EXHIBIT 99.(2)(j)
CUSTODY AGREEMENT WITH IBT
CUSTODIAN AGREEMENT
AGREEMENT made as of this 29th day of September 2004, between Boulder
Growth & Income Fund, Inc., a company organized under the laws of the state of
Maryland (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust
company (the "Bank").
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund and Bank are parties to an Administration Agreement and
Delegation Agreement of even date herewith (the "Administration Agreement" and
"Delegation Agreement");
WHEREAS, the Bank has at least the minimum qualifications required by
Section 17(f)(1) of the 1940 Act to act as custodian of the portfolio securities
and cash of the Fund;
WHEREAS, the Fund desires to place and maintain all of its portfolio
securities and cash in the custody of the Bank; and
WHEREAS, the Bank is willing to act as custodian for the Fund, subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as custodian
of its portfolio securities and cash delivered to the Bank as hereinafter
described and the Bank agrees to act as such upon the terms and conditions
hereinafter set forth. For the services rendered pursuant to this Agreement the
Fund agrees to pay to the Bank the fees set forth on Appendix A hereto.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of the Fund by
appropriate resolution of its Board, and set forth in a certificate as required
by Section 4 hereof.
2.2 Board. Board will mean the Board of Directors or the Board of Trustees
of the Fund, as the case may be.
2.3 Security. The term security as used herein will have the same meaning
assigned to such term in the Securities Act of 1933, as amended, including,
without limitation, any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any profit sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security," or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing, and
futures, forward contracts and options thereon.
2.4 Portfolio Security. Portfolio Security will mean any Security owned by
the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean The Depository Trust Company ("DTC"),
a clearing agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934 ("Exchange Act"), its
successor or successors and its nominee or nominees. The term "Depository" shall
further mean and include any other person authorized to act as a depository
under the 1940 Act, its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of the Board.
2.8 Proper Instructions. Proper Instructions shall mean (i) instructions
regarding the purchase or sale of Portfolio Securities, and payments and
deliveries in connection therewith, given by an Authorized Person, such
instructions to be given in such form and manner as the Bank and the Fund shall
agree upon from time to time, and (ii) instructions (which may be continuing
instructions) regarding other matters signed or initialed by an Authorized
Person. Oral instructions will be considered Proper Instructions if the Bank
reasonably believes them to have been given by an Authorized Person. The Fund
shall cause all oral instructions to be promptly confirmed in writing. The Bank
shall act upon and comply with any subsequent Proper Instruction which modifies
a prior instruction and the sole obligation of the Bank with respect to any
follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act, the Fund shall give the Bank specific Proper Instructions as to
the action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Board accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communication
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing that such procedures afford adequate
safeguards for the Fund's assets.
3. [RESERVED]
4. Certification as to Authorized Persons. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
(i) the names and signatures of the Authorized Persons and (ii) the names of the
members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or Assistant
Secretary of the Fund will sign a new or amended certification setting forth the
change and the new, additional or omitted names or signatures. The Bank will be
entitled to rely and act upon any Officers' Certificate given to it by the Fund
which has been signed by Authorized Persons named in the most recent
certification received by the Bank.
5. Custody of Cash. As custodian for the Fund, the Bank will open and
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit account
upon which the Bank reserves theright to require seven (7) days notice prior to
withdrawal of cash from such an account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for repurchases of outstanding shares of common stock of the Fund, notification
from the Fund's transfer agent as provided in Section 7, requesting such
payment, designating the payee or the account or accounts to which the Bank will
release funds for deposit, and stating that it is for a purpose permitted under
the terms of this Section 5, specifying the applicable subsection, the Bank will
make payments of cash held for the accounts of the Fund, insofar as funds are
available for that purpose, only as permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for the Fund,
against contemporaneous receipt of such securities by the Bank or against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs followed by U.S. registered investment
companies in the jurisdiction or market in which the transaction occurs
registered in the name of the Fund or in the name of, or properly endorsed and
in form for transfer to, the Bank, or a nominee of the Bank, or receipt for the
account of the Bank pursuant to the provisions of Section 6 below, each such
payment to be made at the purchase price shown on a broker's confirmation (or
transaction report in the case of Book Entry Paper (as that term is defined in
Section 6.6 hereof)) of purchase of the securities received by the Bank before
such payment is made, as confirmed in the Proper Instructions received by the
Bank before such payment is made.
5.2 [RESERVED]
5.3 Distributions and Expenses of the Fund. For the payment on the account
of the Fund of dividends or other distributions to shareholders (including
holders of the Fund's preferred stock, if any) as may from time to time be
declared by the Board, interest, taxes, management or administration fees,
distribution fees, fees of the Bank for its services hereunder and reimbursement
of the expenses and liabilities of the Bank as provided herein or as approved by
the Funds, fees of any transfer agent, fees and expenses for the Board, fees for
legal, accounting, and auditing services, exchange listing fees, or other
operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection with the
conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Fund, but, in
the case of final payment, only upon redelivery to the Bank of any Portfolio
Securities pledged or hypothecated therefor and upon surrender of documents
evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for the
purpose of collateralizing the obligation to return to the Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery (collectively, "Foreign Exchange Agreements") which may be entered
into by the Bank on behalf of the Fund upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or
banking institution (which may be the Bank, or any other subcustodian or
agent hereunder, acting as principal) with which the contract or option is
made, and the Bank shall have no duty with respect to the selection of such
currency brokers or banking institutions with which the Fund deals or for
their failure to comply with the terms of any contract or option.
(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to
Proper Instructions, the Fund agrees that the Bank shall have a continuing
lien and security interest, to the extent of any payment due under any
Foreign Exchange Agreement, in and to any property at any time held by the
Bank for the Fund's benefit and which is then in the Bank's possession or
control (or in the possession or control of any third party acting on the
Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of
the Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of the
Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper corporate purpose.
5.9 Termination. Upon the termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided herein,
and except for securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will
receive and hold pursuant to the provisions hereof, in a separate account
or accounts and physically segregated at all times from those of other
persons, any and all Portfolio Securities which may now or hereafter be
delivered to it by or for the account of the Fund. All such Portfolio
Securities will be held or disposed of by the Bank for, and subject at all
times to the instructions of, the Fund pursuant to the terms of this
Agreement. Subject to the specific provisions herein relating to Portfolio
Securities that are not physically held by the Bank, the Bank will register
all Portfolio Securities (unless otherwise directed by Proper Instructions
or an Officers' Certificate), in the name of a registered nominee of the
Bank as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, and will execute and deliver all
such certificates in connection therewith as may be required by such laws
or regulations or under the laws of any state. The Fund will from time to
time furnish to the Bank appropriate instruments to enable it to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee, any Portfolio Securities which may from time to time be
registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper Instructions or an Officers' Certificate. The Bank
will promptly forward and, where appropriate, execute and deliver, or cause
to be executed and delivered, to the Fund all notices, proxies and proxy
soliciting materials delivered to the Bank with respect to such Securities,
such proxies to be executed by the registered holder of such Securities (if
registered otherwise than in the name of the Fund), but without indicating
the manner in which such proxies are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that an
issuer of any Portfolio Security has taken or intends to take a corporate
action (a "Corporate Action") that affects the rights, privileges, powers,
preferences, qualifications or ownership of a Portfolio Security, including
without limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or
stock dividend, which Corporate Action requires an affirmative response or
action on the part of the holder of such Portfolio Security (a "Response"),
the Bank shall notify the Fund promptly of the Corporate Action, the
Response required in connection with the Corporate Action and the Bank's
deadline for receipt from the Fund of Proper Instructions regarding the
Response (the "Response Deadline"). The Bank shall forward to the Fund via
telecopier and/or overnight courier all notices, information statements or
other materials relating to the Corporate Action promptly after receipt of
such materials by the Bank.
(a) The Bank shall act upon a required Response only after
receipt by the Bank of Proper Instructions from the Fund no later than
5:00 p.m. on the date specified as the Response Deadline and only if
the Bank (or its agent or subcustodian hereunder) has actual
possession of all necessary Securities, consents and other materials
no later than 5:00 p.m. on the date specified as the Response
Deadline.
(b) The Bank shall have no duty to act upon a required Response
if Proper Instructions relating to such Response and all necessary
Securities, consents and other materials are not received by and in
the possession of the Bank no later than 5:00 p.m. on the date
specified as the Response Deadline. Notwithstanding, the Bank may, in
its sole discretion, use its best efforts to act upon a Response for
which Proper Instructions and/or necessary Securities, consents or
other materials are received by the Bank after 5:00 p.m. on the date
specified as the Response Deadline, it being acknowledged and agreed
by the parties that any undertaking by the Bank to use its best
efforts in such circumstances shall in no way create any duty upon the
Bank to complete such Response prior to its expiration.
(c) In the event that the Fund notifies the Bank of a Corporate
Action requiring a Response and the Bank has received no other notice
of such Corporate Action, the Response Deadline shall be 48 hours
prior to the Response expiration time set by the depository processing
such Corporate Action.
(d) Section 14.3(c) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by an Eligible
Foreign Sub-Custodian (as defined below).
6.4 Book-Entry System. Provided (i) the Bank has received a certified
copy of a resolution of the Board specifically approving deposits of Fund
assets in the Book-Entry System, and (ii) for any subsequent changes to
such arrangements following such approval, the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an
account ("Account") of the Bank (or its agent) in such System which
shall not include any assets of the Bank (or such agent) other than
assets held as a fiduciary, custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to
the Fund's participation in the Book-Entry System through the Bank (or
any such agent) will identify by book entry the Portfolio Securities
which are included with other securities deposited in the Account and
shall at all times during the regular business hours of the Bank (or
such agent) be open for inspection by duly authorized officers,
employees or agents of the Fund. Where securities are transferred to
the Fund's account, the Bank shall also, by book entry or otherwise,
identify as belonging to the Fund a quantity of securities in a
fungible bulk of securities (i) registered in the name of the Bank or
its nominee, or (ii) shown on the Bank's account on the books of the
Federal Reserve Bank;
(c) The Bank (or its agent) shall pay for securities purchased
for the account of the Fund or shall pay cash collateral against the
return of Portfolio Securities loaned by the Fund upon:
(i) receipt of advice from the Book-Entry System that such
Securities have been transferred to the Account,and
(ii) the making of an entry on the records of the Bank (or
its agent) to reflect such payment and transfer for the account
of the Fund. The Bank (or its agent) shall transfer securities
sold or loaned for the account of the Fund upon:
(d) The Bank will promptly provide the Fund with any report
obtained by the Bank or its agent on the Book-Entry System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Book-Entry System;
6.5 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits
in DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved
the arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities
including stock dividends, rights and other items of like nature, and
to receive and remit to the Bank on behalf of the Fund all income and
other payments thereon and to take all steps necessary and proper in
connection with the collection thereof;
(b) Registration of Portfolio Securities may be made in the name
of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made through
the clearing medium employed by such Depository for transactions of
participants acting through it. Upon any purchase of Portfolio
Securities, payment will be made only upon delivery of the securities
to or for the account of the Fund and the Fund shall pay cash
collateral against the return of Portfolio Securities loaned by the
Fund only upon delivery of the Securities to or for the account of the
Fund; and upon any sale of Portfolio Securities, delivery of the
Securities will be made only against payment therefor or, in the event
Portfolio Securities are loaned, delivery of Securities will be made
only against receipt of the initial cash collateral to or for the
account of the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security
is lost, destroyed, wrongfully taken or otherwise not available
to be returned to the Bank upon its request;
(ii) Proxy materials received by a Depository with respect
to Portfolio Securities deposited with such Depository are
forwarded immediately to the Bank for prompt transmittal to the
Fund;
(iii) Such Depository promptly forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and
of the appropriate book entry made by such Depository to the
Fund's account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations
and duties hereunder as may be necessary for the Fund to comply
with the recordkeeping requirements of Section 31(a) of the 1940
Act and Rule 31(a) thereunder; and
(v) Such Depository delivers to the Bank all internal
accounting control reports, whether or not audited by an
independent public accountant, as well as such other reports as
the Fund may reasonably request in order to verify the Portfolio
Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
Bank has received a certified copy of a resolution of the Board
specifically approving participation in a system maintained by the Bank for
the holding of commercial paper in book-entry form ("Book-Entry Paper") and
(ii) for each year following such approval the Board has received and
approved the arrangements, upon receipt of Proper Instructions and upon
receipt of confirmation from an Issuer (as defined below) that the Fund has
purchased such Issuer's Book-Entry Paper, the Bank shall hold in book-entry
form, on behalf of the Fund, commercial paper issued by issuers with whom
the Bank has entered into a book-entry agreement (the "Issuers"). In
maintaining procedures for Book-Entry Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by the Fund
in an account of the Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect to the Fund's purchase
of Book-Entry paper through the Bank will identify, by book-entry,
commercial paper belonging to the Fund which is included in the
Book-Entry System and shall at all times during the regular business
hours of the Bank be open for inspection by duly authorized officers,
employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry Paper purchased for the
account of the Fund upon contemporaneous (i) receipt of advice from
the Issuer that such sale of Book-Entry Paper has been effected, and
(ii) the making of an entry on the records of the Bank to reflect such
payment and transfer for the account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper obligation upon
the maturity thereof upon contemporaneous (i) receipt of advice that
payment for such Book-Entry Paper has been transferred to the Fund,
and (ii) making of an entry on the records of the Bank to reflect such
payment for the account of the Fund; and
(e) The Bank will send to the Fund such reports on its system of
internal accounting control with respect to the Book-Entry Paper as
the Fund may reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has received
a certified copy of a resolution of the Board specifically approving the
maintenance of Portfolio Securities in an immobilization program operated
by a bank which meets the requirements of Section 26(a)(1) of the 1940 Act,
and (ii) for each year following such approval the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval, the Bank
shall enter into such immobilization program with such bank acting as a
subcustodian hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a "European Branch"),
provided that such Portfolio Securities are identified on the books of the
Bank asbelonging to the Fund and that the books of the Bank identify the
European Branch holding such Portfolio Securities. Notwithstanding any
other provision of this Agreement to the contrary, except as stated in the
first sentence of this subsection 6.8, the Bank shall be under no other
duty with respect to such Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
(i) The Bank shall take action as to put options ("puts")
and call options ("calls") purchased or sold (written) by the
Fund regarding escrow or other arrangements (i) in accordance
with the provisions of any agreement entered into upon receipt of
Proper Instructions among the Bank, any broker-dealer registered
with the National Association of Securities Dealers, Inc. (the
"NASD"), and, if necessary, the Fund, relating to the compliance
with the rules of the Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations.
(ii) Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has
deposited or is maintaining adequate margin, if required, with
any broker in connection with any option, nor shall the Bank be
under duty or obligation to present such option to the broker for
exercise unless it receives Proper Instructions from the Fund.
The Bank shall have no responsibility for the legality of any put
or call purchased or sold on behalf of the Fund, the propriety of
any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited
to or withdrawn from a Segregated Account (as defined in
subsection 6.10 below). The Bank specifically, but not by way of
limitation, shall not be under any duty or obligation to: (i)
periodically check or notify the Fund that the amount of such
collateral held by a broker or held in a Segregated Account is
sufficient to protect such broker or the Fund against any loss;
(ii) effect the return of any collateral delivered to a broker;
or (iii) advise the Fund that any option it holds, has or is
about to expire. Such duties or obligations shall be the sole
responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Fund in accordance
with the provisions of any agreement entered into upon the
receipt of Proper Instructions among the Fund, the Bank and a
Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account
deposits in connection with transactions by the Fund.
(ii) The responsibilities of the Bank as to futures, puts
and calls traded on commodities exchanges, any Futures Commission
Merchant account and the Segregated Account shall be limited as
set forth in subparagraph (a)(ii) of this Section 6.9 as if such
subparagraph referred to Futures Commission Merchants rather than
brokers, and Futures and puts and calls thereon instead of
options.
6.10 Segregated Account. The Bank shall, upon receipt of Proper
Instructions, establish and maintain a Segregated Account or Accounts for
and on behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account upon receipt of Proper Instructions in the
following circumstances:
(i) in accordance with the provisions of any agreement among
the Fund, the Bank and a broker-dealer registered under the
Exchange Act and a member of the NASD or any Futures Commission
Merchant registered under the Commodity Exchange Act, relating to
compliance with the rules of the Options Clearing Corporation and
of any registered national securities exchange or theCommodity
Futures Trading Commission or any registered Contract Market, or
of any similar organizations regarding escrow or other
arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or securities in
connection with options purchased or written by the Fund or
commodity futures purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as cash, U.S.
Government securities or other high grade debt obligations,
having a market value (marked to market on a daily basis) at all
times equal to not less than the aggregate purchase price due on
the settlement dates of all the Fund's then outstanding forward
commitment or "when-issued" agreements relating to the purchase
of Portfolio Securities and all the Fund's then outstanding
commitments under reverse repurchase agreements entered into with
broker-dealer firms;
(iv) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666,
or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of Segregated
Accounts by registered investment companies;
(v) for other proper corporate purposes, but only, in the
case of this clause (v), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board, or
of the executive committee of the Board signed by an officer of
the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such
Segregated Account and declaring such purposes to be proper
corporate purposes.
(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in accordance with the
provisions of any agreements referenced in (a)(i) or (a)(ii)
above, in accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant to (a)(iii)
or (a)(iv) above, for sale or delivery to meet the Fund's
obligations under outstanding forward commitment or when-issued
agreements for the purchase of Portfolio Securities and under
reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding forward
commitment or when issued agreements for the purchase of
portfolio securities or reverse repurchase agreements are sold to
other parties or the Fund's obligations thereunder are met from
assets of the Fund other than those in the Segregated Account;
(v) for delivery upon settlement of a forward commitment or
when-issued agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to (a)(v)
above, in accordance with the purposes of such account as set
forth in Proper Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated
in such Proper Instructions. The Bank shall include in its records with
respect to the assets of the Fund appropriate notation as to the amount of
each such deposit, the banking institution with which such deposit is made
(the "Deposit Bank"), and shall retain such forms of advice or receipt
evidencing thedeposit, if any, as may be forwarded to the Bank by the
Deposit Bank. Such deposits shall be deemed Portfolio Securities of the
Fund and the responsibility of the Bank therefore shall be the same as and
no greater than the Bank's responsibility in respect of other Portfolio
Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange, deliver
or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section only upon
receipt of Proper Instructions. The Proper Instructions shall state that
such transfer, exchange or delivery is for a purpose permitted under the
terms of this Section 6.12, and shall specify the applicable subsection, or
describe the purpose of the transaction with sufficient particularity to
permit the Bank to ascertain the applicable subsection. After receipt of
such Proper Instructions, the Bank will transfer, exchange, deliver or
release Portfolio Securities only in the following circumstances:
(a) Upon sales of Portfolio Securities for the account of the
Fund, against contemporaneous receipt by the Bank of payment therefor
in full, or against payment to the Bank in accordance with generally
accepted settlement practices and customs followed by U.S. registered
investment companies in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale
price shown in a broker's confirmation of sale received by the Bank
before such payment is made, as confirmed in the Proper Instructions
received by the Bank before such payment is made;
(b) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of
subscription, purchase or sale or other similar rights represented by
such Portfolio Securities, or for the purpose of tendering shares in
the event of a tender offer therefor, provided, however, that in the
event of an offer of exchange, tender offer, or other exercise of
rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so tender
in a timely manner unless such Proper Instructions are received by the
Bank at least two business days prior to the date required for tender,
and unless the Bank (or its agent or subcustodian hereunder) has
actual possession of such Security at least two business days prior to
the date of tender;
(c) Upon conversion of Portfolio Securities pursuant to their
terms into other securities;
(d) For the purpose of repurchasing in-kind shares of the Fund
upon authorization from the Fund;
(e) In the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to
the Fund by any bank, including the Bank; provided, however, that such
Portfolio Securities will be released only upon payment to the Bank
for the account of the Fund of the moneys borrowed, provided further,
however, that in cases where additional collateral is required to
secure a borrowing already made, and such fact is made to appear in
the Proper Instructions, Portfolio Securities may be released for that
purpose without any such payment. In the event that any pledged
Portfolio Securities are held by the Bank, they will be so held for
the account of the lender, and after notice to the Fund from the
lender in accordance with the normal procedures of the lender and any
loan agreement between the fund and the lender that an event of
deficiency or default on the loan has occurred, the Bank may deliver
such pledged Portfolio Securities to or for the account of the lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of
the fair market value of such security, as set forth in the Proper
Instructions received by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by the Fund to
a bank or broker dealer, but only against receipt in accordance with
street delivery custom except as otherwise provided herein, of
adequate collateral as agreed upon from time to time by the Fund and
the Bank, and upon receipt of payment in connection with any
repurchase agreement relating to such securities entered into by the
Fund;
(j) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer,
the Bank will also receive a certified copy of resolutions of the
Board, signed by an authorized officer of the Fund (other than the
officer certifying such resolution) and certified by its Secretary or
Assistant Secretary, specifying the Portfolio Securities to be
delivered, setting forth the transaction in or purpose for which such
delivery is to be made, declaring such transaction to be an authorized
transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such
securities shall be made; and
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Repurchases. In the case of payment of assets of the Fund held by the
Bank in connection with repurchases by the Fund of outstanding common shares,
the Bank will rely on notification by the Fund's transfer agent of a repurchase
of shares and certificates, if issued, in proper form for repurchase before such
payment is made. Payment shall be made in accordance with the Articles of
Incorporation or Declaration of Trust and By-laws of the Fund (the "Articles"),
from assets available for said purpose.
8. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will promptly deliver the Portfolio
Securities held by it under this Agreement and disburse cash only upon the order
of the Fund set forth in an Officers' Certificate, accompanied by a certified
copy of a resolution of the Board authorizing any of the foregoing transactions.
Upon completion of such delivery and disbursement and the payment of the fees
through the end of the then current term of this Agreement, and disbursements
and expenses of the Bank, this Agreement will terminate and the Bank shall be
released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding anything
herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following actions without
prior authorization or instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name of
the Fund all checks, drafts, or other negotiable or transferable
instruments or other orders for the payment of money received by it for the
account of the Fund and hold for the account of the Fund all income,
dividends, interest and other payments or distributions of cash with
respect to the Portfolio Securities held thereunder;
9.2 Present for payment all coupons and other income items held by it
for the account of the Fund which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the Fund;
9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership and
other certificates and affidavits required by the Internal Revenue Code or
the regulations of the Treasury Department issued thereunder, or by the
laws of any state, now or hereafter in effect, inserting the Fund's name on
such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so and as may be required to obtain payment in
respect thereof. The Bank will execute and deliver such certificates in
connection with Portfolio Securities delivered to it or by it under this
Agreement as may be required under the provisions of the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder, or
under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it
upon payment for the account of the Fund; and
9.6 Exchange interim receipts or temporary securities for definitive
securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for redemption,
offer of exchange, right of subscription, reorganization or other proceedings
affecting such Securities. If Portfolio Securities upon which such income is
payable are in default or payment is refused after due demand or presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.
11. Maintenance of Records and Accounting Services. The Bank will maintain
records with respect to transactions for which the Bank is responsible pursuant
to the terms and conditions of this Agreement, and in compliance with the
applicable rules and regulations of the 1940 Act. The books and records of the
Bank pertaining to its actions under this Agreement and reports by the Bank or
its independent accountants concerning its accounting system, procedures for
safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors or other
agents employed by the Fund and will be preserved by the Bank in the manner and
in accordance with the applicable rules and regulations under the 1940 Act.
The Bank shall perform fund accounting in accordance with applicable laws,
regulations and other applicable requirements to which other U.S. registered
investment companies are subject and shall keep the books of account and render
statements or copies from time to time as reasonably requested by the Treasurer
or any executive officer of the Fund.
The Bank shall assist generally in the preparation of reports to
shareholders, regulators and others, audits of accounts, and other ministerial
matters of like nature.
12. Fund Evaluation and Yield Calculation
12.1 Fund Evaluation. The Bank shall compute and, unless otherwise
directed by the Board, determine as of the close of regular trading on the
New York Stock Exchange on the last day of each week and the last day of
each month, on which said Exchange is open for unrestricted trading and as
of such other days, or hours, if any, as may be authorized by the Board and
agreed to by the Bank, the net asset value of a share of capital stock of
the Fund, such determination to be made in accordance with the provisions
of the Articles and By-laws of the Fund and the Prospectus and Statement of
Additional Information relating to the Fund, as they may from time to time
be amended, the Fund's valuationprocedures, applicable law and regulatory
guidance, and any applicable resolutions of the Board at the time in force
and applicable; and promptly to notify the Fund, the proper exchange and
the NASD or such other persons as the Fund may request of the results of
such computation and determination. In computing the net asset value
hereunder, the Bank may rely in good faith upon information furnished to it
by any Authorized Person in respect of (i) the manner of accrual of the
liabilities of the Fund and in respect of liabilities of the Fund not
appearing on its books of account kept by the Bank, (ii) reserves, if any,
authorized by the Board or that no such reserves have been authorized,
(iii) the source of the quotations to be used in computing the net asset
value and (iv) the value to be assigned to any security for which no price
quotations are readily available, and the Bank shall not be responsible for
any loss occasioned by such reliance or for any good faith reliance on any
quotations received from a source pursuant to (iii) above.
12.2. Yield Calculation. The Bank will compute the performance results
of the Fund (the "Yield Calculation") in accordance with the provisions of
Release No. 33-6753 and Release No. IC- 16245 (February 2, 1988) (the
"Releases") promulgated by the Securities and Exchange Commission, any
subsequent amendments thereto, and published interpretations of or general
conventions accepted by the staff of the Securities and Exchange Commission
with respect to such releases or the subject matter thereof ("Subsequent
Staff Positions"), subject to the terms set forth below:
(a) The Bank shall compute the Yield Calculation for the Fund for
the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the
Fund.
(b) In performing the Yield Calculation, the Bank will derive the
items of data necessary for the computation from the records it
generates and maintains for the Fund pursuant Section 11 hereof. The
Bank shall have no responsibility to review, confirm, or otherwise
assume any duty or liability with respect to the accuracy or
correctness of any such data supplied to it by the Fund, any of the
Fund's designated agents or any of the Fund's designated third party
providers.
(c) At the request of the Bank, the Fund shall provide, and the
Bank shall be entitled to rely on, written standards and guidelines to
be followed by the Bank in interpreting and applying the computation
methods set forth in the Releases or any Subsequent Staff Positions as
they specifically apply to the Fund. In the event that the computation
methods in the Releases or the Subsequent Staff Positions or the
application to the Fund of a standard or guideline is not free from
doubt or in the event there is any question of interpretation as to
the characterization of a particular security or any aspect of a
security or a payment with respect thereto (e.g., original issue
discount, participating debt security, income or return of capital,
etc.) or otherwise or as to any other element of the computation which
is pertinent to the Fund, the Fund or its designated agent shall have
the full responsibility for making the determination of how the
security or payment is to be treated for purposes of the computation
and how the computation is to be made and shall inform the Bank
thereof on a timely basis. The Bank shall have no responsibility to
make independent determinations with respect to any item which is
covered by this Section, and shall not be responsible for its
computations made in accordance with such determinations so long as
such computations are mathematically correct.
(d) The Fund shall keep the Bank informed of all publicly
available information and of any non-public advice or information
obtained by the Fund from its independent auditors or by its personnel
or the personnel of its investment adviser(s), or Subsequent Staff
Positions related to the computations to be undertaken by the Bank
pursuant to this Agreement and the Bank shall not be deemed to have
knowledge of such information (except as contained in the Releases)
unless it has been furnished to the Bank in writing.
13. Additional Services. The Bank shall perform the additional services for
the Fund as are set forth on Appendix B hereto. Appendix B may be amended from
time to time upon agreement of the parties to include further additional
services to be provided by the Bank to the Fund, at which time the fees set
forth in Appendix A shall be appropriately increased.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if
any, the Bank will be entitled to receive and act upon the advice of
independent counsel of its own selection, which may be counsel for the
Fund, and will be without liability for any action taken or thing done or
omitted to be done in accordance with this Agreement in good faith in
conformity with such advice.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or
the propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are
sold;
(c) the legality of an issue or sale of any common shares of the
Fund or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares of the
Fund or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Fund
or the legality of the distribution of any Portfolio Securities as
payment in kind of such dividend; and
(f) any property or moneys of the Fund unless and until received
by it, and any such property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held
by it for the account of the Fund are such as may properly be held by the
Fund under the provisions of its Articles, By-laws, any federal or state
statutes or any rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
Held in the United States. The Bank may employ agents of its own selection
in the performance of its duties hereunder and shall be responsible for the
acts and omissions of such agents as if performed by the Bank hereunder.
Without limiting the foregoing, certain duties of the Bank hereunder may be
performed by one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such
subcustodian meets at least the minimum qualifications required by Section
17(f)(1) of the 1940 Act to act as a custodian of the Fund's assets with
respect to property of the Fund held in the United States. The Bank shall
have no liability to the Fund or any other person by reason of any act or
omission of any such subcustodian and the Fund shall indemnify the Bank and
hold it harmless from and against any and all actions, suits and claims,
arising directly or indirectly out of the performance of any subcustodian.
Upon request of the Bank, the Fund shall assume the entire defense of any
action, suit, or claim subject to the foregoing indemnity. The Fund shall
pay all fees and expenses of any subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Custody Manager. If the Fund has
appointed any person or entity other than the Bank Foreign Custody
Manager (as that term is defined in Rule 17f-5 under the 1940 Act),
the Bank shall act only upon Proper Instructions from the Fund with
regard to any of the Fund's Portfolio Securities or other assets held
or to be held outside of the United States, and the Bank shall be
without liability for any Claim (as that term is defined in Section 15
hereof) arising out of maintenance of the Fund's Portfolio Securities
or other assets outside of the United States. The Fund also agrees
that it shall enter into a written agreement with such Foreign Custody
Manager that shall obligate such Foreign Custody Manager to provide to
the Bank in a timely manner all information required by the Bank in
order to complete its obligations hereunder. The Bank shall not be
liable for any Claim arising out of the failure of such Foreign
Custody Manager to provide such information to the Bank.
(b) Segregation of Securities. The Bank shall identify on its
books as belonging to the Fund the Foreign Portfolio Securities held
by each foreign sub-custodian (each an "Eligible Foreign Custodian,"
as that term is defined in Rule 17f-5 under the 0000 Xxx) selected by
the Foreign Custody Manager, subject to receipt by the Bank of the
necessary information from such Eligible Foreign Custodian if the
Foreign Custody Manager is not the Bank.
(c) Transactions in Foreign Custody Account. Transactions with
respect to the assets of the Fund held by an Eligible Foreign
Custodian shall be effected pursuant to Proper Instructions from the
Fund to the Bank and shall be effected in accordance with the
applicable agreement between the Foreign Custody Manager and such
Eligible Foreign Custodian. If at any time any Foreign Portfolio
Securities shall be registered in the name of the nominee of the
Eligible Foreign Custodian, the Fund agrees to hold any such nominee
harmless from any liability by reason of the registration of such
securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for Foreign Portfolio Securities received for
the account of the Fund and delivery of Foreign Portfolio Securities
maintained for the account of the Fund may be effected in accordance
with the customary established securities trading or securities
processing practices and procedures utilized by U.S. registered
investment companies 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.
In connection with any action to be taken with respect to the
Foreign Portfolio Securities held hereunder, including, without
limitation, the exercise of any voting rights, subscription rights,
redemption rights, exchange rights, conversion rights or tender
rights, or any other action in connection with any other right,
interest or privilege with respect to such Securities (collectively,
the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank
by the Eligible Foreign Custodian, and shall promptly forward to the
applicable Eligible Foreign Custodian any instructions, forms or
certifications with respect to such Rights, and any instructions
relating to the actions to be taken in connection therewith, as the
Bank shall receive from the Fund pursuant to Proper Instructions.
Notwithstanding the foregoing, the Bank shall have no further duty or
obligation with respect to such Rights, including, without limitation,
the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the
determination of whether any action proposed to be taken with respect
to such Rights by the Fund or by the applicable Eligible Foreign
Custodian will comply with all applicable terms and conditions of any
such Rights or any applicable laws or regulations, or market practices
within the market in which such action is to be taken or omitted.
(d) Tax Law. The Bank shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund or the Bank
as custodian of the Fund by the tax laws of any jurisdiction, and it
shall be the responsibility of the Fund to notify the Bank of the
obligations imposed on the Fund or the Bank as the custodian of the
Fund by the tax law of any non-U.S. jurisdiction, including
responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The
sole responsibility of the Eligible Foreign Custodian with regard to
such tax law shall be to use reasonable efforts to assist the Fund
with respect to any claim for exemption or refund under the tax law of
jurisdictions for which the Fund has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to the
safekeeping of Portfolio Securities and cash of the Fund held by it as it
uses in respect of its own similar property but it need not maintain any
special insurance for the benefit of the Fund.
14.5. Fees and Expenses of the Bank. The Fund will pay or reimburse
the Bank from time to time for any transfer taxes payable upon transfer of
Portfolio Securities made hereunder, and for all necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement (including any duties listed on any Schedule
hereto, if any) including any indemnities for any loss, liabilities or
expense to the Bank as provided above. For the services rendered by the
Bank hereunder, the Fund will pay to the Bank such compensation or fees at
such rate and at such times as shall be agreed upon in writing by the
parties from time to time. The Bank will also be entitled to reimbursement
by the Fund for all reasonable expenses incurred in conjunction with
termination of this Agreement.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this
Agreement for such payments by the Fund. Should such a payment or payments,
with advanced funds, result in an overdraft (due to insufficiencies of the
Fund's account with the Bank, or for any other reason) this Agreement deems
any such overdraft or related indebtedness a loan made by the Bank to the
Fund payable on demand. Such overdraft shall bear interest at the current
rate charged by the Bank for such loans unless the Fund shall provide the
Bank with agreed upon compensating balances. The Fund agrees that the Bank
shall have a continuing lien and security interest to the extent of any
overdraft or indebtedness and to the extent required by law, in and to any
property at any time held by it for the Fund's benefit or in which the Fund
has an interest and which is then in the Bank's possession or control (or
in the possession or control of any third party acting on the Bank's
behalf). The Fund authorizes the Bank, in the Bank's sole discretion, at
any time to charge any overdraft or indebtedness, together with interest
due thereon, against any balance of account standing to the credit of the
Fund on the Bank's books.
15. Limitation of Liability.
15.1 Notwithstanding anything in this Agreement to the contrary, in no
event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any
third party, and the Fund shall indemnify and hold the Bank and the
Indemnified Parties harmless from and against any and all loss, damage,
liability, actions, suits, claims, costs and expenses, including legal
fees, (a "Claim") arising as a result of any act or omission of the Bank or
any Indemnified Party under this Agreement, except for any Claim to the
extent resulting from the negligence, willful misfeasance or bad faith of
the Bank, or any Indemnified Party. Without limiting the foregoing, neither
the Bank nor the Indemnified Parties shall be liable for, and the Bank and
the Indemnified Parties shall be indemnified against, any Claim arising as
a result of:
(a) Any act or omission by the Bank or any Indemnified Party in
good faith reasonable reliance upon the terms of this Agreement, any
Officer's Certificate, Proper Instructions, resolution of the Board,
telegram, telecopier, notice, request, certificate or other instrument
reasonably believed by the Bank to genuine;
(b) Any act or omission of any subcustodian selected by or at the
direction of the Fund;
(c) Any act or omission of any Foreign Custody Manager other than
the Bank or any act or omission of any Eligible Foreign Custodian if
the Bank is not the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not
been registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which the Bank
has not received Proper Instructions or obtained actual possession of
all necessary Securities, consents or other materials by 5:00 p.m. on
the date specified as the Response Deadline;
(f) Any act or omission of any European Branch of a U.S. banking
institution that is the issuer of Eurodollar CDs in connection with
any Eurodollar CDs held by such European Branch;
(g) Information reasonably relied on in good faith by the Bank
and supplied by any Authorized Person in connection with the
calculation of (i) the net asset value of the shares of capital stock
of the Fund or (ii) the Performance Calculation; or
(h) Any acts of God, strikes, legal constraint, government
actions, war, emergency conditions, earthquakes, fires, floods, storms
or other disturbances of nature, epidemics, riots, nationalization,
expropriation, currency restrictions, interruption, loss or
malfunction of electrical power or other utilities, transportation, or
telecommunication systems, or computers and computer facilities
(hardware or software), equipment or transmission failure, damage
reasonably beyond its control or other causes reasonably beyond its
control.
15.2 Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank or the Indemnified Parties be liable to the Fund or
any third party for lost profits or lost revenues or any special,
consequential, punitive or incidental damages of any kind whatsoever in
connection with this Agreement or any activities hereunder.
15.3 The indemnification contained herein shall survive the
termination of this Agreement.
16. Termination.
16.1 The term of this Agreement shall be one year, commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this
Agreement shall automatically renew for successive one-year terms (each a
"Renewal Term") unless written notice of non-renewal is delivered by the
non-renewing party to the other party no later than ninety days prior to
the expiration of the Initial Term or any Renewal Term, as the case may be.
Either party hereto may terminate this Agreement prior to the expiration of
the Initial Term or any Renewal Term in the event of a Default. A "Default"
shall exist if a party fails to substantially perform its material
obligations under this Agreement or otherwise violates any material
provision of this Agreement, provided that the violating party does not
cure such violation within thirty days of receipt of written notice from
the non-violating party of such violation (a "Notice of Violation"), or if
the nature of the violation is such that it cannot be cured within such
thirty-day period, the party does not commence substantive action to cure
such violation within thirty days of the Notice of Violation.
16.2 A Default under this Agreement shall constitute a simultaneous
default under the Administration Agreement and Delegation Agreement giving
rise to all appropriate remedies thereunder, including early termination.
Similarly, a default under the Administration Agreement or
DelegationAgreement shall constitute a simultaneous Default hereunder
giving rise to all remedies set forth herein, including early termination.
16.3 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer
of all cash and the delivery of all Portfolio Securities duly endorsed and
all records maintained under Section 11 to the successor custodian when
appointed by the Fund. The obligation of the Bank to deliver and transfer
over the assets of the Fund held by it directly to such successor custodian
will commence as soon as such successor is appointed and will continue
until completed as aforesaid. If the Fund does not select a successor
custodian within fifty (50) days from the date of delivery of notice of
termination the Bank may, subject to the provisions of subsection 16.3,
deliver the Portfolio Securities and cash of the Fund held by the Bank to a
bank or trust company of the Bank's own selection which meets the
requirements of Section 17(f)(1) of the 1940 Act and has a reported
capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held as the property of the Fund under terms similar to
those on which they were held by the Bank, whereupon such bank or trust
company so selected by the Bank will become the successor custodian of such
assets of the Fund with the same effect as though selected by the Board.
Thereafter, the Bank shall be released from any and all obligations under
this Agreement.
16.4 Prior to the expiration of fifty (50) days after notice of
termination has been given, the Fund may furnish the Bank with an order of
the Fund advising that a successor custodian cannot be found willing and
able to act upon reasonable and customary terms. In that event the Bank
will deliver the Portfolio Securities and cash of the Fund held by it,
subject as aforesaid, upon receipt by the Bank of a copy of the minutes of
the meeting of the Board at which action was taken, certified by the Fund's
Secretary and an opinion of counsel to the Fund in form and content
satisfactory to the Bank. Thereafter, the Bank shall be released from any
and all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable
expenses incurred by the Bank in connection with the termination of
this Agreement.
16.5 At any time after the termination of this Agreement, the
Fund may, upon written request, have reasonable access to the records
of the Bank relating to its performance of its duties as custodian.
17. Confidentiality. Both parties hereto agree that any non-public
information obtained hereunder concerning the other party or the shareholders of
the Fund is confidential and may not be disclosed without the consent of the
other party, except as may be required by applicable law or at the request of a
governmental agency. The parties further agree that a breach of this provision
would irreparably damage the other party and accordingly agree that each of them
is entitled, in addition to all other remedies at law or in equity to an
injunction or injunctions without bond or other security to prevent breaches of
this provision.
18. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) United
States Postal Service registered mail, (ii) facsimile with written confirmation,
(iii) hand delivery with signature to such party at its office at the address
set forth below, namely:
(a) In the case of notices sent to the Fund to:
Boulder Growth & Income Fund, Inc.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, President & General Counsel
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Facsimile 000-000-0000
Attention: Xxxxx X. Xxxxx, Senior Director - Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time designate
in writing.
19. Amendments. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 16 hereof will not be deemed to
be an assignment within the meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
22. Counterparts. 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.
23. Entire Agreement. This Agreement, together with its Appendices,
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations assumed
by the Fund hereunder shall be limited in all cases to the assets of the Fund
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Fund.
25. Non-exclusive Services. The Fund understands that the Bank now acts and
will continue to act as custodian of various investment companies and fiduciary
of other managed accounts, and the Fund has no objection to the Bank's so
acting. In addition, it is understood that the persons employed by the Bank to
assist in the performance of its duties hereunder may not devote their full time
to such services and nothing herein contained shall be deemed to limit or
restrict the right of the Bank or any affiliate of the Bank to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
26. Business Continuity. The Bank represents that it has in place a
reasonable business continuity plan.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
Boulder Growth & Income Fund, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
Appendices
Appendix . . . . . . . .. . . . .. . . . . . .. . . . . . Fee Schedule
Appendix B . . . . . . . . . . . . . . . . . . . . Additional Services
