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CUSTODY AGREEMENT
AGREEMENT, dated as of June 20, 1998 by and between DREYFUS PREMIER
EQUITY FUNDS, INC., a corporation organized and existing under the laws of
the State of Maryland (the "Company"), acting with respect to and on behalf
of its DREYFUS PREMIER MARKET NEUTRAL FUND (the "Portfolio"), and CUSTODIAL
TRUST COMPANY, a bank organized and existing under the laws of the State of
New Jersey (the "Custodian").
WHEREAS, the Company desires that the securities, funds and other
assets of the Portfolio be held and administered by Custodian pursuant to
this Agreement;
WHEREAS, the Portfolio is an investment portfolio represented by a
series of Shares constituting part of the capital stock of the Company, an
open-end management investment company registered under the 1940 Act;
WHEREAS, Custodian represents that it is a bank having the
qualifications prescribed in the 1940 Act to act as custodian for management
investment companies registered under the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
The Company and Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following terms, unless the
context otherwise requires, shall mean:
1.1 "Authorized Person" means any person authorized by resolution of
the Board of Directors to give Oral Instructions and Written Instructions on
behalf of the Company and identified, by name or by office, in Exhibit A
hereto or any person designated to do so by an investment adviser of the
Portfolio named by the Company in Exhibit B hereto.
1.2 "Board of Directors/" means the Board of Directors of the Company
or, when permitted under the 1940 Act, the Executive Committee thereof, if
any.
1.3 "Book-Entry System" means a book-entry system maintained by a
Federal Reserve Bank for securities of the United States government or of
agencies or instrumentalities thereof (including government-sponsored
enterprises).
1.4 "Business Day" means any day on which banks in the State of New
Jersey and New York are open for business.
1.5 "Custody Account" means the account in the name of the Portfolio,
which is provided for in Section 3.2 below.
1.6 "Eligible Bank" means a bank as defined in the 1940 Act.
1.7 "Master Repurchase Agreement" means the Master Repurchase Agreement
of even date herewith between the Company and Bear, Xxxxxxx & Co. Inc. as it
may from time to time be amended.
1.8 "1940 Act" means the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
1.9 "Oral Instructions" means instructions orally transmitted to and
accepted by Custodian which are (a) reasonably believed by Custodian to have
been given by an Authorized Person, (b) recorded and kept among the records
of Custodian made in the ordinary course of business, and (c) completed in
accordance with Custodian's requirements from time to time as to content of
instructions and their manner and timeliness of delivery by the Company.
1.10 "Proper Instructions" means Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions
when deemed appropriate by the Company and Custodian.
1.11 "Securities Depository" means The Depository Trust Company and
any other clearing agency registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, which acts as a
securities depository.
1.12 "Shares" means those shares in a series or class of the capital
stock of the Company that represent interests in the Portfolio.
1.13 "Written Instructions" means written communications received by
Custodian that are (a) reasonably believed by Custodian to have been signed
or sent by an Authorized Person, (b) sent or transmitted by letter,
facsimile, central processing unit connection, on-line terminal or magnetic
tape, and (c) completed in accordance with Custodian's requirements from
time to time as to content of instructions and their manner and timeliness
of delivery by the Company.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 Appointment. The Company hereby appoints Custodian as custodian of
all such securities, funds and other assets of the Portfolio as may be
acceptable to Custodian and from time to time delivered to it by the Company
or others for the account of the Portfolio.
2.2 Acceptance. Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF SECURITIES, FUNDS AND OTHER ASSETS
3.1 Segregation. All securities and non-cash property of the Portfolio
in the possession of Custodian (other than securities maintained by
Custodian with a sub-custodian appointed pursuant to this Agreement or in a
Securities Depository or Book-Entry System) shall be physically segregated
from other such securities and non-cash property in the possession of
Custodian. All cash, securities and other non-cash property of the Portfolio
shall be identified as belonging to the Portfolio.
3.2 Custody Account. (a) Custodian shall open and maintain in its trust
department a custody account in the name of the Portfolio, subject only to
draft or order of Custodian, in which Custodian shall enter and carry all
securities, funds and other assets of the Portfolio which are delivered to
Custodian.
(b) If Custodian at any time fails to receive any of the documents
referred to in Section 3.8(a) below, then, until such time as it receives
such document, it shall not be obligated to receive any securities of the
Portfolio into the Custody Account and shall be entitled to return to the
Portfolio any securities of the Portfolio that it is holding.
3.3 Disclosure to Issuers of Securities. Custodian is not authorized to
disclose the Company's and the Portfolio's names, addresses and securities
positions in the Custody Account to the issuers of such securities when
requested by them to do so.
3.4 Employment of Sub-Custodians. At any time and from time to time,
Custodian in its discretion may appoint and employ, and may also cease to
employ, any Eligible Bank as sub-custodian to hold securities and other
assets of the Portfolio that are maintained in the United States and to
carry out such other provisions of this Agreement as it may determine,
provided, however, that the employment of any such sub-custodian has been
approved by the Company. The appointment of any such sub-custodian shall be
at Custodian's expense and shall not relieve Custodian of any of its
obligations or liabilities under this Agreement.
3.5 Employment of Other Agents. Custodian may employ other suitable
agents, which may include affiliates of Custodian such as Bear, Xxxxxxx &
Co. Inc. ("Bear Xxxxxxx") or Bear, Xxxxxxx Securities Corp.("BS
Securities"), both of which are securities broker-dealers, provided,
however, that Custodian shall not employ (a) BS Securities to hold any
collateral pledged by BS Securities under the Master Securities Loan
Agreement or any other securities loan agreement between the Company and BS
Securities, whether now or hereafter in effect, or (b) Bear Xxxxxxx to hold
any securities purchased from Bear Xxxxxxx under the Master Repurchase
Agreement or any other repurchase agreement between the Company and Bear
Xxxxxxx, whether now or hereafter in effect. The appointment of any agent
pursuant to this Section 3.5 shall not relieve Custodian of any of its
obligations or liabilities under this Agreement.
3.6 Bank Accounts. In its discretion and from time to time Custodian
may open and maintain one or more demand deposit accounts with any Eligible
Bank (any such accounts to be in the name of Custodian and subject only to
its draft or order), provided, however, that the opening and maintenance of
any such account shall be at Custodian's expense and shall not relieve
Custodian of any of its obligations or liabilities under this Agreement. At
the instruction of the Company, Custodian shall open and maintain one or
more demand deposit accounts with any Eligible Bank acceptable to the
Company (any such accounts to be in the name of Custodian and subject only
to its draft or order), provided, however, that the opening and maintenance
of any such account shall be at the Company's expense.
3.7 Delivery of Assets to Custodian. The Company shall deliver to
Custodian the securities, funds and other assets of the Portfolio, including
(a) payments of income, payments of principal and capital distributions
received by the Portfolio with respect to securities, funds or other assets
owned by the Portfolio at any time during the term of this Agreement, and
(b) funds received by the Portfolio for the issuance, at any time during
such term, of Shares. Custodian shall not be under any duty or obligation to
require the Company to deliver to it any securities or other assets owned by
the Portfolio and shall have no responsibility or liability for or on
account of securities or other assets not so delivered.
3.8 Securities Depositories and Book-Entry Systems. Custodian and any
sub-custodian appointed pursuant to Section 3.4 above may deposit and/or
maintain securities of the Portfolio in a Securities Depository or in a
Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of securities of the Portfolio in any Securities
Depository or Book-Entry System, the Company shall deliver to Custodian a
resolution of the Board of Directors of the Company, certified by an
officer of the Company, authorizing and instructing Custodian (and any
sub-custodian appointed pursuant to Section 3.4 above) on an on-going basis
to deposit in such Securities Depository or Book-Entry System all securities
eligible for deposit therein and to make use of such Securities Depository
or Book-Entry System to the extent possible and practical in connection with
the performance of its obligations hereunder (or under the applicable
sub-custody agreement in the case of such sub-custodian), including, without
limitation, in connection with settlements of purchases and sales of
securities, loans of securities, and deliveries and returns of collateral
consisting of securities.
(b) Securities of the Portfolio kept in a Book-Entry System or
Securities Depository shall be kept in an account ("Depository Account") of
Custodian (or of any sub-custodian appointed pursuant to Section 3.4 above)
in such Book-Entry System or Securities Depository which includes only
assets held by Custodian (or such sub-custodian) as a fiduciary, custodian
or otherwise for customers.
(c) The records of Custodian with respect to securities of the
Portfolio maintained in a Book-Entry System or Securities Depository shall
at all times identify such securities as belonging to the Portfolio.
(d) If securities purchased by the Portfolio are to be held in a
Book-Entry System or Securities Depository, Custodian (or any sub-custodian
appointed pursuant to Section 3.4 above) shall pay for such securities upon
(i) receipt of advice from the Book-Entry System or Securities Depository
that such securities have been transferred to the Depository Account, and
(ii) the making of an entry on the records of Custodian (or of such sub-
custodian) to reflect such payment and transfer for the account of the
Portfolio. If securities sold by the Portfolio are held in a Book-Entry
System or Securities Depository, Custodian (or such sub-custodian) shall
transfer such securities upon (A) receipt of advice from the Book-Entry
System or Securities Depository that payment for such securities has been
transferred to the Depository Account, and (B) the making of an entry on the
records of Custodian (or of such sub-custodian) to reflect such transfer and
payment for the account of the Portfolio.
(e) Custodian shall provide the Company with copies of any report
obtained by Custodian (or by any sub-custodian appointed pursuant to Section
3.4 above) from a Book-Entry System or Securities Depository in which
securities of the Portfolio are kept on the internal accounting controls and
procedures for safeguarding securities deposited in such Book-Entry System
or Securities Depository.
(f) At its election, the Company shall be subrogated to the rights of
Custodian (or of any sub-custodian appointed pursuant to Section 3.4 above)
with respect to any claim against a Book-Entry System or Securities
Depository or any other person for any loss or damage to the Portfolio
arising from the use of such Book-Entry System or Securities Depository, if
and to the extent that the Portfolio has not been made whole for any such
loss or damage.
3.9 Relationship With Securities Depositories. No Book-Entry System,
Securities Depository, or other securities depository or clearing agency
which it is or may become standard market practice to use for the comparison
and settlement of trades in securities shall be an agent or sub-contractor
of Custodian for purposes of Section 3.5 above or otherwise.
3.10 Payments from Custody Account. Upon receipt of Proper Instructions
with respect to the Portfolio but subject to its right to foreclose upon and
liquidate collateral pledged to it pursuant to Section 8.3 below, Custodian
shall make payments from the Custody Account of the Portfolio, but only in
the following cases, provided, first, that such payments are in connection
with the clearance and/or custody of securities or other assets, second,
that there are sufficient funds in such Custody Account, whether belonging
to the Portfolio or advanced to it by Custodian in its sole and absolute
discretion as set forth in Section 3.15 below, for Custodian to make such
payments, and, third, that after the making of such payments, the Portfolio
would not be in violation of any margin or other requirements agreed upon
pursuant to Section 3.15 below:
(a) For the purchase of securities for the Portfolio but only (i) in
the case of securities (other than options on securities, futures contracts
and options on futures contracts), against the delivery to Custodian (or any
sub-custodian appointed pursuant to this Agreement) of such securities
registered as provided in Section 3.17 below or in proper form for transfer
or, if the purchase of such securities is effected through a Book-Entry
System or Securities Depository, in accordance with the conditions set forth
in Section 3.8 above, and (ii) in the case of options, futures contracts and
options on futures contracts, against delivery to Custodian (or such
sub-custodian) of evidence of title thereto in favor of the Portfolio, the
Custodian, any such sub-custodian, or any nominee referred to in Section
3.17 below;
(b) In connection with the conversion, exchange or surrender, as set
forth in Section 3.11(f) below, of securities owned by the Portfolio;
(c) For transfer in accordance with the provisions of any agreement
among the Company, Custodian and a securities broker-dealer, relating to
compliance with rules of The Options Clearing Corporation and of any
registered national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection with
transactions of the Portfolio;
(d) For transfer in accordance with the provisions of any agreement
among the Company, Custodian and a futures commission merchant, relating to
compliance with the rules of the Commodity Futures Trading Commission and/or
any contract market (or any similar organization or organizations) regarding
margin or other deposits in connection with transactions of the Portfolio;
(e) For the funding of any time deposit (whether certificated or not)
or other interest-bearing account with any banking institution (including
Custodian), provided that Custodian shall receive and retain such
certificate, advice, receipt or other evidence of deposit (if any) as such
banking institution may deliver with respect to any such deposit or account;
(f) For the purchase from a banking or other financial institution of
loan participations, but only if Custodian has in its possession a copy of
the agreement between the Company and such banking or other financial
institution with respect to the purchase of such loan participations and
provided that Custodian shall receive and retain such participation
certificate or other evidence of participation (if any) as such banking or
other financial institution may deliver with respect to any such loan
participation;
(g) For the purchase and/or sale of foreign currencies or of options to
purchase and/or sell foreign currencies, for spot or future delivery, for
the account of the Portfolio pursuant to contracts between the Company and
any banking or other financial institution (including Custodian, any
affiliate of Custodian and any sub-custodian appointed pursuant to this
Agreement);
(h) For transfer to a securities broker-dealer as margin for a short
sale of securities for the Portfolio, or as payment in lieu of dividends
paid on securities sold short for the Portfolio;
(i) For the payment as provided in Article IV below of any dividends,
capital gain distributions or other distributions declared on the Shares;
(j) For the payment as provided in Article IV below of the redemption
price of the Shares;
(k)For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for the
account of the Portfolio: interest, taxes, and administration, investment
advisory, accounting, auditing, transfer agent, custodian and legal fees,
and other operating expenses of the Portfolio; in all cases, whether or not
such expenses are to be in whole or in part capitalized or treated as
deferred expenses; and
(l) For any other proper purpose, but only upon receipt of Proper
Instructions, specifying the amount and purpose of such payment, certifying
such purpose to be a proper purpose of the Portfolio, and naming the person
or persons to whom such payment is to be made.
3.11 Deliveries from Custody Account. Upon receipt of Proper
Instructions with respect to the Portfolio but subject to its right to
foreclose upon and liquidate collateral pledged to it pursuant to Section
8.3 below, Custodian shall release and deliver securities and other assets
from the Custody Account of the Portfolio, but only in the following cases,
provided, first, that such deliveries are in connection with the clearance
and/or custody of securities or other assets, second, there are sufficient
amounts and types of securities or other assets in such Custody Account for
Custodian to make such deliveries, and, third, that after the making of such
deliveries, the Portfolio would not be in violation of any margin or other
requirements agreed upon pursuant to Section 3.15 below:
(a) Upon the sale of securities for the account of the Portfolio but,
subject to Section 3.12 below, only against receipt of payment therefor or,
if such sale is effected through a Book-Entry System or Securities
Depository, in accordance with the provisions of Section 3.8 above;
(b) To an offeror's depository agent in connection with tender or other
similar offers for securities of the Portfolio; provided that, in any such
case, the funds or other consideration for such securities is to be
delivered to Custodian;
(c) To the issuer thereof or its agent when such securities are called,
redeemed or otherwise become payable, provided that in any such case the
funds or other consideration for such securities is to be delivered to
Custodian;
(d) To the issuer thereof or its agent for exchange for a different
number of certificates or other evidence representing the same aggregate
face amount or number of units; provided that, in any such case, the new
securities are to be delivered to Custodian;
(e) To the securities broker through whom securities are being sold for
the Portfolio, for examination in accordance with the "street delivery"
custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
issuer of such securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit agreement,
including surrender or receipt of underlying securities in connection with
the issuance or cancellation of depository receipts; provided that, in any
such case, the new securities and funds, if any, are to be delivered to
Custodian;
(g) In the case of warrants, rights or similar securities, to the
issuer of such warrants, rights or similar securities, or its agent, upon
the exercise thereof, provided that, in any such case, the new securities
and funds, if any, are to be delivered to Custodian;
(h) To the borrower thereof, or its agent, in connection with any loans
of securities for the Company pursuant to any securities loan agreement
entered into by the Company, but only against receipt by Custodian of such
collateral as is required under such securities loan agreement;
(i) To any lender, or its agent, as collateral for any borrowings from
such lender by the Portfolio that require a pledge of assets of the
Portfolio, but only against receipt by Custodian of the amounts borrowed;
(j) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Portfolio or the Company;
(k) For delivery in accordance with the provisions of any agreement
among the Company, Custodian and a securities broker-dealer, relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection with
transactions of the Portfolio;
(l) For delivery in accordance with the provisions of any agreement
among the Company, Custodian, and a futures commission merchant, relating to
compliance with the rules of the Commodity Futures Trading Commission and/or
any contract market (or any similar organization or organizations) regarding
margin or other deposits in connection with transactions of the Portfolio;
(m) For delivery to a securities broker-dealer as margin for a short
sale of securities for the Portfolio;
(n) To the issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter, collectively, "ADRs") for such securities,
or its agent, against a written receipt therefor adequately describing such
securities, provided that such securities are delivered together with
instructions to issue ADRs in the name of Custodian or its nominee and to
deliver such ADRs to Custodian;
(o) In the case of ADRs, to the issuer thereof, or its agent, against a
written receipt therefor adequately describing such ADRs, provided that such
ADRs are delivered together with instructions to deliver the securities
underlying such ADRs to Custodian or an agent of Custodian; or
(p) For any other proper purpose, but only upon receipt of Proper
Instructions, specifying the securities or other assets to be delivered,
setting forth the purpose for which such delivery is to be made, certifying
such purpose to be a proper purpose of the Portfolio, and naming the person
or persons to whom delivery of such securities or other assets is to be
made.
3.12 Delivery Prior to Final Payment. When instructed by the Company to
deliver securities of the Portfolio against payment, Custodian shall be
entitled, but only if in accordance with generally accepted market practice,
to deliver such securities prior to actual receipt of final payment therefor
and, exclusively in the case of securities in physical form, prior to
receipt of payment therefor. In any such case, the Portfolio shall bear the
risk that final payment for such securities may not be made or that such
securities may be returned or otherwise held or disposed of by or through
the person to whom they were delivered, and Custodian shall have no
liability for any of the foregoing.
3.13 Credit Prior to Final Payment. In its sole discretion and from
time to time, Custodian may credit the Custody Account of the Portfolio,
prior to actual receipt of final payment thereof, with (a) proceeds from the
sale of securities of the Portfolio which it has been instructed to deliver
against payment, (b) proceeds from the redemption of securities or other
assets in such Custody Account, and (c) income from securities, funds or
other assets in such Custody Account. Any such credit shall be conditional
upon actual receipt by Custodian of final payment and may be reversed if
final payment is not actually received in full. Custodian may, in its sole
discretion and from time to time, permit the Portfolio to use funds so
credited to its Custody Account in anticipation of actual receipt of final
payment. Any funds so used shall constitute an advance subject to Section
3.15 below.
3.14 Definition of Final Payment. For purposes of this Agreement,
"final payment" means payment in funds which are (or have become)
immediately available, under applicable law are irreversible, and are not
subject to any security interest, xxxx, xxxx or other encumbrance.
3.15 Clearing Credit. Custodian may, in its sole discretion and from
time to time, advance funds to the Company to facilitate the settlement of
the Portfolio's transactions in the Custody Account . Any such advance (a)
shall be repayable immediately upon demand made by Custodian, (b) shall be
fully secured as provided in Section 8.3 below, and (c) shall bear interest
at such rate, and be subject to such other terms and conditions, as
Custodian and the Company may agree.
3.16 Actions Not Requiring Proper Instructions. Unless otherwise
instructed by the Company, Custodian shall with respect to all securities
and other assets held for the Portfolio:
(a) Subject to Section 7.4 below, receive into the Custody Account of
the Portfolio any funds or other property, including payments of principal,
interest and dividends, due and payable on or on account of such securities
and other assets;
(b) Deliver securities of the Portfolio to the issuers of such
securities or their agents for the transfer thereof into the name of the
Portfolio, Custodian, or any of the nominees referred to in Section 3.17
below;
(c) Endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or securities in temporary form for
securities in definitive form;
(e) Execute, as Custodian, any necessary declarations or certificates
of ownership under the federal income tax laws of the United States, or the
laws or regulations of any other taxing authority, in connection with the
transfer of such securities or other assets or the receipt of income or
other payments with respect thereto;
(f) Receive and hold for the Portfolio all rights and similar
securities issued with respect to securities or other assets of the
Portfolio;
(g) As may be required in the execution of Proper Instructions,
transfer funds from the Custody Account of the Company to any demand deposit
account maintained by the Custodian pursuant to Section 3.6 above; and
(h) In general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase and transfer of, and other
dealings in, such securities and other assets.
3.17 Registration and Transfer of Securities. All securities held for
the Portfolio that are issuable only in bearer form shall be held by
Custodian in that form, provided that any such securities shall be held in a
Securities Depository or Book-Entry System if eligible therefor. All other
securities and all other assets held for the Portfolio may be registered in
the name of (a) Custodian as agent, (b) any sub-custodian appointed pursuant
to this Agreement, (c) any Securities Depository, or (d) any nominee or
agent of any of them. The Company shall furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for
transfer, or to register as in this Section 3.17 provided, any securities or
other assets delivered to Custodian which are registered in the name of the
Portfolio.
3.18Records. (a) Custodian shall maintain complete and accurate records
with respect to securities, funds and other assets held for the Portfolio,
including (i) journals or other records of original entry containing an
itemized daily record in detail of all receipts and deliveries of securities
and all receipts and disbursements of funds; (ii) ledgers (or other records)
reflecting (A) securities in transfer, if any, (B) securities in physical
possession, (C) monies and securities borrowed and monies and securities
loaned (together with a record of the collateral therefor and substitutions
of such collateral), (D) dividends and interest received, and (E) dividends
receivable and interest accrued; and (iii) cancelled checks and bank records
related thereto. Custodian shall keep such other books and records with
respect to securities, funds and other assets of the Portfolio which are
held hereunder as the Company may reasonably request.
(b) All such books and records maintained by Custodian for the
Portfolio shall (i) be maintained in a form acceptable to the Company and in
compliance with rules and regulations of the Securities and Exchange
Commission, (ii) be the property of the Portfolio and at all times during
the regular business hours of Custodian be made available upon request for
inspection by duly authorized officers, employees or agents of the Company
and employees or agents of the Securities and Exchange Commission, and (iii)
if required to be maintained under the 1940 Act, be preserved for the
periods prescribed therein.
3.19 Account Reports by Custodian. Custodian shall furnish the Company
with a daily activity statement, including a summary of all transfers to or
from the Custody Account of the Portfolio (in the case of securities and
other assets maintained in the United States, on the day following such
transfers). At least monthly and from time to time, Custodian shall furnish
the Company with a detailed statement of the securities, funds and other
assets held for the Portfolio under this Agreement.
3.20 Other Reports by Custodian. Custodian shall provide the Company
with such reports as the Company may reasonably request from time to time on
the internal accounting controls and procedures for safeguarding securities
which are employed by Custodian or any sub-custodian appointed pursuant to
this Agreement.
3.21 Proxies and Other Materials. (a) Unless otherwise instructed by
the Company, Custodian shall promptly deliver to the Company all notices of
meetings, proxy materials (other than proxies) and other announcements which
it receives regarding securities held by it in the Custody Account of the
Portfolio. Whenever Custodian or any of its agents receives a proxy with
respect to securities in the Custody Account of the Portfolio, Custodian
shall promptly request instructions from the Company on how such securities
are to be voted, and shall give such proxy, or cause it to be given, in
accordance with such instructions. If the Company timely informs Custodian
that the Company wishes to vote any such securities in person, Custodian
shall promptly seek to have a legal proxy covering such securities issued to
the Company. Unless otherwise instructed by the Company, neither Custodian
nor any of its agents shall exercise any voting rights with respect to
securities held hereunder.
(b) Unless otherwise instructed by the Company, Custodian shall
promptly transmit to the Company all other written information received by
Custodian from issuers of securities held in the Custody Account of the
Portfolio. With respect to tender or exchange offers for such securities or
with respect to other corporate transactions involving such securities,
Custodian shall promptly transmit to the Company all written information
received by Custodian from the issuers of such securities or from any party
(or its agents) making any such tender or exchange offer or participating in
such other corporate transaction. If the Company, with respect to such
tender or exchange offer or other corporate transaction, desires to take any
action that may be taken by it pursuant to the terms of such offer or other
transaction, the Company shall notify Custodian at least five Business Days
prior to the date on which Custodian is to take such action.
3.22 Co-operation. Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Company to keep the
books of account of the Portfolio and/or to compute the value of the assets
of the Portfolio.
ARTICLE IV
REDEMPTION OF PORTFOLIO SHARES;
DIVIDENDS AND OTHER DISTRIBUTIONS
4.1 Transfer of Funds. From such funds as may be available for the
purpose in the Custody Account, and upon receipt of Proper Instructions
specifying that the funds are required to redeem Shares or to pay dividends
or other distributions to holders of Shares, Custodian shall transfer each
amount specified in such Proper Instructions to such account of the
Portfolio or of an agent thereof (other than Custodian), at such bank, as
the Company may designate therein with respect to such amount.
4.2 Sole Duty of Custodian. Custodian's sole obligation with respect to
the redemption of Shares and the payment of dividends and other
distributions thereon shall be its obligation set forth in Section 4.1
above, and Custodian shall not be required to make any payments to the
various holders from time to time of Shares nor shall Custodian be
responsible for the payment or distribution by the Company, or any agent
designated in Proper Instructions given pursuant to Section 4.1 above, of
any amount paid by Custodian to the account of the Company or such agent in
accordance with such Proper Instructions.
ARTICLE V
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions to do so, Custodian shall establish
and maintain a segregated account or accounts for and on behalf of the
Portfolio, into which account or accounts may be transferred funds and/or
securities, including securities maintained in a Securities Depository:
(a) in accordance with the provisions of any agreement among the
Company, Custodian and a securities broker-dealer (or any futures commission
merchant), relating to compliance with the rules of The Options Clearing
Corporation or of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions of the Portfolio,
(b) for purposes of segregating funds or securities in connection with
securities options purchased or written by the Portfolio or in connection
with financial futures contracts (or options thereon) purchased or sold by
the Portfolio,
(c) which constitute collateral for loans of securities made by the
Portfolio,
(d) for purposes of compliance by the Portfolio with requirements under
the 1940 Act for the maintenance of segregated accounts by registered
management investment companies in connection with reverse repurchase
agreements, when-issued, delayed delivery and firm commitment transactions,
and short sales of securities, and
(e) for other proper purposes, but only upon receipt of Proper
Instructions, specifying the purpose or purposes of such segregated account
and certifying such purposes to be proper purposes of the Portfolio.
ARTICLE VI
CERTAIN REPURCHASE TRANSACTIONS
6.1 Transactions. If and to the extent that the necessary funds and
securities have been entrusted to it under this Agreement, and subject to
Custodian's right to foreclose upon and liquidate collateral pledged to it
pursuant to Section 8.3 below, Custodian, as agent of the Portfolio, shall
from time to time (and unless the Company gives it Proper Instructions to do
otherwise) make for the account of the Portfolio the transfers of funds and
deliveries of securities which the Portfolio is required to make pursuant to
the Master Repurchase Agreement and shall receive for the account of the
Portfolio the transfers of funds and deliveries of securities which the
seller under the Master Repurchase Agreement is required to make pursuant
thereto. Custodian shall make and receive all such transfers and deliveries
pursuant to, and subject to the terms and conditions of, the Master
Repurchase Agreement.
6.2 Collateral. Custodian shall daily xxxx to market the securities
purchased under the Master Repurchase Agreement and held in the Custody
Account, and shall give to the seller thereunder any such notice as may be
required thereby in connection with such xxxx-to-market.
6.3 Events of Default. Custodian shall promptly notify the Company of
any event of default under the Master Repurchase Agreement (as such term
"event of default" is defined therein) of which it has actual knowledge.
6.4 Master Repurchase Agreement. Custodian hereby acknowledges its
receipt from the Company of a copy of the Master Repurchase Agreement. The
Company shall provide Custodian, prior to the effectiveness thereof, with a
copy of any amendment to the Master Repurchase Agreement.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 Standard of Care. Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and
shall be without liability to the Portfolio or the Company for any loss,
damage, cost, expense (including attorneys' fees and disbursements),
liability or claim which does not arise from willful misfeasance, bad faith
or negligence on the part of Custodian. Custodian shall be entitled to rely
on and may act upon advice of counsel in all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice. In no event shall Custodian be liable for special, incidental or
consequential damages, even if Custodian has been advised of the possibility
of such damages, or be liable in any manner whatsoever for any action taken
or omitted upon instructions from the Company, the Portfolio or any agent of
either of them.
7.2 Actual Collection Required. Custodian shall not be liable for, or
considered to be the custodian of, any funds belonging to the Portfolio or
any money represented by a check, draft or other instrument for the payment
of money, until Custodian or its agents actually receive such funds or
collect on such instrument.
7.3 No Responsibility for Title, etc. So long as and to the extent
that it is in the exercise of reasonable care, Custodian shall not be
responsible for the title, validity or genuineness of any assets or evidence
of title thereto received or delivered by it or its agents.
7.4 Limitation on Duty to Collect. Custodian shall promptly notify the
Company whenever any money or property due and payable from or on account of
any securities or other assets held hereunder for the Portfolio is not
timely received by it. Custodian shall not, however, be required to enforce
collection, by legal means or otherwise, of any such money or other property
not paid when due, but shall receive the proceeds of such collections as may
be effected by it or its agents in the ordinary course of Custodian's
custody and safekeeping business or of the custody and safekeeping business
of such agents.
7.5 Express Duties Only. Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against Custodian. Custodian shall have no discretion whatsoever
with respect to the management, disposition or investment of the Custody
Account and is not a fiduciary to the Portfolio or the Company. In
particular, Custodian shall not be under any obligation at any time to
monitor or to take any other action with respect to compliance by the
Portfolio or the Company with the 1940 Act, the provisions of the Company's
charter documents or by-laws, or the Portfolio's investment objectives,
policies and limitations as in effect from time to time.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. The Portfolio shall indemnify and hold harmless
Custodian, any sub-custodian appointed pursuant to this Agreement and any
nominee of any of them, from and against any loss, damages, cost, expense
(including attorneys' fees and disbursements), liability (including, without
limitation, liability arising under the Securities Act of 1933, the
Securities Exchange Act of 1934, the 1940 Act, and any federal, state or
foreign securities and/or banking laws) or claim arising directly or
indirectly (a) from the fact that securities or other assets in the Custody
Account are registered in the name of any such nominee, or (b) from any
action or inaction, with respect to the Portfolio, by Custodian or such
sub-custodian or nominee (i) at the request or direction of or in reliance
on the advice of the Company or any of its agents, or (ii) upon Proper
Instructions, or (c) generally, from the performance of its obligations
under this Agreement, provided that Custodian, any such sub-custodian or any
nominee of any of them shall not be indemnified and held harmless from and
against any such loss, damage, cost, expense, liability or claim arising
from willful misfeasance, bad faith or negligence on the part of Custodian
or any such sub-custodian or nominee.
8.2 Indemnity to be Provided. If the Company requests Custodian to take
any action with respect to securities or other assets of the Portfolio,
which may, in the opinion of Custodian, result in Custodian or its nominee
becoming liable for the payment of money or incurring liability of some
other form, Custodian shall not be required to take such action until the
Portfolio shall have provided indemnity therefor to Custodian in an amount
and form satisfactory to Custodian. In no event shall the Company be liable
for special, incidental or consequential damages, even if the Company has
been advised of the possibility of such damages.
8.3 Security. As security for the payment of any present or future
obligation or liability of any kind which the Portfolio may have to
Custodian with respect to or in connection with the Custody Account or this
Agreement, or which the Portfolio may otherwise have to Custodian, the
Company hereby pledges to Custodian all securities, funds and other assets
of every kind which are in such Custody Account or otherwise held for the
Portfolio by Custodian, and hereby grants to Custodian a lien, right of
set-off and continuing security interest in such securities, funds and other
assets.
ARTICLE IX
FORCE MAJEURE
Custodian shall not be liable for any failure or delay in performance
of its obligations under this Agreement arising out of or caused, directly
or indirectly, by circumstances beyond its reasonable control, including,
without limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; strikes; epidemics; riots; power failures;
computer failure and any such circumstances beyond its reasonable control as
may cause interruption, loss or malfunction of utility, transportation,
computer (hardware or software) or telephone communication service;
accidents; labor disputes; acts of civil or military authority; actions by
any governmental authority, de jure or de facto; or inability to obtain
labor, material, equipment or transportation.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 Representations With Respect to Portfolio. The Company represents
and warrants that (a) it has all necessary power and authority to perform
the obligations hereunder of the Portfolio, (b) the execution and delivery
by it of this Agreement, and the performance by it of the obligations
hereunder of the Portfolio, have been duly authorized by all necessary
action and will not violate any law, regulation, charter, by-law, or other
instrument, restriction or provision applicable to it or the Portfolio or by
which it or the Portfolio, or their respective assets, may be bound, and (c)
this Agreement constitutes a legal, valid and binding obligation of the
Portfolio, enforceable against it in accordance with its terms.
10.2 Representations of Custodian. Custodian represents and warrants
that (a) it has all necessary power and authority to perform its obligations
hereunder, (b) the execution and delivery by it of this Agreement, and the
performance by it of its obligations hereunder, have been duly authorized by
all necessary action and will not violate any law, regulation, charter, by-
law, or other instrument, restriction or provision applicable to it or by
which it or its assets may be bound, and (c) this Agreement constitutes a
legal, valid and binding obligation of it, enforceable against it in
accordance with its terms.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Portfolio shall pay Custodian such fees and charges as are set
forth in Exhibit C hereto, as such Exhibit C may from time to time be
revised by Custodian upon 14 days' prior written notice to the Portfolio.
Any annual fee payable by the Portfolio shall be calculated on the basis of
the total market value of the assets in the Custody Account as determined on
the last Business Day of the month for which such fee is charged; and such
fee, and any transaction charges payable by the Portfolio, shall be paid
monthly by automatic deduction from funds available therefor in the Custody
Account, or, if there are no such funds, upon presentation of an invoice
therefor. Out-of-pocket expenses incurred by Custodian in the performance of
its services hereunder, and all other proper charges and disbursements of
the Custody Account, shall be charged to such Custody Account by Custodian
and paid in the same manner as the annual fee and other charges referred to
in this Article XI .
ARTICLE XII
TAXES
Any and all taxes, including any interest and penalties with respect
thereto, which may be levied or assessed under present or future laws or in
respect of the Custody Account or any income thereof shall be charged to the
Custody Account by Custodian and paid in the same manner as the annual fee
and other charges referred to in Article XI above.
ARTICLE XIII
AUTHORIZED PERSONS; NOTICES
13.1 Authorized Persons. Custodian may rely upon and act in accordance
with any notice, confirmation, instruction or other communication received
by it from the Company which is reasonably believed by Custodian to have
been given or signed on behalf of the Company by one of the Authorized
Persons designated by the Company in Exhibit A hereto, as it may from time
to time be revised. The Company may revise Exhibit A hereto at any time by
notice in writing to Custodian given in accordance with Section 13.4 below,
but no revision of Exhibit A hereto shall be effective until Custodian
actually receives such notice.
13.2 Investment Advisers. Custodian may also act in accordance with any
Written or Oral Instructions which are reasonably believed by Custodian to
have been given or signed by one of the persons designated from time to time
by any of the investment advisers of the Portfolio specified in Exhibit B
hereto as it may from time to time be revised. The Company may revise
Exhibit B hereto at any time by notice in writing to Custodian given in
accordance with Section 13.4 below, and each investment adviser specified in
Exhibit B hereto may at any time by like notice designate an Authorized
Person or remove an Authorized Person previously designated by it, but no
revision of Exhibit B hereto and no designation or removal by such
investment adviser shall be effective until Custodian actually receives such
notice.
13.3 Oral Instructions. Custodian may rely upon and act in accordance
with Oral Instructions. All Oral Instructions shall be confirmed to
Custodian in Written Instructions. However, if Written Instructions
confirming Oral Instructions are not received by Custodian prior to a
transaction, it shall in no way affect the validity of the transaction
authorized by such Oral Instructions or the authorization given by an
Authorized Person to effect such transaction. Custodian shall incur no
liability to the Portfolio or the Company in acting upon Oral Instructions.
To the extent such Oral Instructions vary from any confirming Written
Instructions, Custodian shall advise the Company of such variance but unless
confirming Written Instructions are timely received, such Oral Instructions
shall govern.
13.4 Addresses for Notices. Unless otherwise specified herein, all
demands, notices, instructions, and other communications to be given
hereunder shall be sent, delivered or given to the recipient at the address,
or the relevant telephone number, set forth after its name hereinbelow:
If to the Company:
THE DREYFUS PREMIER EQUITY FUNDS, INC.
for DREYFUS PREMIER MARKET NEUTRAL FUND
Attention:
Telephone: ( ) -
Facsimile: ( ) -
If to Custodian:
CUSTODIAL TRUST COMPANY
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President - Trust Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as either party hereto shall have provided to the
other by notice given in accordance with this Section 13.4. Writing shall
include transmissions by or through teletype, facsimile, central processing
unit connection, on-line terminal and magnetic tape.
13.5 Remote Clearance. Written Instructions for the receipt, delivery
or transfer of securities may include, and Custodian shall accept, Remote
Clearance Instructions (as defined hereinbelow) and Bulk Input Instructions
(as defined hereinbelow), provided that such Instructions are given in
accordance with the procedures prescribed by Custodian from time to time as
to content of instructions and their manner and timeliness of delivery by
the Company. Custodian shall be entitled to conclusively assume that all
Remote Clearance Instructions and Bulk Input Instructions have been given by
an Authorized Person, and Custodian is hereby irrevocably authorized to act
in accordance therewith. For purposes of this Agreement, "Remote Clearance
Instructions" means instructions that are input directly via a remote
terminal which is located on the premises of the Company, or of an
investment adviser named in Exhibit B hereto, and linked to Custodian; and
"Bulk Input Instructions" means instructions that are input by bulk input
computer tape delivered to Custodian by messenger or transmitted to it via
such transmission mechanism as the Company and Custodian shall from time to
time agree upon.
ARTICLE XIV
TERMINATION
Either party 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 sixty (60) days after the date of the giving of such
notice. 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 (a) deliver directly to the successor
custodian or its agents all securities (other than securities held in a
Book-Entry System or Securities Depository) and other assets then owned by
the Portfolio and held by Custodian as custodian, and (b) transfer any
securities held in a Book-Entry System or Securities Depository to an
account of or for the benefit of the Portfolio, provided that the Portfolio
shall have paid to Custodian all fees, expenses and other amounts to the
payment or reimbursement of which it shall then be entitled.
ARTICLE XV
MISCELLANEOUS
15.1 Business Days. Nothing contained in this Agreement shall require
Custodian to perform any function or duty on a day other than a Business
Day.
15.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
15.3 References to Custodian. The Company shall not circulate any
printed matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained in the
prospectus or statement of additional information for the Portfolio and such
other printed matter as merely identifies Custodian as custodian for the
Portfolio. The Company shall submit printed matter requiring approval to
Custodian in draft form, allowing sufficient time for review by Custodian
and its counsel prior to any deadline for printing.
15.4 No Waiver. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by either party hereto of any right hereunder
shall not preclude the exercise of any other right, and the remedies
provided herein are cumulative and not exclusive of any remedies provided at
law or in equity.
15.5 Amendments. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by an
instrument in writing executed by the parties hereto.
15.6 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of
which shall be deemed an original but all of which together shall constitute
but one and the same instrument.
15.7 Severability. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not
be affected or impaired thereby.
15.8 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement shall not be
assignable by either party hereto without the written consent of the other
party. Any purported assignment in violation of this Section 15.8 shall be
void.
15.9 Jurisdiction. Any suit, action or proceeding with respect to this
Agreement may be brought in the Supreme Court of the State of New York,
County of New York, or in the United States District Court for the Southern
District of New York, and the parties hereto hereby submit to the non-
exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding, and hereby waive for such purpose any other
preferential jurisdiction by reason of their present or future domicile or
otherwise.
15.10 Headings. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its representative
thereunto duly authorized, all as of the day and year first above written.
DREYFUS PREMIER EQUITY FUNDS, INC. CUSTODIAL TRUST COMPANY
with respect to and on behalf of DREYFUS
PREMIER MARKET NEUTRAL FUND
By: ____________________ By: ______________________
Name: Name:
Title: Title:
EXHIBIT A
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Company to administer the Custody Account of the
Portfolio.
Name
Signature
EXHIBIT B
INVESTMENT ADVISERS
The Dreyfus Corporation
EXHIBIT C
CUSTODY FEES AND TRANSACTION CHARGES
Dreyfus Premier Market Neutral Fund
For purposes of calculating the annual fee hereinafter provided for,
all assets held in the account established pursuant to the Special Custody
Account among the Company, Custodian and Bear Xxxxxxx, dated as of June __,
1998, shall be deemed to be held in the Dreyfus Premier Market Neutral Fund
Custody Account under this Agreement.
The Fund shall pay Sub-Custodian the following fees for assets held in
its Custody Account and the following charges for transactions, all such
fees and charges to be payable monthly:
(1) an annual fee equal to the sum of (a) 0.03% (three basis points)
per annum of the value of the assets held in the Fund's Custody Account up
to $50 million, plus (b) 0.015% (one and one-half basis points) per annum of
the amount by which the value of such assets is more than $50 million up to
$200 million, plus (c) 0.01% (one basis point) per annum of the amount by
which the value of such assets exceeds $200 million, with each such
percentage fee to be based upon the total market value of such assets as
determined on the last Business Day of the month for which such fee is
charged;
(2) a transaction charge for each repurchase transaction in such
Custody Account which represents a cash sweep investment for the Fund's
account, computed on the basis of a 360-day year and for the actual number
of days such repurchase transaction is outstanding at a rate of 0.10% (ten
basis points) per annum on the amount of the purchase price paid by the Fund
in such repurchase transaction;
(3) a charge of $10 for each "free" transfer of funds from such Custody
Account;
(4) an administrative fee for each purchase in such Custody Account of
shares or other interests in a money market or other fund, which purchase
represents a cash sweep investment for
the Fund's account, computed for each day that there is a positive balance
in such fund to equal 1/365th of 0.10% (ten basis points) on the amount of
such positive balance for such day; and
(5) a service charge for each holding of securities or other assets of
the Fund that are sold by way of private placement or in such other manner
as to require services by Sub-Custodian which in its reasonable judgment are
materially in excess of those ordinarily required for the holding of
publicly traded securities in the United States.
