EXHIBIT 2(j)
CUSTODY AGREEMENT
AGREEMENT, dated as of February 28, 2002 between UM Investment Trust, a
business trust organized and existing under the laws of the State of
Massachusetts having its principal office and place of business at 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 (the "Fund") and The Bank of New
York, a New York corporation authorized to do a banking business having its
principal office and place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "AUTHORIZED PERSON" shall be any person, whether or not an officer
or employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I or such other Certificate as may be received by Custodian from time
to time.
2. "BNY AFFILIATE" shall mean any office, branch or subsidiary of The
Bank of New York Company, Inc.
3. "BOOK-ENTRY SYSTEM" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
4. "BUSINESS DAY" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "CERTIFICATE" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
Custodian, which is actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
6. "COMPOSITE CURRENCY UNIT" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "DEPOSITORY" shall include (a) the Book-Entry System, (b) the
Depository Trust Company, (c) any other clearing agency or securities depository
registered with the U.S. Securities and Exchange Commission identified to the
Fund from time to time, and (d) the respective successors and nominees of the
foregoing.
8. "INSTRUCTIONS" shall mean communications transmitted by electronic
or telecommunications media, including S.W.I.F.T., computer-to-computer
interface, or dedicated transmission lines.
9. "ORAL INSTRUCTIONS" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
10. "SERIES" shall mean the various portfolios, if any, of the Fund
listed on Schedule II hereto, and if none are listed references to Series shall
be references to the Fund.
11. "U.S. SECURITIES" shall include, without limitation, any common
stock partnership interests, limited liability company interests and other
equity securities, bonds, debentures and other debt securities, notes, mortgages
or other obligations, and any instruments representing rights to receive,
purchase, or subscribe for the same, or representing any other rights or
interests therein (whether represented by a certificate or held in a Depository)
provided the same are primarily cleared and settled within the United States.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all U.S.
Securities and cash at any time delivered to Custodian during the term of this
Agreement, and authorizes Custodian to hold U.S. Securities in registered form
in its name or in the name of its nominees. Custodian hereby accepts such
appointment and agrees to establish and maintain one or more securities accounts
and cash accounts for each Series in which Custodian will hold U.S. Securities
and cash for such Series as provided herein. Custodian shall maintain books and
records segregating the assets of each Series from the assets of any other
Series. Such accounts (each, an "Account"; collectively, the "Accounts") shall
be in the name of the Fund.
(b) Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian may
agree upon (each a "Special Account"), and Custodian shall reflect therein such
assets as the Fund may specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, future commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian shall transfer to such accounts such U.S. Securities and money as the
Fund may specify in a Certificate or Instructions.
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2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Fund, approved by a resolution of its board, constitutes a
valid and legally binding obligation of the Fund, enforceable in accordance with
its terms, and there is no statute, regulation, rule, order or judgment binding
on it, and no provision of its charter or by-laws, nor of any mortgage,
indenture, credit agreement or other contract binding on it or affecting its
property, which would prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance
with all applicable laws and requirements, both state and federal, and has
obtained all regulatory licenses, approvals and consents necessary to carry on
its business as now conducted;
(d) It will not use the services provided by Custodian
hereunder in any manner that is, or will result in, a violation of any law, rule
or regulation applicable to the Fund;
(e) Its board has determined that use of each Depository which
Custodian is authorized to utilize in accordance with Section 1(a) of Article
III hereof, satisfies the applicable requirements of the Investment Company Act
of 1940, as amended (the "40 Act") and Rule 17f-4 thereunder;
(f) It is fully informed of the protections and risks
associated with various methods of transmitting Instructions and Oral
Instructions and delivering Certificates to Custodian, understands that there
may be more secure methods of transmitting or delivering the same than the
methods selected by the Fund, agrees that the security procedures (if any) to be
utilized provide a commercially reasonable degree of protection in light of its
particular needs and circumstances, and acknowledges and agrees that
Instructions need not be reviewed by Custodian, may conclusively be presumed by
Custodian to have been given by person(s) duly authorized, and may be acted upon
as given;
(g) It shall manage its borrowings, including, without
limitation, any advance or overdraft (including any day-light overdraft) in the
Accounts, so that the aggregate of its total borrowings for each Series does not
exceed the amount such Series is permitted to borrow under the `40 Act;
(h) Its transmission or giving of, and Custodian acting upon
and in reliance on, Certificates, Instructions, or Oral Instructions pursuant to
this Agreement shall at all times comply with the `40 Act;
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(i) It shall impose and maintain restrictions on the
destinations to which cash may be disbursed by Instructions from it to ensure
that each disbursement is for a proper purpose; and
(j) It has the right to make the pledge and grant the security
interest and security entitlement to Custodian contained in Section 1 of Article
V hereof, free of any right of redemption or prior claim of any other person or
entity, such pledge and such grants shall have a first priority subject to no
setoffs, counterclaims, or other liens or grants prior to or on a parity
therewith, and it shall take such additional steps as Custodian may reasonably
require to assure such priority.
3. The Fund hereby covenants that it shall from time to time complete
and execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or
successor form) whenever the Fund borrows from Custodian any money to be used
for the purchase or carrying of margin stock as defined in Federal Reserve
Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any U.S. Securities received by it from time to time for the Fund's
account. Custodian shall be entitled to utilize Depositories to the extent
possible in connection with its performance hereunder. U.S. Securities and cash
held in a Depository will be held subject to the rules, terms and conditions of
such entity. Unless otherwise required by local law or practice, U.S. Securities
deposited with a Depositary will be held in a commingled account, in the name of
Custodian, holding only U.S. Securities held by Custodian as custodian for its
customers. Custodian shall identify on its books and records the U.S. Securities
and cash belonging to the Fund, whether held directly or indirectly through
Depositories.
2. Custodian shall furnish the Fund with an advice of daily
transactions (including a confirmation of each transfer of U.S. Securities) and
a monthly summary of all transfers to or from the Accounts.
3. With respect to all U.S. Securities held hereunder, Custodian shall,
unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund
as promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all
U.S. Securities which may mature and advise the Fund as promptly as practicable
of any such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents
that it may actually receive from an issuer of U.S. Securities which, in the
opinion of Custodian, are intended for the beneficial owner of U.S. Securities;
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(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now or
hereafter in effect in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository all rights and similar
U.S. Securities issued with respect to any U.S. Securities credited to an
Account hereunder and shall promptly notify the Fund of each such issuance;
and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall promptly notify the Fund of rights or
discretionary actions with respect to U.S. Securities held hereunder, and of the
date or dates by which such rights must be exercised or such action must be
taken, provided that Custodian has actually received, from the issuer or the
relevant Depository or a nationally or internationally recognized bond or
corporate action service to which Custodian subscribes, timely notice of such
rights or discretionary corporate action or of the date or dates such rights
must be exercised or such action must be taken. Absent actual receipt of such
notice, Custodian shall have no liability for failing to so notify the Fund.
(b) Whenever U.S. Securities (including, but not limited to,
warrants, options, tenders, options to tender or non-mandatory puts or calls)
confer discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business Days
prior to the last scheduled date to act with respect to such U.S. Securities (or
such earlier date or time as Custodian may specify to the Fund reasonably in
advance thereof). Absent Custodian's timely receipt of such Certificate or
Instructions, Custodian shall not be liable for failure to take any action
relating to or to exercise any rights conferred by such U.S. Securities.
5. All voting rights with respect to U.S. Securities, however
registered, shall be exercised by the Fund or its designee. Custodian's only
duty in respect of voting rights shall be to mail to the Fund any documents
(including without limitation proxy statements, annual reports and signed
proxies) actually received by Custodian relating to the exercise of such voting
rights. The Fund shall be responsible for all costs associated with its use of
such services.
6. Custodian shall promptly advise the Fund upon Custodian's actual
receipt of notification of a partial redemption, partial payment or other action
affecting less than all U.S. Securities of a relevant class. If Custodian or any
Depository holds any U.S. Securities in which the Fund has an interest as part
of a fungible mass, Custodian or such Depository, as the case may be, may select
the U.S. Securities to participate in such partial redemption, partial payment
or other action in any non-discriminatory manner that it customarily uses to
make such selection.
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7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Fund in writing.
8. The Fund shall be liable for all taxes, assessments, duties and
other governmental charges, including any interest or penalty with respect
thereto ("Taxes"), with respect to any cash or U.S. Securities held on behalf of
the Fund or any transaction related thereto. The Fund shall indemnify Custodian
for the amount of any Tax that Custodian or any other withholding agent is
required under applicable laws (whether by assessment or otherwise) to pay on
behalf of, or in respect of, income earned by or payments or distributions made
to or for the account of the Fund (including any payment of Tax required by
reason of an earlier failure to withhold). Custodian shall, or shall instruct
the applicable withholding agent to, withhold the amount of any Tax which is
required to be withheld under applicable law upon collection of any dividend,
interest or other distribution made with respect to any U.S. Security and any
proceeds or income from the sale, loan or other transfer of any U.S. Security.
In the event that Custodian is required under applicable law to pay any Tax on
behalf of the Fund or a Series, Custodian is hereby authorized to withdraw cash
from any cash account of the Fund or such Series, as applicable, in the amount
required to pay such Tax and to use such cash, or to remit such cash to the
appropriate withholding agent, for the timely payment of such Tax in the manner
required by applicable law. If the aggregate amount of cash in all cash accounts
of the Fund or such Series, as applicable, is not sufficient to pay such Tax,
Custodian shall promptly notify the Fund of the additional amount of cash
required, and the Fund (on behalf of such Series, if applicable) shall directly
deposit such additional amount in the appropriate cash account promptly after
receipt of such notice, for use by Custodian as specified herein. If the Fund is
eligible, pursuant to applicable law, for a reduced rate of, or exemption from,
any Tax which is otherwise required to be withheld or paid on behalf of the Fund
under any applicable law, Custodian shall, or shall instruct the applicable
withholding agent to, either withhold or pay such Tax at such reduced rate or
refrain from withholding or paying such Tax, as appropriate; provided that
Custodian shall have received from the Fund all documentary evidence of
residence or other qualification for such reduced rate or exemption required to
be received under such applicable law. In the event that Custodian reasonably
believes that a reduced rate of, or exemption from, any Tax is obtainable only
by means of an application for refund, Custodian shall have no responsibility
for the accuracy or validity of any forms or documentation provided by the Fund
to Custodian hereunder. The Fund hereby agrees to indemnify and hold harmless
Custodian in respect of any liability arising from any underwithholding or
underpayment of any Tax which results from the inaccuracy or invalidity of any
such forms or other documentation, and such obligation to indemnify shall be a
continuing obligation of the Fund, its successors and assigns notwithstanding
the termination of this Agreement.
9. (a) For the purpose of settling U.S. Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean sufficient cash denominated in U.S. dollars to settle the
transaction. Custodian shall provide the Fund with immediately available funds
each day which result from the actual settlement of all sale transactions, based
upon advices received by
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Custodian from Depositories. Such funds shall be in U.S. dollars or such other
currency as the Fund may specify to Custodian.
(b) To the extent that Custodian has agreed to provide pricing
or other information services in connection with this Agreement, Custodian is
authorized to utilize any vendor (including brokers and dealers of U.S.
Securities) reasonably believed by Custodian to be reliable to provide such
information. The Fund understands that certain pricing information with respect
to complex financial instruments (e.g., derivatives) may be based on calculated
amounts rather than actual market transactions and may not reflect actual market
values, and that the variance between such calculated amounts and actual market
values may or may not be material. Where vendors do not provide information for
particular U.S. Securities or other property, an Authorized Person may advise
Custodian in a Certificate regarding the fair market value of, or provide other
information with respect to, such U.S. Securities or property as determined by
it in good faith. Custodian shall not be liable for any loss damage or expense
incurred as a result of errors or omissions with respect to any pricing or other
information utilized by Custodian hereunder.
10. Custodian shall promptly send to the Fund (a) any reports it
receives from a Depository on such Depository's system of internal accounting
control, and (b) such reports on its own system of internal accounting control
as the Fund may reasonably request from time to time.
11. Until such time as Custodian receives a certificate to the contrary
with respect to a particular U.S. Security, Custodian may release the identity
of the Fund to an issuer which requests such information pursuant to the
Shareholder Communications Act of 1985 for the specific purpose of direct
communications between such issuer and shareholder.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of U.S. Securities by the Fund,
the Fund shall deliver to Custodian a Certificate or Instructions, or with
respect to a purchase or sale of a U.S. Security generally required to be
settled on the same day the purchase or sale is made, Oral Instructions
specifying all information Custodian may reasonably request to settle such
purchase or sale. Custodian shall account for all purchases and sales of U.S.
Securities on the actual settlement date unless otherwise agreed by Fund.
2. The Fund understands that when Custodian is instructed to deliver
U.S. Securities against payment, delivery of such U.S. Securities and receipt of
payment therefor may not be completed simultaneously. Notwithstanding any
provision in this Agreement to the contrary, settlements, payments and
deliveries of U.S. Securities may be effected by Custodian in accordance with
the customary or established securities trading or securities processing
practices and procedures in the jurisdiction in which the transaction occurs,
including, without limitation, delivery to a purchaser or dealer therefor (or
agent) against receipt with the expectation of receiving later payment for such
U.S. Securities. The Fund assumes full responsibility for all
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risks, including, without limitation, credit risks, involved in connection with
such deliveries of U.S. Securities.
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of U.S. Securities or interest, dividends or
other distributions payable on U.S. Securities prior to its actual receipt of
final payment therefor. All such credits shall be conditional until Custodian's
actual receipt of final payment and may be reversed by Custodian to the extent
that final payment is not received. Custodian shall promptly notify the Fund of
any such reversal. Payment with respect to a transaction will not be "final"
until Custodian shall have received immediately available funds which under
applicable local law, rule and/or practice are irreversible and not subject to
any security interest, levy or other encumbrance, and which are specifically
applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf
of any Series which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Series shall be insufficient to pay the total amount payable upon a purchase of
U.S. Securities specifically allocated to such Series, as set forth in a
Certificate, Instructions or Oral Instructions, or if an overdraft arises in the
separate account of a Series for some other reason, including, without
limitation, because of a reversal of a conditional credit or the purchase of any
currency, or if the Fund is for any other reason indebted to Custodian with
respect to a Series, including any indebtedness to The Bank of New York under
the Fund's Cash Management and Related Services Agreement (except a borrowing
for investment or for temporary or emergency purposes using U.S. Securities as
collateral pursuant to a separate agreement and subject to the provisions of
Section 2 of this Article), such overdraft or indebtedness shall be deemed to be
a loan made by Custodian to the Fund for such Series payable on demand and shall
bear interest from the date incurred at a rate per annum ordinarily charged by
Custodian to its institutional customers, as such rate may be adjusted from time
to time. In addition, the Fund hereby agrees that Custodian shall to the maximum
extent permitted by law have a continuing lien, security interest, and security
entitlement in and to any property, including, without limitation, any
investment property or any financial asset, of such Series at any time held by
Custodian for the benefit of such Series or in which such Series may have an
interest which is then in Custodian's possession or control or in possession or
control of any third party acting in Custodian's behalf. The Fund authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Series' credit on Custodian's books.
2. If the Fund borrows money from any bank (including Custodian if the
borrowing is pursuant to a separate agreement) for investment or for temporary
or emergency purposes using U.S. Securities held by Custodian hereunder as
collateral for such borrowings, the Fund shall deliver to Custodian a
Certificate specifying with respect to each such borrowing: (a) the Series to
which such borrowing relates; (b) the name of the bank, (c) the amount of the
borrowing, (d) the time and date, if known, on which the loan is to be entered
into, (e) the total amount payable
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to the Fund on the borrowing date, (f) the U.S. Securities to be delivered as
collateral for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular U.S. Securities, and
(g) a statement specifying whether such loan is for investment purposes or for
temporary or emergency purposes and that such loan is in conformance with the
`40 Act and the Fund's prospectus. Custodian shall deliver on the borrowing date
specified in a Certificate the specified collateral against payment by the
lending bank of the total amount of the loan payable, provided that the same
conforms to the total amount payable as set forth in the Certificate. Custodian
may, at the option of the lending bank, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. Custodian shall deliver
such U.S. Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in this Section.
The Fund shall cause all U.S. Securities released from collateral status to be
returned directly to Custodian, and Custodian shall receive from time to time
such return of collateral as may be tendered to it. In the event that the Fund
fails to specify in a Certificate the Series, the name of the issuer, the title
and number of shares or the principal amount of any particular U.S. Securities
to be delivered as collateral by Custodian, Custodian shall not be under any
obligation to deliver any U.S. Securities.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund in
respect of a Series ("Shares") it shall deliver to Custodian a Certificate or
Instructions specifying the amount of money and/or U.S. Securities to be
received by Custodian for the sale of such Shares and specifically allocated to
an Account for such Series.
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian
to make payment out of the money held by Custodian hereunder in connection with
a redemption of any Shares, it shall furnish to Custodian a Certificate or
Instructions specifying the total amount to be paid for such Shares. Custodian
shall make payment of such total amount to the transfer agent specified in such
Certificate or Instructions out of the money held in an Account of the
appropriate Series.
4. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, Custodian, unless
otherwise instructed by a Certificate or Instructions, shall, upon presentment
of such check, charge the amount thereof against the money held in the Account
of the Series of the Shares being redeemed, provided, that if the Fund or its
agent timely advises Custodian that such check is not to be honored, Custodian
shall return such check unpaid.
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ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution
on Shares it shall furnish to Custodian Instructions or a Certificate setting
forth with respect to the Series specified therein the date of the declaration
of such dividend or distribution, the total amount payable, and the payment
date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the account of such Series the
total amount payable to the dividend agent of the Fund specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories, except to the extent such action
or inaction is a direct result of the Custodian's failure to fulfill its duties
hereunder. In no event shall Custodian be liable to the Fund or any third party
for special, indirect or consequential damages, or lost profits or loss of
business, arising in connection with this Agreement, nor shall BNY be liable:
(i) for acting in accordance with any Certificate or Oral Instructions actually
received by Custodian and reasonably believed by Custodian to have been given by
an Authorized Person; (ii) for acting in accordance with Instructions without
reviewing the same; (iii) for conclusively presuming that all Instructions are
given only by person(s) duly authorized; (iv) for conclusively presuming that
all disbursements of cash directed by the Fund, whether by a Certificate, an
Oral Instruction, or an Instruction, are in accordance with Section 2(i) of
Article II hereof; (iv) for any Losses due to forces beyond the control of
Custodian, including without limitation strikes and work stoppages outside of
Custodian, acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, or interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; (v) for
the insolvency of any Depository; or (vi) for any Losses arising from the
applicability of any law or regulation now or hereafter in effect.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms and conditions
as it deems necessary or appropriate to perform its services hereunder. No such
subcontract, agreement or understanding shall discharge Custodian from its
obligations hereunder.
(c) The Fund agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a successful
defense of claims by the Fund; provided however, that the Fund shall not
indemnify Custodian for any Losses
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arising out of Custodian's own negligence or willful misconduct. This indemnity
shall be a continuing obligation of the Fund, its successors and assigns,
notwithstanding the termination of this Agreement.
2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a
result of the receipt or acceptance of fraudulent, forged or invalid U.S.
Securities, or U.S. Securities which are otherwise not freely transferable or
deliverable without encumbrance in any relevant market;
(b) The validity of the issue of any U.S. Securities
purchased, sold, or written by or for the Fund, the legality of the purchase,
sale or writing thereof, or the propriety of the amount paid or received
therefor;
(c) The legality of the sale or redemption of any Shares, or
the propriety of the amount to be received or paid therefor;
(d) The legality of the declaration or payment of any dividend
or distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio U.S. Securities, nor
shall Custodian be under any duty or obligation to see to it that any cash or
collateral delivered to it by a broker, dealer or financial institution or held
by it at any time as a result of such loan of portfolio U.S. Securities is
adequate security for the Fund against any loss it might sustain as a result of
such loan, which duty or obligation shall be the sole responsibility of the
Fund. In addition, Custodian shall be under no duty or obligation to see that
any broker, dealer or financial institution to which portfolio U.S. Securities
of the Fund are lent makes payment to it of any dividends or interest which are
payable to or for the account of the Fund during the period of such loan or at
the termination of such loan, provided, however, that Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due;
(g) The sufficiency or value of any amounts of money and/or
U.S. Securities held in any Special Account in connection with transactions by
the Fund; whether any broker, dealer, futures commission merchant or clearing
member makes payment to the Fund of any variation margin payment or similar
payment which the Fund may be entitled to receive from such broker, dealer,
futures commission merchant or clearing member, or whether any payment received
by Custodian from any broker, dealer, futures commission merchant or clearing
member is the amount the Fund is entitled to receive, or to notify the Fund of
Custodian's receipt or non-receipt of any such payment; or
(h) Whether any U.S. Securities at any time delivered to, or
held by it for the account of the Fund and specifically allocated to a Series
are such as properly may be held by the Fund or such Series under the provisions
of its then current prospectus and statement of
-11-
additional information, or to ascertain whether any transactions by the Fund,
whether or not involving Custodian, are such transactions as may properly be
engaged in by the Fund.
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel of the Fund or outside
counsel of its own choosing and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such advice.
4. Custodian shall be under no obligation to take action to collect any
amount payable on U.S. Securities in default, or if payment is refused after due
demand and presentment, except that Custodian shall use reasonable efforts to
assist with such collections.
5. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any transactions
affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time. The Fund shall reimburse Custodian
for all costs associated with the conversion of the Fund's U.S. Securities
hereunder and the transfer of U.S. Securities and records kept in connection
with this Agreement, but only to the extent that such costs do not constitute
direct losses resulting from Custodian's negligence, willful misconduct or
failure to perform its duties hereunder. The Fund shall also reimburse Custodian
for out-of-pocket expenses which are a normal incident of the services provided
hereunder.
7. Custodian has the right to debit any cash account of the Fund or a
Series for any amount payable by the Fund or such Series, as applicable in
connection with any and all obligations of the Fund or such Series to Custodian.
In addition to the rights of Custodian under applicable law and other
agreements, at any time when the Fund shall not have honored any of its
obligations to Custodian, Custodian shall have the right without notice to the
Fund to retain or set-off, against such obligations of the Fund, any U.S.
Securities or cash Custodian or a BNY Affiliate may directly or indirectly hold
for the account of the Fund, and any obligations (whether matured or unmatured)
that Custodian or a BNY Affiliate may have to the Fund in any currency or
Composite Currency Unit. Any such asset of, or obligation to, the Fund may be
transferred to Custodian and any BNY Affiliate in order to effect the above
rights. Notwithstanding any other provision of this Agreement, Custodian hereby
acknowledges and agrees that the assets and obligations of each Series hereunder
shall be separate and distinct in all respects from those of every other Series,
and that in no event shall any assets of one Series be subject to any lien,
set-off or other form of attachment or seizure in respect of any obligation of
another Series.
8. The Fund agrees to forward to Custodian a Certificate or
Instructions confirming Oral Instructions by the close of business of the same
day that such Oral Instructions are given to Custodian. The Fund agrees that the
fact that such confirming Certificate or Instructions are not received or that a
contrary Certificate or contrary Instructions are received by Custodian shall in
no way affect the validity or enforceability of transactions authorized by such
Oral Instructions and effected by Custodian. If the Fund elects to transmit
Instructions through an on-line communications system offered by Custodian, the
Fund's use thereof shall be subject to the Terms and Conditions attached as
Appendix I hereto, and Custodian shall provide user and authorization
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codes, passwords and authentication keys only to an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
9. The books and records pertaining to the Fund which are in possession
of Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the `40 Act and the rules thereunder. The
Fund, or its authorized representatives, shall have access to such books and
records during Custodian's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Custodian to
the Fund or its authorized representative. Upon the reasonable request of the
Fund, Custodian shall provide in hard copy or on computer disc any records
included in any such delivery which are maintained by Custodian on a computer
disc, or are similarly maintained.
10. It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law, regulation or
rule now or hereafter in effect. The Custodian shall promptly notify the Fund
upon supplying any information regarding the Accounts to any third-party
pursuant to requirements under law. The Custodian shall provide the Fund with
any report obtained by the Custodian on the system of internal accounting
control of a Depository, and with such reports on its own system of internal
accounting control as the Fund may reasonably request from time to time.
11. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the board of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits. In the event such notice is given by Custodian, the Fund shall, on or
before the termination date, deliver to Custodian a copy of a resolution of the
board of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to the
successor custodian all U.S. Securities and money then owned by the Fund and
held by it as Custodian, after deducting all fees, expenses and other amounts
for the payment or reimbursement of which it shall then be entitled.
-13-
2. If a successor custodian is not designated by the Fund or Custodian
in accordance with the preceding Section, the Fund shall upon the date specified
in the notice of termination of this Agreement and upon the delivery by
Custodian of all U.S. Securities (other than U.S. Securities which cannot be
delivered to the Fund) and money then owned by the Fund be deemed to be its own
custodian and Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect to
U.S. Securities which cannot be delivered to the Fund to hold such U.S.
Securities hereunder in accordance with this Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Certificates or Oral Instructions of such present
Authorized Persons.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and received by it at its offices at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, or at such other place as the Fund may from time to
time designate in writing.
4. Each and every right granted to either party hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
by either party of any right preclude any other or future exercise thereof or
the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. This Agreement
shall extend to and shall be binding upon the parties hereto, and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and
-14-
Custodian hereby consent to the jurisdiction of a state or federal court
situated in New York City, New York in connection with any dispute arising
hereunder. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby irrevocably waives any and all rights
to trial by jury in any legal proceeding arising out of or relating to this
Agreement.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. The Fund is a business truly duly organized under the laws of The
Commonwealth of Massachusetts. It is expressly agreed that the obligations of
the Fund hereunder shall not be binding upon any of the Board of Trustees,
shareholders, nominees, officers, agents or employees of the Fund personally,
but shall bind only the property of each relevant Series. The execution and
delivery of this Agreement have been authorized by the Fund's Board of Trustees,
and this Agreement has been signed and delivered by an authorized officer of the
Trust, acting as such, and neither such authorization by the Board of Trustees
nor such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the property of the relevant Portfolio of the
Fund as provided in the Fund's Second Amended and Restated Agreement and
Declaration of Trust, as amended, which is on file with the Secretary of The
Commonwealth of Massachusetts.
-15-
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement
to be executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
*
By:
--------------------------------------
Title:
Tax Identification No:
THE BANK OF NEW YORK
By:
--------------------------------------
Title:
-16-
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(THE FUND - ORAL AND WRITTEN INSTRUCTIONS)
The undersigned hereby certifies that he/she is the duly elected and
acting ________________________ of * (the "Fund"), and further certifies that
the following officers or employees of the Fund have been duly authorized in
conformity with the Fund's Declaration of Trust and By-Laws to deliver
Certificates and Oral Instructions to The Bank of New York ("Custodian")
pursuant to the Custody Agreement between the Fund and Custodian dated
_______________, and that the signatures appearing opposite their names are true
and correct:
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
------------------------ ------------------------ ------------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you
may currently have on file.
[seal] By:
--------------------------------------
Title:
Date:
SCHEDULE II
SERIES
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person of the Fund of
software enabling the Fund to obtain access to the System (the "Software"),
Custodian grants to the Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Written
Instructions, receiving reports, making inquiries or otherwise communicating
with Custodian in connection with the Account(s). The Fund shall use the
Software solely for its own internal and proper business purposes and not in the
operation of a service bureau. Except as set forth herein, no license or right
of any kind is granted to the Fund with respect to the Software. The Fund
acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know-how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or other
statutory or legal protections available in respect thereof. The Fund further
acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by Custodian or its
suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall you attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy, sell,
lease or provide, directly or indirectly, any of the Software or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory copyright notice or other notice included
in the Software or on any media containing the Software. The Fund shall
reproduce any such notice on any reproduction of the Software and shall add any
statutory copyright notice or other notice to the Software or media upon
Custodian's request.
2. Equipment. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. Proprietary Information. The Software, any data base and any
proprietary data, processes, information and documentation made available to the
Fund (other than which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the "Information"),
are the exclusive and confidential property of Custodian or its suppliers. The
Fund shall keep the Information confidential by using the same care and
discretion that the Fund uses with respect to its own confidential
property and trade secrets, but not less than reasonable care. Any and all data
and information transmitted to Custodian (other than which are or become part of
the public domain or are legally required to be made available to the public)
are the exclusive and confidential property of the Fund. Custodian shall keep
all such data and information confidential, but may disclose the same to its
internal and external auditors, accountants and counsel, to its regulators, and
to any other person when it is advised by its counsel that it could be liable
for a failure to do so. Upon termination of the Agreement or the Software
license granted herein for any reason, the Fund shall return to Custodian any
and all copies of the Information which are in its possession or under its
control.
4. Modifications. Custodian reserves the right to modify the Software
from time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and whether
with or without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS
AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE
SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY
DATABASE ARE PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE
LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL,
WHICH THE FUND MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY
DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. WITH RESPECT TO THE SYSTEM, THE SOFTWARE, THE SERVICES OR ANY
DATABASE, IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD,
MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF
COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR
CAUSE BEYOND THEIR REASONABLE CONTROL.
6. Security; Reliance; Unauthorized Use. The Fund will cause all
persons utilizing the Software and System to treat all applicable user and
authorization codes, passwords and authentication keys with extreme care, and it
will establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Instructions received by it through the System. The Fund acknowledges that it is
its sole responsibility to assure that only persons duly authorized
use the System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. System Acknowledgments. Custodian shall acknowledge through the
System its receipt of each transmission communicated through the System, and in
the absence of such acknowledgment Custodian shall not be liable for any failure
to act in accordance with such transmission and the Fund may not claim that such
transmission was received by Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may not
be available for every communication through the System, or for all data. The
Fund agrees that Custodian may deactivate any encryption features at any time,
without notice or liability to the Fund, for the purpose of maintaining,
repairing or troubleshooting the System or the Software.
