
payment for purchase of securities for the account of the Fund is made by Chase
in advance of receipt of the securities purchased in the absence of specific
written instructions from the Fund to so pay in advance, Chase shall be
absolutely liable to the Fund for such securities to the same extent as if the
securities had been received by Chase.
14. SALE OF SECURITIES. Promptly after each sale of securities by the Fund
at the instruction of the investment advisor, the Fund shall deliver to Chase
(as Custodian) Proper Instructions, specifying with respect to each such sale;
(a) the name of the issuer and the title of the security, (b) the number of
shares or principal amount sold, and accrued interest, if any, (c) the date of
sale, (d) the sale price per unit, (e) the total amount payable to the Fund
upon such sale, (f) the name of the broker through whom or the person to whom
the sale was made and (g) the Fund name. Chase shall deliver the securities
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 Proper
Instructions. Subject to the foregoing, Chase may accept payment in such form
as shall be satisfactory to it, and may deliver securities and arrange for
payment in accordance with the customs prevailing among dealers in securities.
15. NOT IN USE.
16. RECORDS. The books and records pertaining to the Fund which are in the
possession of Chase shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act, as amended, and
other applicable securities laws and rules and regulations. The Fund, or the
Fund's authorized representative, shall have access to such books and records
at all times during Chase's normal business hours, and such books and records
shall be surrendered to the Fund promptly upon request. Upon reasonable request
of the Fund, copies of any such books and records shall be provided by Chase to
the Fund or the Fund's authorized representative at the Fund's expense.
17. COOPERATION WITH ACCOUNTANTS. Chase shall cooperate with the Fund's
independent certified public accountants and shall take all reasonable action
in the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their unqualified opinion, including but not limited to the opinion included
in the Fund's Form N-1A, Form N-SAR and other reports to the Securities and
Exchange Commission and with respect to any other requirement of such
Commission.
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18. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. Chase shall provide
the Fund, at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a Securities Depository or Book Entry System, relating to the services
provided by Chase under this Contract; such reports, shall be of sufficient
scope and in sufficient detail, as may reasonably be required by the Fund to
provide reasonable assurance that any material inadequacies would be disclosed
by such examination, and, if there are no such inadequacies, the reports shall
so state.
19. CONFIDENTIALITY. Chase agrees on behalf of itself and its employees to
treat confidentially and as the proprietary information of the Fund all records
and other information relative to the Fund and its prior, present or potential
Shareholders and relative to the advisors and its prior, present or potential
customers, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where Chase may be exposed
to civil or criminal contempt proceedings for failure to comply, when requested
to divulge such information by duly constituted authorities, or when so
requested by the Fund. Nothing contained herein, however, shall prohibit Chase
from advertising or soliciting the public generally with respect to other
products or services, regardless of whether such advertisement or solicitation
may include prior, present or potential Shareholders of the Fund.
20. EQUIPMENT FAILURES. In the event of equipment failures beyond Chase's
control, Chase shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall not have liability with
respect thereto. Chase shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
back up emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
21. RIGHT TO RECEIVE ADVICE.
(a) Advice of Fund. If Chase shall be in doubt as to any action to be taken
or omitted by it, it may request, and shall receive, from the Fund
clarification or advice.
(b) Advice of Counsel. If Chase shall be in doubt as to any question of law
involved in any action to be taken or omitted by Chase, it may request advice
at its own cost from counsel of its own choosing (who may be counsel for the
Fund or Chase, at the option of Chase).
(c) Conflicting Advice. In case of conflict between directions or advice
received by Chase pursuant to sub-paragraph (a) of this paragraph and advice
received by Chase pursuant to subparagraph (b) of this paragraph, Chase shall
be entitled to rely on and follow the advice received pursuant to the latter
provision alone.
(d) Protection of Chase. Chase shall be protected in any action or inaction
which it takes or omits to take in reliance on any directions or advice
received pursuant to subparagraphs (a) or (b) of this section which Chase,
after receipt of any such directions or advice, in good faith believes to be
consistent with such directions or advice. However, nothing in this paragraph
shall be construed as imposing upon Chase any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to Chase's properly taking or omitting to
take such action. Nothing in this subsection shall excuse Chase when an action
or omission on the part of Chase constitutes willful misfeasance, bad faith,
negligence or reckless disregard by Chase of its duties under this Agreement.
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22. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Fund assumes
full responsibility for insuring that the contents of each Prospectus of the
Fund complies with all applicable requirements of the 1933 Act, the 1940 Act,
and any laws, rules and regulations of governmental authorities having
jurisdiction.
23. COMPENSATION. As compensation for the services rendered by Chase during
the term of this Agreement, the Fund will pay to Chase, in addition to
reimbursement of its out-of-pocket expenses, monthly fees as outlined in
Exhibit A.
24. INDEMNIFICATION. The Fund, as sole owner of the Property, agrees to
indemnify and hold harmless Chase and its nominees from all taxes, charges,
expenses, assessments, claims, and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the Securities Exchange Act of 1934,
the 1940 Act, and any state and foreign securities and blue sky laws, all as or
to be amended from time to time) and expenses, including (without limitation)
attorney's fees and disbursements (hereafter "liabilities and expenses"),
arising directly or indirectly from any action or thing which Chase takes or
does or omits to take or do (i) at the request or on the direction of or in
reliance on the advice of the Fund, or (ii) upon Proper Instructions, provided,
that neither Chase nor any of its nominees or sub-custodians shall be
indemnified against any liability to the Fund or to its Shareholders (or any
expenses incident to such liability) arising out of (x) Chase's or such
nominee's or sub-custodian's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties under this Agreement or any agreement between
Chase and any nominee or subcustodian or (y) Chase's own negligent failure to
perform its duties under this Agreement. Chase similarly agrees to indemnify
and hold harmless the Fund from all liabilities and expenses arising directly
or indirectly from Chase's or such nominee's or sub-custodian's willful
misfeasance, bad faith, negligence or reckless disregard in performing its
duties under this agreement. In the event of any advance of cash for any
purpose made by Chase resulting from orders or Proper Instructions of the Fund,
or in the event that Chase or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise
from its or its nominee's or sub-custodian's own negligent action, negligent
failure to act, willful misconduct, or reckless disregard, the Fund shall
promptly reimburse Chase for such advance of cash or such taxes, charges,
expenses, assessments claims or liabilities.
25. RESPONSIBILITY OF CHASE. In the performance of its duties hereunder,
Chase shall be obligated to exercise care and diligence and to act in good
faith to insure the accuracy and completeness of all services performed under
this Agreement. Chase shall be responsible for its own negligent failure or
that of any subcustodian it shall appoint to perform its duties under this
Agreement but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, Chase shall not be liable for any
act or omission which does not constitute willful misfeasance, bad faith, or
negligence on the part of Chase or such subcustodian or reckless disregard of
such duties, obligations and responsibilities. Without limiting the generality
of the foregoing or of any other provision of this Agreement, Chase in
connection with its duties under this Agreement shall, so long as and to the
extent it is in the exercise of reasonable care, not be under any duty or
obligation to inquire into and shall not be liable for or in respect of (a) the
validity or invalidity or authority or lack thereof of any advice, direction,
notice or other instrument which conforms to the applicable requirements of
this Agreement, if any, and which Chase believes to be genuine, (b) the
validity of the issue of any securities purchased or sold by the Fund, the
legality of the purchase or sale thereof or the propriety of the amount paid or
received therefor, (c) the legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefore, (d) the legality of the
redemption of any Shares, or the propriety of the amount to be paid therefor,
(e) the legality of the declaration or payment of any dividend or distribution
on Shares, of (f) delays or errors or loss of data occurring by reason of
12
circumstances beyond Chase's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown
(except as provided in Section 20), flood or catastrophe, acts of God,
insurrection, war, riots, or failure of the mail, transportation, communication
or power supply.
26. COLLECTION OF INCOME. Chase shall collect on a timely basis all income
and other payments with respect to registered securities held hereunder to
which the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment by the
issuer, such securities are held by Chase or its agent thereof and shall credit
such income, as collected, to the Fund's custodian account. Without limiting
the generality of the foregoing, Chase shall detach and present for payment all
coupons and other income items requiring presentation as and when they become
due and shall collect interest when due on securities held hereunder. Income
due the Fund on securities loaned pursuant to the provisions of Section 9 shall
be the responsibility of the Fund. Chase will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Fund is properly entitled
27. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. Chase shall execute ownership
and other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with respect to securities
of the Fund held by it and in connection with transfers of securities.
28. EFFECTIVE PERIOD; TERMINATION AND AMENDMENT. This Agreement shall
become effective as of its execution, shall continue in full force and effect
until terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30) days after the date
of such delivery or mailing; provided, however that Chase shall not act under
Section 8 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities Depository or Book Entry
System and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Directors has reviewed the use by the
Fund of such Securities Depository and/or Book Entry System, as required in
each case by Rule 17f-4 under the Investment Company Act of 1940, as amended;
provided further, however, that the Fund shall not amend or terminate this
Agreement in contravention of any applicable federal or state regulations, or
any provision of the Articles of Incorporation, and further provided, that the
Fund may at any time by action of its Board of Directors (i) substitute another
bank or trust company for Chase by giving notice as described above to Chase,
or (ii) immediately terminate this Agreement in the event of the appointment of
a conservator or receiver for Chase by the Comptroller of the Currency or upon
the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund shall pay to Chase such
compensation as may be due as of the date of such termination and shall likewise
reimburse Chase for its costs, expenses and disbursements.
29. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Directors of the
Fund, Chase shall, upon termination, deliver to such successor custodian at the
office of the custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities Depository
or Book Entry System.
13
If no such successor custodian shall be appointed, Chase shall, in like
manner, upon receipt of a certified copy of a vote of the Board of Directors of
the Fund, deliver at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
Chase on or before the date when such termination shall be come effective, then
Chase shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, doing business in New York, New York, of its
own selection, having an aggregate capital, surplus, and undivided profits, as
shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by Chase and all instruments held
by Chase relative thereto and all other property held by it under this
Agreement and to transfer to an account of such successor custodian all of the
Fund's securities held in any Securities Depository or Book Entry System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of Chase after the date of termination hereof owing to failure of
the Fund to procure the certified copy of the vote referred to or of the Board
of Directors to appoint a successor custodian, Chase shall be entitled to fair
compensation for its services during such period as Chase retains possession of
such securities, funds and other properties and the provisions of this Contract
relating to the duties and obligations of Chase shall remain in full force and
effect.
30. NOTICES. All notices and other communications (collectively referred to
as "Notice" or "Notices") in this section hereunder shall be in writing and
shall be first sent by telegram, cable, telex, or facsimile sending device and
thereafter by overnight mail for delivery on the next business day. Notices
shall be addressed (a) if to Chase, at Chase's address, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000-0000, facsimile number (000) 000-0000; (b) if to the
Fund, at the address of the Fund Attention: Portfolio Manager, facsimile number
(000) 000-0000; or (c) if to neither of the foregoing, at such other address as
shall have been notified to the sender of any such Notice or other
communication. Notices sent by overnight mail shall be deemed to have been
given the next business day. Notices sent by messenger shall be deemed to have
been given on the day delivered, and notices sent by confirming telegram,
cable, telex or facsimile sending device shall be deemed to have been given
immediately. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
31. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
32. AMENDMENTS. This Agreement or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.
33. ADDITIONAL FUNDS. In the event that the Fund establishes one or more
series of the Fund, with respect to which it desires to have the Custodian
render services as custodian under the terms hereof, it shall so notify the
Custodian in writing, and if the Custodian agrees in writing to provide such
services, such series of Shares shall become a Fund hereunder.
34. MISCELLANEOUS. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their construction
or effect. This
14
Agreement shall be deemed to be a contract made in New York and governed by New
York law. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
insure to the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year first
above written.
CHASE MANHATTAN BANK
Attest: By:
------------------------ ----------------------------------
XXXXXX X. XX XXXXXX
VICE PRESIDENT
NUVEEN INCOME FUND, INC.
Attest: By:
------------------------ ----------------------------------
XXXXXXX X. XXXXXXXXX
ASSISTANT GENERAL COUNSEL
15
CUSTODY AGREEMENTS BETWEEN
NUVEEN OPEN-END FUNDS
AND
CHASE MANHATTAN BANK
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
Nuveen Flagship All-American Municipal Bond Fund
Nuveen Flagship Limited Term Municipal Bond Fund
Nuveen Flagship Intermediate Municipal Bond Fund
Nuveen Flagship Arizona Municipal Bond Fund
Nuveen Flagship Colorado Municipal Bond Fund
Nuveen Flagship Florida Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen Flagship New Mexico Municipal Bond Fund
Nuveen Flagship Pennsylvania Municipal Bond Fund
Nuveen Flagship Virginia Municipal Bond Fund
Nuveen California Municipal Bond Fund
Nuveen California Insured Municipal Bond Fund
Nuveen Flagship Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen Massachusetts Insured Municipal Bond Fund
Nuveen Flagship New Jersey Municipal Bond Fund
Nuveen Flagship New York Municipal Bond Fund
Nuveen New York Insured Municipal Bond Fund
Nuveen Flagship Georgia Municipal Bond Fund
Nuveen Flagship Louisiana Municipal Bond Fund
Nuveen Flagship North Carolina Municipal Bond Fund
Nuveen Flagship Tennessee Municipal Bond Fund
Nuveen Flagship Kansas Municipal Bond Fund
Nuveen Flagship Kentucky Municipal Bond Fund
Nuveen Flagship Kentucky Limited Term Municipal Bond Fund
Nuveen Flagship Michigan Municipal Bond Fund
Nuveen Flagship Missouri Municipal Bond Fund
Nuveen Flagship Ohio Municipal Bond Fund
Nuveen Flagship Wisconsin Municipal Bond Fund
Nuveen Dividend and Growth Fund
Nuveen Growth and Income Stock Fund
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock Fund
Nuveen European Value Fund
Nuveen Xxxxxxxxxxx Growth Fund
Nuveen Income Fund
Nuveen Tax-Exempt Money Market Fund, Inc.
Nuveen Tax-Free Reserves, Inc.
Nuveen Massachusetts Tax-Free Money Market Fund
Nuveen New York Tax-Free Money Market Fund
Nuveen California Tax-Free Money Market Fund
