Mutual Fund/Corporation/Non-Series
CUSTODIAN AGREEMENT
AGREEMENT dated as of the 11th day of August, 1997 between BANKERS TRUST
COMPANY (the "Custodian") and ISI STRATEGY FUND, INC. (the "Customer").
WHEREAS, the Customer desires to appoint the Custodian as custodian on behalf
of the Customer under the terms and conditions set forth in this Agreement,
and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs the Custodian as
custodian of all assets of the Customer which are delivered to and accepted by
the Custodian or any Subcustodian (as that term is defined in Section 4) (the
"Property") pursuant to the terms and conditions set forth herein. Without
limitation, such Property shall include stocks and other equity interests of
every type, evidences of indebtedness, other instruments representing same or
rights or obligations to receive, purchase, deliver or sell same and other
non-cash investment property of the Customer which is acceptable for deposit
("Securities") and cash from any source and in any currency ("Cash"). The
Custodian shall not be responsible for any property of the Customer held or
received by the Customer or others and not delivered to the Custodian or any
Subcustodian.
2. Maintenance of Securities and Cash at Custodian and Subcustodian Locations.
Pursuant to Instructions, the Customer shall direct the Custodian to (a)
settle Securities transactions and maintain cash 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 payment or where such
Securities are acquired and (b) maintain cash and cash equivalents in such
countries in amounts reasonably necessary to effect the Customer's
transactions in such Securities. Instructions to settle Securities
transactions in any country shall be deemed to authorize the holding of such
Securities and Cash in that country.
3. Custody Account. The Custodian agrees to establish and maintain custody
account or accounts on its books in the name of the Customer (the "Account")
for any and all Property received and accepted by the Custodian or any
Subcustodian for the account of the Customer. The Custodian shall have the
right, in its sole discretion, to refuse to accept any Property that is not in
proper form for deposit for any reason. The Customer acknowledges its
responsibility as a principal for all of its obligations to the Custodian
arising under or in connection with this Agreement, warrants its authority to
deposit in the Account any Property received therefor by the Custodian or a
Subcustodian and to give, and authorize others to give, instructions relative
thereto. The Custodian may deliver securities of the same class in place of
those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian for Account, on
behalf of the Customer, all Property in such Account. All transactions,
including, but not limited to, foreign exchange transactions, involving the
Property shall be executed or settled solely in accordance with Instructions,
except that until the Custodian receives Instructions to the contrary, the
Custodian will:
(a) collect all interest and dividends and all other income and payments,
whether paid in cash or in kind, on the Property, as the same become
payable and credit the same to the Account;
(b) present for payment all Securities held in the Account which are
called, redeemed or retired or otherwise become payable and all
coupons and other income items which call for payment upon
presentation to the extent that the Custodian or Subcustodian is
actually aware of such opportunities and hold the cash received in
the Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary securities
for those in definitive form and the exchange of warrants, or other
documents of entitlement to securities, for the Securities
themselves) and (ii) when notification of a tender or exchange offer
(other than ministerial exchanges described in (i)above) is received
for the Account, endeavor to receive Instructions, provided that if
such Instructions are not received in time for the Custodian to take
timely action, no action shall be taken with respect thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock split
is received for the Account and such rights entitlement or fractional
interest bears an expiration date, if after endeavoring to obtain
Instructions such Instructions are not received in time for the
Custodian to take timely action or if actual notice of such actions
was received too late to seek Instructions, sell in the discretion of
the Custodian (which sale the Customer hereby authorizes the
Custodian to make) such rights entitlement or fractional interest and
credit the Account with the net proceeds of such sale;
(e) execute in the Customer's name for the Account, whenever the
Custodian deems it appropriate, such ownership and other certificates
as may be required to obtain the payment of income from the Property
in the Account;
(f) pay for the Account, any and all taxes and levies in the nature of
taxes imposed on interest, dividends or other similar income on the
Property in the Account by any governmental authority. In the event
there is insufficient Cash available in the Account to pay such taxes
and levies, the Custodian shall notify the Customer of the amount of
the shortfall and the Customer, at its option, may deposit additional
Cash in the Account or take steps to have sufficient Cash available.
The Customer agrees, when and if requested by the Custodian and
required in connection with the payment of any such taxes to
cooperate with the Custodian in furnishing information, executing
documents or otherwise; and
(g) appoint brokers and agents for any of the ministerial transactions
involving the Securities described in (a) - (f), including, without
limitation, affiliates of the Custodian or any Subcustodian.
4. Subcustodians and Securities Systems. The Customer authorizes and
instructs the Custodian to hold the Property in the Account in
custody accounts which have been established by the Custodian with
(a) one of its U.S. branches or another U.S. bank or trust company or
branch thereof located in the U.S. which is itself qualified under
the Investment Company Act of 1940, as amended ("1940 Act"), to act
as custodian (individually, a "U.S. Subcustodian"), or a U.S.
securities depository or clearing agency or system in which the
Custodian or a U.S. Subcustodian participates (individually, a "U.S.
Securities System") or (b) one of its non-U.S. branches or
majority-owned non-U.S. subsidiaries, a non-U.S. branch or
majority-owned subsidiary of a U.S. bank or a non-U.S. bank or trust
company, acting as custodian (individually, a "non-U.S.
Subcustodian"; U.S. Subcustodians and non-U.S. Subcustodians,
collectively, "Subcustodians"), or a non-U.S. depository or clearing
agency or system in which the Custodian or any Subcustodian
participates (individually, a "non-U.S. Securities System"; U.S.
Securities System and non-U.S. Securities System, collectively,
"Securities System"),
provided that in each case in which a U.S. Subcustodian or U.S.
Securities System is employed, each such Subcustodian or Securities
System shall have been approved by Instructions; provided further
that in each case in which a non-U.S. Subcustodian or non-U.S.
Securities System is employed, (a) such Subcustodian or Securities
System either is (i) a "qualified U.S. bank" as defined by Rule 17f-5
under the 1940 Act ("Rule 17f-5") or (ii) an "eligible foreign
custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S.
Securities and Exchange Commission ("SEC") exempting such agent or
the subcustody arrangements thereto from all or part of the
provisions of Rule 17f-5 and (b) the agreement between the Custodian
and such non-U.S. Subcustodian has been approved by Instructions; it
being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any
Subcustodian or Securities System has been proper under the 1940 Act
or any rule or regulation thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to
the Customer, and if desirable and practicable, appoint a replacement
subcustodian or securities system in accordance with the provisions
of this Section. In addition, the Custodian may, at any time in its
discretion, upon written notification to the Customer, terminate the
employment of any Subcustodian or Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each
non-U.S. Subcustodian and non-U.S. Securities System then acting on
behalf of the Custodian and the name and address of the governmental
agency or other regulatory authority that supervises or regulates
such non-U.S Subcustodian and non-U.S. Securities System; (b) the
countries in which each non-U.S. Subcustodian or non-U.S. Securities
System is located; and (c) so long as Rule 17f-5 requires the
Customer's Board of Directors to directly approve its foreign custody
arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be
requested by the Customer to ensure compliance with Rule 17f-5. So
long as Rule 17f-5 requires the Customer's Board of Directors to
directly approve its foreign custody arrangements, the Custodian also
shall furnish annually to the Customer information concerning such
non-U.S. Subcustodians and non-U.S. Securities Systems similar in
kind and scope as that furnished to the Customer in connection with
the initial approval of this Agreement. Custodian agrees to promptly
notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S.
Subcustodian or non-U.S. Securities System has ceased to be a
qualified U.S. bank or an eligible foreign custodian each within the
meaning of Rule 17f-5 or has ceased to be subject to an exemptive
order from the SEC.
5. Use of Subcustodian. With respect to Property in the Account which is
maintained by the Custodian in the custody of a Subcustodian employed
pursuant to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer, any Property held by such Subcustodian.
(b) Any Property in the Account held by a Subcustodian will be subject
only to the instructions of the Custodian or its agents.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to the
holding of Property shall require that (i) the Account will be
adequately indemnified or its losses adequately insured; (ii) 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 except a claim for payment in accordance with such
agreement for their safe custody or administration and expenses
related thereto, (iii) beneficial ownership of such Securities be
freely transferable without the payment of money or value other than
for safe custody or administration and expenses related thereto, (iv)
adequate records will be maintained identifying the Property held
pursuant to such Agreement as belonging to the Custodian, on behalf
of its customers and (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other representatives of or
designated by, the Custodian, including the independent public
accountants of or designated by, the Customer be given access to the
books and records of such Subcustodian relating to its actions under
its agreement pertaining to any Property held by it thereunder or
confirmation of or pertinent information contained in such books and
records be furnished to such persons designated by the Custodian.
6. Use of Securities System. With respect to Property in the Account
which are maintained by the Custodian or any Subcustodian in the
custody of a Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by its
agreement with the Custodian to, identify on its books such Property
as being held for the account of the Custodian or Subcustodian for
its customers.
(b) Any Property held in a Securities System for the account of the
Custodian or a Subcustodian will be subject only to the instructions
of the Custodian or such Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be maintained in an
account holding only assets for customers of the Custodian or
Subcustodian, as the case may be, unless precluded by applicable law,
rule, or regulation.
(d) The Custodian shall provide the Customer with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System.
7. Agents.The Custodian may at any time or times in its sole discretion
appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as custodian, as its agent
to carry out such of the provisions of this Agreement as the
Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
8. Records, Ownership of Property, Statements, Opinions of Independent
Certified Public Accountants.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether held by the Custodian or a Subcustodian or in a
Securities System as authorized herein, shall be clearly recorded on
the Custodian's books as belonging to the Account and not for the
Custodian's own interest. The Custodian shall keep accurate and
detailed accounts of all investments, receipts, disbursements and
other transactions for the Account. All accounts, books and records
of the Custodian relating thereto shall be open to inspection and
audit at all reasonable times during normal business hours by any
person designated by the Customer. All such accounts shall be
maintained
and preserved in the form reasonably requested by the Customer. The
Custodian will supply to the Customer from time to time, as mutually
agreed upon, a statement in respect to any Property in the Account
held by the Custodian or by a Subcustodian. In the absence of the
filing in writing with the Custodian by the Customer of exceptions or
objections to any such statement within sixty (60) days of the
mailing thereof, the Customer shall be deemed to have approved such
statement and in such case or upon written approval of the Customer
of any such statement, such statement shall be presumed to be for all
purposes correct with respect to all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the
Customer's independent certified public accountants with respect to
the Custodian's activities hereunder in connection with the
preparation of the Customer's Form N1A and the Customer's Form NSAR
or other periodic reports to the SEC and with respect to any other
requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent
certified public accountants with respect to the services provided by
the Custodian under this Agreement, including, without limitation,
the Custodian's accounting system, internal accounting control and
procedures for safeguarding Cash and Securities, including Cash and
Securities deposited and/or maintained in a securities system or with
a Subcustodian. Such report shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Customer and
as may reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by the Custodian
which can provide the Customer, on a daily basis, with the ability to
view on-line or to print on hard copy various reports of Account
activity and of Securities and/or Cash being held in the Account. To
the extent that such service shall include market values of
Securities in the Account, the Customer hereby acknowledges that the
Custodian now obtains and may in the future obtain information on
such values from outside sources that the Custodian considers to be
reliable and the Customer agrees that the Custodian (i) does not
verify or represent or warrant either the reliability of such service
nor the accuracy or completeness of any such information furnished or
obtained by or through such service and (ii) shall be without
liability in selecting and utilizing such service or furnishing any
information derived therefrom.
9. Holding of Securities, Nominees, etc. Securities in the Account which
are held by the Custodian or any Subcustodian may be held by such
entity in the name of the Customer, in the Custodian's or
Subcustodian's name, in the name of the Custodian's or Subcustodian's
nominee, or in bearer form. Securities that are held by a
Subcustodian or which are eligible for deposit in a Securities System
as provided above may be maintained with the Subcustodian or the
Securities System in an account for the Custodian's or Subcustodian's
customers, unless prohibited by law, rule, or regulation. The
Custodian or Subcustodian, as the case may be, may combine
certificates representing Securities held in the Account with
certificates of the same issue held by it as fiduciary or as a
custodian. In the event that any Securities in the name of the
Custodian or its nominee or held by a Subcustodian and registered in
the name of such Subcustodian or its nominee are called for partial
redemption by the issuer of such Security, the Custodian may, subject
to the rules or regulations pertaining to allocation of any
Securities System in which such Securities have been deposited,
allot, or cause to be allotted, the called portion of the respective
beneficial holders of such class of security in any manner the
Custodian deems to be fair and equitable.
10. Proxies, etc. With respect to any proxies, notices, reports or other
communications relative to any
of the Securities in the Account, the Custodian shall perform such
services and only such services relative thereto as are (i) set forth
in Section 3 of this Agreement, (ii) described in Exhibit A attached
hereto (as such service therein described may be in effect from time
to time) (the "Proxy Service") and (iii) as may otherwise be agreed
upon between the Custodian and the Customer. The liability and
responsibility of the Custodian in connection with the Proxy Service
referred to in (ii) of the immediately preceding sentence and in
connection with any additional services which the Custodian and the
Customer may agree upon as provided in (iii) of the immediately
preceding sentence shall be as set forth in the description of the
Proxy Service and as may be agreed upon by the Custodian and the
Customer in connection with the furnishing of any such additional
service and shall not be affected by any other term of this
Agreement. Neither the Custodian nor its nominees or agents shall
vote upon or in respect of any of the Securities in the Account,
execute any form of proxy to vote thereon, or give any consent or
take any action (except as provided in Section 3) with respect
thereto except upon the receipt of Instructions relative thereto.
11. Segregated Account. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations
thereunder, the Custodian shall, upon receipt of Instructions,
establish and maintain a segregated account or accounts on its books
for and on behalf of the Customer.
12. Settlement Procedures. Securities will be transferred, exchanged or
delivered by the Custodian or a Subcustodian upon receipt by the
Custodian of Instructions which include all information required by
the Custodian. Settlement and payment for Securities received for the
Account and delivery of Securities out of the Account may be effected
in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without
limitation, delivering Securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such
Securities from such purchaser or dealer, as such practices and
procedures may be modified or supplemented in accordance with the
standard operating procedures of the Custodian in effect from time to
time for that jurisdiction or market. The Custodian shall not be
liable for any loss which results from effecting transactions in
accordance with the customary or established securities trading or
securities processing practices and procedures in the applicable
jurisdiction or market.
Notwithstanding that the Custodian may settle purchases and sales
against, or credit income to, the Account, on a contractual basis, as
outlined in the Global Guide provided to the Customer by the
Custodian, the Custodian may, at its sole option, reverse such
credits or debits to the Account in the event that the transaction
does not settle, or the income is not received in a timely manner,
and the Customer agrees to hold the Custodian harmless from any
losses which may result therefrom.
13. Conditional Credits.
(a) Notwithstanding any other provision of this Agreement, the Custodian
shall not be required to comply with any Instructions to settle the
purchase of any securities for the Account, unless there are
sufficient immediately available funds in the relevant currency in
the Account, provided that, if, after all expenses, debits and
withdrawals of Cash in the relevant currency ("Debits") applicable to
the Account have been made and if after all Conditional Credits, as
defined below, applicable to the Account have been made final entries
as set forth in (c) below, the amount of immediately available funds
in the relevant currency in such Account is at least equal to the
aggregate purchase price of all Securities for which the Custodian
has received Instructions to settle on that date
("Settlement Date"), the Custodian, upon settlement, shall credit the
Securities to the Account by
making a final entry on its books and records.
(b) Notwithstanding the foregoing, if after all Debits applicable to the
Account have been made, there remains outstanding any Conditional
Credit (as defined below) applicable to the Account or the amount of
immediately available funds in a given currency in such Account are
less than the aggregate purchase price in such currency of all
securities for which the Custodian has received Instructions to
settle on the Settlement Date, the Custodian, upon settlement, may
provisionally credit the Securities to the Account by making a
conditional entry on its books and records ("Conditional Credit"),
pending receipt of sufficient immediately available funds in the
relevant currency in the Account.
(c) If, within a reasonable time after the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds in the relevant currency at least equal
to the aggregate purchase price in such currency of all securities
subject to a Conditional Credit on a Settlement Date are deposited
into the Account, the Custodian shall make the Conditional Credit a
final entry on its books and records. In such case, the Customer
shall be liable to the Custodian only for late charges at a rate
which the Custodian customarily charges for similar extensions of
credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the resultant
Debit on a Settlement Date are not on deposit in the Account, or (ii)
any Proceeding shall occur, the Custodian may sell such of the
Securities subject to the Conditional Credit as it selects in its
sole discretion and shall apply the net proceeds of such sale to
cover such Debit, including related late charges, and any remaining
proceeds shall be credited to the Account. If such proceeds are
insufficient to satisfy such debt in full, the Customer shall
continue to be liable to the Custodian for any shortfall. The
Custodian shall make the Conditional Credit a final entry on its
books as to the Securities not required to be sold to satisfy such
Debit. Pending payment in full by the Customer of the purchase price
for Securities subject to a Conditional Credit, and the Custodian's
making a Conditional Credit a final entry on its books, the Customer
shall have no security entitlement and, unless consented to by the
Custodian, no right to give further Instructions in respect of
Securities subject to a Conditional Credit. The Custodian shall have
the sole discretion to determine which Securities shall be deemed to
have been paid for by the Customer out of funds available in the
Account. Any listing on a report to the Customer of Securities which
are subject to a Conditional Credit shall be deemed for informational
purposes only and such Securities shall not be deemed finally
credited to the Account; accordingly, such Conditional Credit may be
reversed (and any corresponding Debit shall be canceled) by the
Custodian unless and until the Custodian makes a final entry on its
books crediting such Securities to the Account. The term "Proceeding"
shall mean any insolvency, bankruptcy, receivership, reorganization
or similar proceeding relating to the Customer, whether voluntary or
involuntary.
(e) The Customer agrees that it will not intentionally use the Account to
facilitate the purchase of securities without sufficient funds in the
Account (which funds shall not include the expected proceeds of the
sale of the purchased securities).
14. Permitted Transactions. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon
Instructions in accordance Section 15 and only for the purposes
listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise become
payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed.
(h) In connection with any loans, but only against receipt of collateral
as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the
Custodian, a Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc., relating to compliance with
the rules of The Options Clearing Corporation, the Commodities
Futures Trading Commission 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
Customer.
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released
only upon payment to the Custodian of monies for the premium due and
a receipt for the Securities which are to be held in escrow. Upon
exercise of the option, or at expiration, the Custodian will receive
the Securities previously deposited from broker. The Custodian will
act strictly in accordance with Instructions in the delivery of
Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly
when due other than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related
transactions.
(n) Upon the termination of this Agreement as set forth in Section 21.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected.
15. Instructions. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which
have been received by the Custodian in accordance with Section 22
below (i) in writing (including, without limitation, facsimile
transmission) or by tested telex signed or given by such one or more
person or persons as the Customer shall have from time to time
authorized in writing to give the particular class of Instructions in
question and whose name and (if applicable) signature and office
address have been filed with the Custodian, or (ii) which have been
transmitted electronically through an electronic on-line service and
communications system offered by the Custodian or other electronic
instruction system acceptable to the Custodian, or (iii) a telephonic
or oral communication by one or more persons as the Customer shall
have from time to time authorized to give the particular class of
Instructions in question and whose name has been filed with the
Custodian; or (iv) upon receipt of such other form of instructions as
the Customer may from time to time authorize in writing and which the
Custodian has agreed in writing to accept. Instructions in the form
of oral communications shall be confirmed by the Customer by tested
telex or writing in the manner set forth in clause (i) above, but the
lack of such confirmation shall in no way affect any action taken by
the Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Instructions may relate to
specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on
file with the Custodian pursuant to this Section has been authorized
by the Customer to give the Instructions in question and that such
authorization has not been revoked. The Custodian may act upon and
conclusively rely on, without any liability to the Customer or any
other person or entity for any losses resulting therefrom, any
Instructions reasonably believed by it to be furnished by the proper
person or persons as provided above.
16. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained
in Instructions given to the Custodian which are not contrary to the
provisions of this Agreement. The Custodian will use reasonable care
with respect to the safekeeping of Property in the Account and,
except as otherwise expressly provided herein, in carrying out its
obligations under this Agreement. So long as and to the extent that
it has exercised reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless
in acting upon, and may conclusively rely on, without liability for
any loss resulting therefrom, any notice, request, consent,
certificate or other instrument reasonably believed by it to be
genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified
by the Customer for any losses, damages, costs and expenses
(including, without limitation, the fees and expenses of counsel)
incurred by the Custodian and arising out of action taken or omitted
with reasonable care by the Custodian hereunder or under any
Instructions. The Custodian shall be liable to the Customer for any
act or omission to act of any Subcustodian to the same extent as if
the Custodian committed such act itself. With respect to a Securities
System, the Custodian shall only be responsible or liable for losses
arising from employment of such Securities System caused by the
Custodian's own failure to exercise reasonable care. In the event of
any loss to the Customer by reason of the failure of the Custodian or
a Subcustodian to utilize reasonable care, the Custodian shall be
liable to the Customer to the extent of the Customer's actual damages
at the time such loss was discovered without reference to any special
conditions or circumstances. In no event shall the Custodian be
liable for any consequential or special damages. The Custodian shall
be entitled to rely, and may act, on advice of counsel (who may be
counsel for the Customer) on all matters and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer
shall be fully responsible for the security of the Customer's
connecting terminal, access thereto and the proper and authorized use
thereof and the initiation and application of continuing effective
safeguards with respect thereto and agree to defend and indemnify the
Custodian and hold the Custodian harmless from and against any and
all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any
improper or unauthorized use of such terminal by the Customer or by
any others.
All collections of funds or other property paid or distributed in
respect of Securities in the Account, including funds involved in
third-party foreign exchange transactions, shall be made at the risk
of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have
no liability for any loss occasioned by delay in the actual receipt
of notice by the Custodian or by a Subcustodian of any payment,
redemption or other transaction regarding Securities in the Account
in respect of which the Custodian has agreed to take action as
provided in Section 3 hereof. The Custodian shall not be liable for
any loss resulting from, or caused by, or resulting from acts of
governmental authorities (whether de jure or de facto), including,
without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations
in the value of currencies; changes in laws and regulations
applicable to the banking or securities industry; market conditions
that prevent the orderly execution of securities transactions or
affect the value of Property; acts of war, terrorism, insurrection or
revolution; strikes or work stoppages; the inability of a local
clearing and settlement system to settle transactions for reasons
beyond the control of the Custodian; hurricane, cyclone, earthquake,
volcanic eruption, nuclear fusion, fission or radioactivity, or other
acts of God.
The Custodian shall have no liability in respect of any loss, damage
or expense suffered by the Customer, insofar as such loss, damage or
expense arises from the performance of the Custodian's duties
hereunder by reason of the Custodian's reliance upon records that
were maintained for the Customer by entities other than the Custodian
prior to the Custodian's employment under this Agreement.
The provisions of this Section shall survive termination of this
Agreement.
17. Investment Limitations and Legal or Contractual Restrictions or
Regulations. The Custodian shall not be liable to the Customer and
the Customer agrees to indemnify the Custodian and its nominees, for
any loss, damage or expense suffered or incurred by the Custodian or
its nominees arising out of any violation of any investment
restriction or other restriction or limitation applicable to the
Customer pursuant to any contract or any law or regulation. The
provisions of this Section shall survive termination of this
Agreement.
18. Fees and Expenses. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and the Custodian's
reasonable out-of-pocket or incidental expenses in connection with
the performance of this Agreement, including (but without limitation)
legal fees as described herein and/or deemed necessary in the
judgment of the Custodian to keep safe or protect the Property in the
Account. The initial fee schedule is attached hereto as Exhibit B.
The Customer hereby agrees to hold the Custodian harmless from any
liability or loss resulting from any taxes or other governmental
charges, and any expense related thereto, which may be imposed, or
assessed with respect to any
Property in the Account and also agrees to hold the Custodian, its
Subcustodians, and their respective nominees harmless from any
liability as a record holder of Property in the Account. The
Custodian is authorized to charge the Account for such items and the
Custodian shall have a lien on the Property in the Account for any
amount payable to the Custodian under this Agreement, including but
not limited to amounts payable pursuant to Section 13 and pursuant to
indemnities granted by the Customer under this Agreement. The
provisions of this Section shall survive the termination of this
Agreement.
19. Tax Reclaims. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in the
Account, the Custodian shall perform such services with respect
thereto as are described in Exhibit C attached hereto and shall in
connection therewith be subject to the standard of care set forth in
such Exhibit C. Such standard of care shall not be affected by any
other term of this Agreement.
20. Amendment, Modifications, etc. No provision of this Agreement may be
amended, modified or waived except in a writing signed by the parties
hereto. No waiver of any provision hereto shall be deemed a
continuing waiver unless it is so designated. No failure or delay on
the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
21. Termination. This Agreement may be terminated by the Customer or the
Custodian by ninety (90) days' written notice to the other; provided
that notice by the Customer shall specify the names of the persons to
whom the Custodian shall deliver the Securities in the Account and to
whom the Cash in the Account shall be paid. If notice of termination
is given by the Custodian, the Customer shall, within ninety (90)
days following the giving of such notice, deliver to the Custodian a
written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities in the Account and to whom the
Cash in the Account shall be paid. In either case, the Custodian will
deliver such Securities and Cash to the persons so specified, after
deducting therefrom any amounts which the Custodian determines to be
owed to it under Sections 13, 18, and 23. In addition, the Custodian
may in its discretion withhold from such delivery such Cash and
Securities as may be necessary to settle transactions pending at the
time of such delivery. The Customer grants to the Custodian a lien
and right of setoff against the Account and all Property held therein
from time to time in the full amount of the foregoing obligations. If
within ninety (90) days following the giving of a notice of
termination by the Custodian, the Custodian does not receive from the
Customer a written notice specifying the names of the persons to whom
the Custodian shall deliver the Securities in the Account and to whom
the Cash in the Account shall be paid, the Custodian, at its
election, may deliver such Securities and pay such Cash to a bank or
trust company doing business in the State of New York to be held and
disposed of pursuant to the provisions of this Agreement, or may
continue to hold such Securities and Cash until a written notice as
aforesaid is delivered to the Custodian, provided that the
Custodian's obligations shall be limited to safekeeping.
22. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or
notices in connection herewith (a) shall be in writing, hand
delivered or sent by registered mail, telex or facsimile addressed to
such other address as shall have been furnished by the receiving
party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the
proper number and acknowledged by a proper answerback.
23. Security for Payment. To secure payment of all obligations due
hereunder, the Customer hereby grants to Custodian a continuing
security interest in and right of setoff against the Account and all
Property held therein from time to time in the full amount of such
obligations. Should the Customer fail to pay promptly any amounts
owed hereunder, Custodian shall be entitled to use available Cash in
the Account, and to dispose of Securities in the Account as is
necessary. In any such case and without limiting the foregoing,
Custodian shall be entitled to take such other action(s) or exercise
such other options, powers and rights as Custodian now or hereafter
has as a secured creditor under the New York Uniform Commercial Code
or any other applicable law.
24. Representations and Warranties.
(a) The Customer hereby represents and warrants to the Custodian
that:
(i) the employment of the Custodian and the allocation of fees,
expenses and other charges to the Account as herein provided, is not
prohibited by law or any governing documents or contracts to which
the Customer is subject;
(ii) the terms of this Agreement do not violate any obligation by
which the Customer is bound, whether arising by contract, operation
of law or otherwise;
(iii) this Agreement has been duly authorized by appropriate action
and when executed and delivered will be binding upon the Customer in
accordance with its terms; and
(iv) it will deliver to the Custodian a duly executed Secretary's
Certificate in the form of Exhibit D attached hereto or such other
evidence of such authorization as the Custodian may reasonably
require, whether by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer
that:
(i) the terms of this Agreement do not violate any obligation by
which the Custodian is bound, whether arising by contract, operation
of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate action
and when executed and delivered will be binding upon the Custodian in
accordance with its terms;
(iii) the Custodian will deliver to the Customer such evidence of
such authorization as the Customer may reasonably require, whether by
way of a certified resolution or otherwise; and
(iv) Custodian is qualified as a custodian under Section 26(a) of the
1940 Act and warrants that it will remain so qualified or upon
ceasing to be so qualified shall promptly notify the Customer in
writing.
25. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be
assignable by either party, but shall bind the successors in interest
of the Customer and the Custodian.
26. Publicity. Customer shall furnish to Custodian in accordance with
Section 22 above, prior to any distribution thereof, copies of any
material prepared for distribution to any persons who are not parties
hereto that refer in any way to the Custodian. Customer shall not
distribute or permit the
distribution of such materials if Custodian reasonably objects in
writing within ten (10) business days of receipt thereof (or such
other time as may be mutually agreed) after receipt thereof. The
provisions of this Section shall survive the termination of this
Agreement.
27. Submission to Jurisdiction. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court
sitting in the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of
America, and the Customer irrevocably submits to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding
and waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding brought in such a court and any claim that
such suit, action or proceeding was brought in an inconvenient forum.
28. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This
Agreement shall become effective when one or more counterparts have
been signed and delivered by each of the parties hereto.
29. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all
information provided by each party to the other regarding its
business and operations. All confidential information provided by a
party hereto shall be used by any other party hereto solely for the
purpose of rendering services pursuant to this Agreement and, except
as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter
becomes publicly available other than through a breach of this
Agreement, or that is required or requested to be disclosed by any
bank or other regulatory examiner of the Custodian, Customer, or any
Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation.
30. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable, such determination shall not affect the
validity or enforceability of any other provision of this Agreement.
31. Headings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this
Agreement.
ISI STRATEGY FUND, INC.
By: /s/Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Title: Vice President
--------------------------
BANKERS TRUST COMPANY
By: /s/Xxxxxxxx Xxxxxxxxx III
--------------------------
Name: Xxxxxxxx Xxxxxxxxx III
--------------------------
Title: Vice President
--------------------------
EXHIBIT A
To Custodian Agreement dated as of the 11th day of August, 1997
between Bankers Trust Company and ISI Strategy Fund, Inc.
PROXY SERVICE
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used
herein as defined terms shall have the meanings ascribed to them
therein unless otherwise defined below.
The Custodian provides a service, described below, for the
transmission of corporate communications in connection with
shareholder meetings relating to Securities held in Argentina,
Australia, Austria, Canada, Denmark, Finland, France, Germany,
Greece, Hong Kong, Indonesia, Ireland, Italy, Japan, Korea, Malaysia,
Mexico, Netherlands, New Zealand, Pakistan, Poland, Singapore, South
Africa, Spain, Sri Lanka, Sweden, United Kingdom, United States, and
Venezuela. For the United States and Canada, the term "corporate
communications" means the proxy statements or meeting agenda, proxy
cards, annual reports and any other meeting materials received by the
Custodian. For countries other than the United States and Canada, the
term "corporate communications" means the meeting agenda only and
does not include any meeting circulars, proxy statements or any other
corporate communications furnished by the issuer in connection with
such meeting. Non-meeting related corporate communications are not
included in the transmission service to be provided by the Custodian
except upon request as provided below.
The Custodian's process for transmitting and translating meeting
agendas will be as follows:
1) If the meeting agenda is not provided by the issuer in the English
language, and if the language of such agenda is in the official
language of the country in which the related security is held, the
Custodian will as soon as practicable after receipt of the original
meeting agenda by a Subcustodian provide an English translation
prepared by that Subcustodian.
2) If an English translation of the meeting agenda is furnished, the
local language agenda will not be furnished unless requested.
Translations will be free translations and neither the Custodian nor
any Subcustodian will be liable or held responsible for the accuracy
thereof or any direct or indirect consequences arising therefrom,
including without limitation arising out of any action taken or
omitted to be taken based thereon.
If requested, the Custodian will, on a reasonable efforts basis,
endeavor to obtain any additional corporate communication such as
annual or interim reports, proxy statements, meeting circulars, or
local language agendas, and provide them in the form obtained.
Timing in the voting process is important and, in that regard, upon
receipt by the Custodian of notice from a Subcustodian, the Custodian
will provide a notice to the Customer
indicating the deadline for receipt of its instructions to enable the
voting process to take place effectively and efficiently. As voting
procedures will vary from market to market, attention to any required
procedures will be very important. Upon timely receipt of voting
instructions, the Custodian will promptly forward such instructions
to the applicable Subcustodian. If voting instructions are not timely
received, the Custodian shall have no liability or obligation to take
any action.
For Securities held in markets other than those set forth in the
first paragraph, the Custodian will not furnish the material
described above or seek voting instructions. However, if requested to
exercise voting rights at a specific meeting, the Custodian will
endeavor to do so on a reasonable efforts basis without any assurance
that such rights will be so exercised at such meeting.
If the Custodian or any Subcustodian incurs extraordinary expenses in
exercising voting rights related to any Securities pursuant to
appropriate instructions or direction (e.g., by way of illustration
only and not by way of limitation, physical presence is required at a
meeting and/or travel expenses are incurred), such expenses will be
reimbursed out of the Account unless other arrangements have been
made for such reimbursement.
It is the intent of the Custodian to expand the Proxy Service to
include jurisdictions which are not currently included as set forth
in the second paragraph hereof. The Custodian will notify the
Customer as to the inclusion of additional countries or deletion of
existing countries after their inclusion or deletion and this Exhibit
A will be deemed to be automatically amended to include or delete
such countries as the case may be.
EXHIBIT B
To Custodian Agreement dated as of 11th day of August, 1997 between
Bankers Trust Company and ISI Strategy Fund, Inc.
CUSTODY FEE SCHEDULE
--------------------
ANNUAL ASSET FEE (BY FUND- EXCEPT CASH RESERVE)
Market Value Basis Point
$0 - $50 million 1.75
$50 million - $100 million 1.50
Over $100 million 1.00
ANNUAL ASSET FEE (CASH RESERVE FUND)
Market Value Basis Point
$0 - $1 billion 1.50
$1 billion - $4 billion 1.00
Over $4 billion 0.70
TRANSACTION FEES
==============================================================================
TRANSACTION TYPE $USD
=========================================== ==================================
AUTOMATED DEPOSITORY: DTC/PTC/FED 10.00
=========================================== ==================================
MANUAL DEPOSITORY: DTC/PTC/ FED 15.00
=========================================== ==================================
PHYSICAL AUTOMATED 15.00
=========================================== ==================================
PHYSICAL MANUAL 20.00
=========================================== ==================================
REPOS 15.00
=========================================== ==================================
P&I PAYMENTS 5.00
=========================================== ==================================
REDEMPTIONS 10.00
=========================================== ==================================
=========================================== ==================================
REORGANIZATIONS Included in safekeeping charge
=========================================== ==================================
OUTGOING WIRES (USD) 6.00
=========================================== ==================================
INCOMING WIRES (USD) No Charge
=========================================== ==================================
INTERNAL CASH TRANSFERS No Charge
=========================================== ==================================
GLOBAL CUSTODY FEES
COUNTRY Annual Asset Fee Transaction Fees
Canada 2 20
Mexico 5 30
Switzerland 2 50
NOTES
1 Market Values will be provided by the Fund Accountant at
month-end to determine monthly average assets for billing
purposes
1 A manual transaction is an instruction that is received in
writing, i.e. facsimile
2 Bankers Trust will be responsible for the affirmation of
DTC trades
3 Fees are billed monthly in arrears The standard Global
Custody service includes: asset safekeeping, trade
settlement, income collection, corporate action processing
(including proxy voting) and tax reclaims (where
appropriate refer to policy statements for further
clarification)
4 Third party FX transactions and other cash movements with
no associated security transaction (e.g. free
payments/receipts) are charged at $10 per U.S. wire and
$25 per non U.S. wire. No fee is levied for FX
transactions executed with Bankers Trust.
This Exhibit B shall be amended upon delivery by the Custodian of a new
Exhibit B to the Customer and acceptance thereof by the Customer and shall be
effective as of the date of acceptance by the Customer or a date agreed upon
between the Custodian and the Customer.
EXHIBIT C
To Custodian Agreement dated as of 11th day of August, 1997 between
Bankers Trust Company and ISI Strategy Fund, Inc..
TAX RECLAIMS
------------
Pursuant to Section 18 of the above referred to Custodian Agreement, the
Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in the Account.
Terms used herein as defined terms shall unless otherwise defined have the
meanings ascribed to them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue on a reasonable
efforts basis the reclaim process, provided that the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer
and advise what documentation, if any, is required to obtain the exemption.
Upon receipt of such documentation from the Customer, the Custodian will file
for exemption on the Customer's behalf and notify the Customer when it has
been obtained.
In connection with providing the foregoing service, the Custodian shall be
entitled to apply categorical treatment of the Customer according to the
Customer's nationality, the particulars of its organization and other relevant
details that shall be supplied by the Customer. It shall be the duty of the
Customer to inform the Custodian of any change in the organization, domicile
or other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a part under general laws and
treaty provisions. The Custodian may rely on any such information provided by
the Customer.
In connection with providing the foregoing service, the Custodian may also
rely on professional tax services published by a major international
accounting firm and/or advice received from a Subcustodian in the
jurisdictions in question. In addition, the Custodian may seek the advice of
counsel or other professional tax advisers in such jurisdictions. The
Custodian is entitled to rely, and may act, on information set forth in such
services and on advice received from a Subcustodian, counsel or other
professional tax advisers and shall be without liability to the Customer for
any action reasonably taken or omitted pursuant to information contained in
such services or such advice.
- -
EXHIBIT D
ISI STRATEGY FUND, INC.
Certificate of the Secretary
----------------------------
I, __________[Name of Secretary], hereby certify that I am the
Secretary of ISI STRATEGY FUND, INC. a ______________________[type of entity]
organized under the laws of ________________________[jurisdiction] (the
"Customer"), and as such I am duly authorized to, and do hereby, certify that:
1. Good Standing. The Customer's organizational documents,
and all amendments thereto, have been filed with the appropriate governmental
officials of _____________________[jurisdiction], the Customer continues to be
in existence and is in good standing, and no action has been taken to repeal
such organizational documents, the same being in full force and effect on the
date hereof.
2. Organizational Documents. The Customer's [name of
organizational documents -i.e., Bylaws, Articles of Incorporation, etc.] have
been duly adopted and no action has been taken to repeal such [name of
organizational documents], the same being in full force and effect.
3. Resolutions. Resolutions have been duly adopted on behalf
of the Customer, which resolutions (i) have not in any way been revoked or
rescinded, (ii) have been in full force and effect since their adoption, to
and including the date hereof, and are now in full force and effect, and (iii)
are the only corporate proceedings of the Customer now in force relating to or
affecting the matters referred to therein, including, without limitation,
confirming that the Customer is duly authorized to appoint Bankers Trust
Company as Custodian of assets delivered to it by the Customer and enter into
a certain custody agreement with Bankers Trust Company (the "Agreement")
setting forth the terms and conditions of such appointment, and that certain
designated officers, including those identified in paragraph 4 of this
Certificate, are authorized to (a) execute said Agreement in such form as the
officers executing the same have approved, such approval to be conclusively
evidenced by their execution and delivery thereof, and (b) execute any
instructions in connection with the Agreement, in conformity with the
requirements of the Customer's [name of organizational documents], and other
pertinent documents to which the Customer may be bound.
4. Incumbency. The following named individuals are duly
elected (or appointed), qualified and acting officers of the Customer holding
those offices set forth opposite their respective names as of the date hereof,
each having full authority, acting individually, to bind the Customer, as a
legal matter, with respect to all matters pertaining to the Agreement, and to
execute and deliver said Agreement on behalf of the Customer, and the
signatures set forth opposite the respective names and titles of said officers
are their true, authentic signatures:
Name Title Signature
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
IN WITNESS WHEREOF, I have hereunto set my hand this 11th
day of August, 1997.
By: __________________________________
Name: __________________________________
Title: Secretary
I, __________________________[Name of Confirming Officer],
__________________[Title] of the Customer, hereby certify that on this ___ day
of _______________[Date], 19__, _____________________[NAME OF SECRETARY] is
the duly elected Secretary of the Customer and that the signature above is
his/her genuine signature.
By:_________________________________
Name:_______________________________
Title:________________________________
- -
EXHIBIT E
CASH MANAGEMENT ADDENDUM (this "Addendum") to the CUSTODIAN
AGREEMENT (the "Agreement") between BANKERS TRUST COMPANY (the "Custodian")
and ISI STRATEGY FUND, INC. (the "Customer").
WHEREAS, the Custodian will provide cash management services
to the Customer, and the Custodian and the Customer desire to confirm their
understanding with respect to such services;
NOW, THEREFORE, the Custodian and the Customer agree as
follows:
1. Until the Custodian receives Instructions to the
contrary, the Custodian will hold all Cash received for the Account in deposit
accounts maintained with Subcustodians for the benefit of the Custodian's
clients, will credit to the Account interest on such Cash at rates and times
the Custodian shall from time to time determine and will receive compensation
therefor out of any amounts paid by Subcustodians in respect of such Cash.
2. To the extent the Custodian may from time to time inform
the Customer with respect to one or more currencies, the Custodian will sweep
Cash in such currencies to deposit accounts maintained with one or more
Subcustodians until the Custodian notifies the Customer otherwise or receives
Instructions to the contrary.
3. The Customer acknowledges that it has received and
reviewed the current policies of the Custodian regarding cash management
services, which are attached to this Addendum.
4. Capitalized terms used but not defined in this Addendum
are used with the respective meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of
the date of the Agreement.
BANKERS TRUST COMPANY
By:/s/Xxxxxxxx Xxxxxxxxx III
----------------------------
Name: Xxxxxxxx Xxxxxxxxx III
----------------------------
Title: Vice President
----------------------------
ISI STRATEGY FUND, INC.
By: /s/Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: Vice President
----------------------------
Cash Management Program -- Global Custody
Bankers Trust Company ("BT" or "we") currently pays interest on uninvested
cash balances in the currencies listed below. For each of those currencies,
the interest rate we pay is based on the rate paid by our London branch or the
local subcustodian on overnight deposits in the currency. In either case,
interest is calculated by using a weekly or monthly average of the overnight
rate and subtracting a spread. The current spreads are listed beside each
currency below.
Currencies Rates
---------- -----
Austrian Xxxxxxxxx* Base Rate less 250 basis points
British Pound Sterling* Base Rate less 250 basis points
Deutsche Xxxx* Base Rate less 250 basis points
Dutch Guilder* Base Rate less 250 basis points
French Franc* Base Rate less 250 basis points
U.S. Dollar* Base Rate less 250 basis points
Argentine Peso Base Rate less 150 basis points
Australian Dollar* Base Rate less 250 basis points
Belgian Franc* Base Rate less 250 basis points
Canadian Dollar* Base Rate less 250 basis points
Czech Koruna Base Rate less 150 basis points
Danish Krone* Base Rate less 250 basis points
European Currency Unit* Base Rate less 250 basis points
Finnish Markka* Base Rate less 250 basis points
Greek Drachma Base Rate less 150 basis points
Hong Kong Dollar* Base Rate less 250 basis points
Hungarian Forint Base Rate less 150 basis points
Indonesian Rupiah Base Rate less 150 basis points
Irish Punt* Base Rate less 250 basis points
Israeli Shekel Base Rate less 150 basis points
Italian Lira* Base Rate less 250 basis points
Japanese Yen Base Rate less 150 basis points
Korean Won Base Rate less 150 basis points
Malaysian Ringgit Base Rate less 150 basis points
New Taiwan Dollar Base Rate less 150 basis points
New Zealand Dollar* Base Rate less 250 basis points
Norwegian Krone Base Rate less 150 basis points
Philippine Peso Base Rate less 150 basis points
Polish Zloty Base Rate less 150 basis points
Portuguese Escudo* Base Rate less 000 xxxxx xxxxxx
Xxxxxxxxx Dollar Base Rate less 150 basis points
Slovak Koruna Base Rate less 150 basis points
South African Rand* Base Rate less 250 basis points
Spanish Peseta* Base Rate less 250 basis points
Swedish Krona* Base Rate less 250 basis points
Swiss Franc* Base Rate less 250 basis points
Thai Baht Base Rate less 150 basis points
- -
Turkish Lira Base Rate less 150 basis points
-----------------------
*
Denotes currencies that are part of BT's overnight sweep program.
Operationally, most balances in these currencies are swept overnight
into deposits at BT's London branch.
BT reserves the right, in its sole discretion, to adjust the spread charged on
these currencies at any time and for any reason. In most situations, we will
notify you beforehand (generally by Global Custody Flash Notice and in
writing), unless the adjustment is temporary or due to certain conditions
beyond our control. Such conditions may include any or all of the following:
account balance volatility, interest rate and foreign exchange volatility,
market volatility or other applicable conditions affecting accounts or
currencies generally or any specific account or currency in particular. In the
aforementioned circumstance, we will notify you promptly after the change in
spreads.
For each currency on which we pay interest:
o You will earn interest at the calculated rate on your entire
contractual balance without any action on your part and without any
minimum balance requirements. This is the case regardless of whether
we are able to invest your balances at or near the applicable base
rate and regardless of whether your contractual balance may exceed
your actual balance.
o The minimum rate paid will continue to be 0.50%, except for the
Japanese Yen and the Singapore Dollar. (This is also subject to
change as appropriate for any currency.)
o You will have continuous access through Globe*View, BTWorld, or
Globe*Link to the interest rate earned during the previous "rate
averaging period". Because we use weekly or monthly average rates to
calculate the interest you earn, we do not know the actual interest
rate until the weekly or monthly period is completed.
o For swept currencies, from time to time we may not be able to sweep
the full amount of your balances to our London branch because of
operational constraints or because your balance on a contractual
basis temporarily exceeds your actual balance. You will, however,
always receive credit for interest based on your entire contractual
balance. To the extent you would have earned a lower rate on balances
not swept, we will make up the difference. To the extent that actual
balances are higher than contractually posted balances due to
purchase fails, Bankers Trust Company will retain the interest earned
as compensation.
o The effective rate we pay on overnight balances will generally differ
from the effective rate we receive (whether from our London branch or
the local subcustodian). Any difference between the rate we receive
and the rate we pay (which may be positive or negative, but is
generally positive) is kept by us and covers our fee for running the
cash management program and the related costs we absorb.
Although currently most cash balances in our overnight sweep program are swept
into deposits at our London branch, Bankers Trust Company reserves the right
to utilize other branches or affiliates for its overnight sweep program.
As a reminder, overdrafts are not permitted in the normal course of business
in any currency. Should they occur, we will charge your account a penalty rate
of interest.
