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PIF Custody Agmt 9-05.doc
CUSTODY AGREEMENT
AGREEMENT, dated as of September 30, 2005 between Principal Investors
Fund, Inc., a corporation organized and existing under the laws of the State of
Maryland having its principal office and place of business at 000 Xxxx Xxxxxx,
Xxx Xxxxxx, Xxxx 00000-0000 (the "Fund") and The Bank of New York, a New York
corporation authorized to do a banking business having its principal office and
place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
"Authorized Person" shall be any person, whether or not an
officer or employee of the Fund, duly authorized by the Fund's board to execute
any Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.
"BNY Affiliate" shall mean any office, branch or subsidiary of
The Bank of New York Company, Inc.
"Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
"Business Day" shall mean any day on which Custodian and
relevant Depositories are open for business.
"Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
Custodian, which is actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
"Composite Currency Unit" shall mean the Euro or any other
composite currency unit consisting of the aggregate of specified amounts of
specified currencies, as such unit may be constituted from time to time.
"Depository" shall include (a) the Book-Entry System, (b) the
Depository Trust Company, (c) any other clearing agency or securities depository
registered with the Securities and Exchange Commission identified to the Fund
from time to time, and (d) the respective successors and nominees of the
foregoing.
"Foreign Depository" shall mean (a) Euroclear, (b) Clearstream
Banking, societe anonyme, (c) each Eligible Securities Depository as defined in
Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to
the Fund from time to time, and (d) the respective successors and nominees of
the foregoing.
"Instructions" shall mean communications actually received by
Custodian by S.W.I.F.T., tested telex, letter, facsimile transmission, or other
method or system specified by Custodian as available for use in connection with
the services hereunder.
"Oral Instructions" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
"Series" shall mean the various portfolios, if any, of the
Fund listed on Schedule II hereto, and if none are listed references to Series
shall be references to the Fund.
"Securities" shall include, without limitation, any common
stock and other equity securities, bonds, debentures and other debt securities,
notes, mortgages or other obligations, and any instruments representing rights
to receive, purchase, or subscribe for the same, or representing any other
rights or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
"Subcustodian" shall mean a bank (including any branch
thereof) or other financial institution (other than a Foreign Depository)
located outside the U.S. which is utilized by Custodian in connection with the
purchase, sale or custody of Securities hereunder and identified to the Fund
from time to time, and their respective successors and nominees.
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
(a) The Fund hereby appoints Custodian as custodian of all Securities and
cash at any time delivered to Custodian during the term of this Agreement, and
authorizes Custodian to hold Securities in registered form in its name or the
name of its nominees. Custodian hereby accepts such appointment and agrees to
establish and maintain one or more securities accounts and cash accounts for
each Series in which Custodian will hold Securities and cash as provided herein.
Custodian shall maintain books and records segregating the assets of each Series
from the assets of any other Series. Such accounts (each, an "Account";
collectively, the "Accounts") shall be in the name of the Fund.
Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian may
agree upon (each a "Special Account"), and Custodian shall reflect therein such
assets as the Fund may specify in a Certificate or Instructions.
Custodian may from time to time establish pursuant to
a written agreement with and for the benefit of a
broker, dealer, futures commission merchant or other third party identified in a
Certificate or Instructions such accounts on such terms and conditions as the
Fund and Custodian shall agree, and Custodian shall transfer to such account
such Securities and money as the Fund may specify in a Certificate or
Instructions.
The Fund hereby represents and warrants, which
representations and warranties shall be continuing and shall
be deemed to be reaffirmed upon each delivery of a Certificate or each giving of
Oral Instructions or Instructions by the Fund, that:
It is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement, and to perform its obligations hereunder;
This Agreement has been duly authorized, executed and delivered by the Fund,
approved by a resolution of its board, constitutes a valid and legally binding
obligation of the Fund, enforceable in accordance with its terms, and there is
no statute, regulation, rule, order or judgment binding on it, and no provision
of its charter or by-laws, nor of any mortgage, indenture, credit agreement or
other contract binding on it or affecting its property, which would prohibit its
execution or performance of this Agreement;
It is conducting its business in substantial compliance with all applicable laws
and requirements, both state and federal, and has obtained all regulatory
licenses, approvals and consents necessary to carry on its business as now
conducted;
It will not use the services provided by Custodian hereunder in any manner that
is, or will result in, a violation of any law, rule or regulation applicable to
the Fund;
Its board or its foreign custody manager, as defined in Rule 17f-5 under the
Investment Company Act of 1940, as amended (the "`40 Act"), has determined that
use of each Subcustodian (including any Replacement Custodian) which Custodian
is authorized to utilize in accordance with Section 1(a) of Article III hereof
satisfies the applicable requirements of the '40 Act and Rule 17f-5 thereunder;
The Fund or its investment adviser has determined that the custody arrangements
of each Foreign Depository provide reasonable safeguards against the custody
risks associated with maintaining assets with such Foreign Depository within the
meaning of Rule 17f-7 under the `40 Act;
It is fully informed of the protections and risks associated with various
methods of transmitting Instructions and Oral Instructions and delivering
Certificates to Custodian, shall, and shall cause each Authorized Person, to
safeguard and treat with extreme care any user and authorization codes,
passwords and/or authentication keys, understands that there may be more secure
methods of transmitting or delivering the same than the methods selected by it,
agrees that the security procedures (if any) to be followed in connection
therewith provide a commercially reasonable degree of protection in light of its
particular needs and circumstances, and acknowledges and agrees that when
Custodian receives Instructions which appear on their face to have been
transmitted by an Authorized Person via (i) computer facsimile, email, the
Internet or other insecure electronic method, or (ii) secure electronic
transmission containing applicable authorization codes, passwords and/or
authentication keys, Custodian cannot determine the identity of the actual
sender of such Instructions and that Custodian shall conclusively presume that
such Instructions have been sent by an Authorized Person.
It shall manage its borrowings, including, without
limitation, any advance or overdraft (including any
day-light overdraft) in the Accounts, so that the aggregate of its total
borrowings for each Series does not exceed the amount such Series is permitted
to borrow under the `40 Act;
Its transmission or giving of, and Custodian acting upon and in reliance on,
Certificates, Instructions, or Oral Instructions pursuant to this Agreement
shall at all times comply with the `40 Act;
It shall impose and maintain restrictions on the destinations to which cash may
be disbursed by Instructions to ensure that each disbursement is for a proper
purpose; and
It has the right to make the pledge and grant the security interest and security
entitlement to Custodian contained in Section 1 of Article V hereof, free of any
right of redemption or prior claim of any other person or entity, such pledge
and such grants shall have a first priority subject to no setoffs,
counterclaims, or other liens or grants prior to or on a parity therewith, and
it shall take such additional steps as Custodian may require to assure such
priority.
The Fund hereby covenants that it shall from time to
time complete and execute and deliver to Custodian
upon Custodian's request a Form FR U-1 (or successor form) whenever the Fund
borrows from Custodian any money to be used for the purchase or carrying of
margin stock as defined in Federal Reserve Regulation U.
In no event shall the Fund be liable to Custodian or any third
party for any Losses due to forces beyond the control of the Fund, including
without limitation strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural catastrophes or acts of God, or
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services.
CUSTODY AND RELATED SERVICES
(a) Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any Securities received by it from time to time for the Fund's account.
Custodian shall be entitled to utilize, subject to subsection (c) of this
Section 1, Depositories, Subcustodians, and, subject to subsection (d) of this
Section 1, Foreign Depositories, to the extent possible in connection with its
performance hereunder. Securities and cash held in a Depository or Foreign
Depository will be held subject to the rules, terms and conditions of such
entity. Securities and cash held through Subcustodians shall be held subject to
the terms and conditions of Custodian's agreements with such Subcustodians.
Subcustodians may be authorized to hold Securities in Foreign Depositories in
which such Subcustodians participate. Unless otherwise required by local law or
practice or a particular subcustodian agreement, Securities deposited with a
Subcustodian, a Depositary or a Foreign Depository will be held in a commingled
account, in the name of Custodian, holding only Securities held by Custodian as
custodian for its customers. Custodian shall identify on its books and records
the Securities and cash belonging to the Fund, whether held directly or
indirectly through Depositories, Foreign Depositories, or Subcustodians.
Custodian shall, directly or indirectly through Subcustodians, Depositories, or
Foreign Depositories, endeavor, to the extent feasible, to hold Securities in
the country or other jurisdiction in which the principal trading market for such
Securities is located, where such Securities are to be presented for
cancellation and/or payment and/or registration, or where such Securities are
acquired. Custodian at any time may cease utilizing any Subcustodian and/or may
replace a Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that utilization of such
Replacement Subcustodian satisfies the requirements of the `40 Act and Rule
17f-5 thereunder.
Unless Custodian has received a Certificate or Instructions to
the contrary, Custodian shall hold Securities indirectly through a Subcustodian
only if (i) the Securities are not subject to any right, charge, security
interest, lien or claim of any kind in favor of such Subcustodian or its
creditors or operators, including a receiver or trustee in bankruptcy or similar
authority, except for a claim of payment for the safe custody or administration
of Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
With respect to each Depository, Custodian (i) shall
exercise due care in accordance with reasonable
commercial standards in discharging its duties as a securities intermediary to
obtain and thereafter maintain Securities or financial assets deposited or held
in such Depository, and (ii) will provide, promptly upon request by the Fund,
such reports as are available concerning the internal accounting controls and
financial strength of Custodian.
With respect to each Foreign Depository, Custodian
shall exercise reasonable care, prudence, and diligence
(i) to provide the Fund with an analysis of the custody risks associated with
maintaining assets with the Foreign Depository, and (ii) to monitor such custody
risks on a continuing basis and promptly notify the Fund of any material change
in such risks. The Fund acknowledges and agrees that such analysis and
monitoring shall be made on the basis of, and limited by, information gathered
from Subcustodians or through publicly available information otherwise obtained
by Custodian, and shall not include any evaluation of Country Risks. As used
herein the term "Country Risks" shall mean with respect to any Foreign
Depository: (a) the financial infrastructure of the country in which it is
organized, (b) such country's prevailing custody and settlement practices, (c)
nationalization, expropriation or other governmental actions, (d) such country's
regulation of the banking or securities industry, (e) currency controls,
restrictions, devaluations or fluctuations, and (f) market conditions which
affect the order execution of securities transactions or affect the value of
securities.
Custodian shall furnish the Fund with an advice of daily transactions (including
a confirmation of each transfer of Securities) and a monthly summary of all
transfers to or from the Accounts.
With respect to all Securities held hereunder, Custodian
shall, unless otherwise instructed to the contrary: Receive
all income and other payments and advise the Fund as promptly
as practicable of any such amounts due but not
paid;
Present for payment and receive the amount paid upon all Securities which may
mature and advise the Fund as promptly as practicable of any such amounts due
but not paid;
Forward to the Fund copies of all information or documents that it may actually
receive from an issuer of Securities which, in the opinion of Custodian, are
intended for the beneficial owner of Securities;
Execute, as custodian, any certificates of ownership, affidavits, declarations
or other certificates under any tax laws now or hereafter in effect in
connection with the collection of bond and note coupons;
Hold directly or through a Depository, a Foreign Depository, or a Subcustodian
all rights and similar Securities issued with respect to any Securities credited
to an Account hereunder; and
Endorse for collection checks, drafts or other
negotiable instruments.
(a) Custodian shall timely notify the Fund of rights
or discretionary actions with respect to
Securities held hereunder, and of the date or dates by when such rights must be
exercised or such action must be taken, provided that Custodian has actually
received, from the issuer or the relevant Depository (with respect to Securities
issued in the United States) or from the relevant Subcustodian, Foreign
Depository, or a nationally or internationally recognized bond or corporate
action service to which Custodian subscribes, timely notice of such rights or
discretionary corporate action or of the date or dates such rights must be
exercised or such action must be taken. Absent actual receipt of such notice,
Custodian shall have no liability for failing to so notify the Fund.
Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business Days
prior to the last scheduled date to act with respect to such Securities (or such
earlier date or time as Custodian may specify to the Fund). Absent Custodian's
timely receipt of such Certificate or Instructions, Custodian shall not be
liable for failure to take any action relating to or to exercise any rights
conferred by such Securities.
All voting rights with respect to Securities, however
registered, shall be exercised by the Fund or its
designee. Custodian will make available to the Fund proxy voting services upon
the request of, and for the jurisdictions selected by, the Fund in accordance
with terms and conditions to be mutually agreed upon by Custodian and the Fund.
Custodian shall promptly advise the Fund upon Custodian's
actual receipt of notification of the partial redemption, partial payment or
other action affecting less than all Securities of the relevant class. If
Custodian, any Subcustodian, any Depository, or any Foreign Depository holds any
Securities in which the Fund has an interest as part of a fungible mass,
Custodian, such Subcustodian, Depository, or Foreign Depository may select the
Securities to participate in such partial redemption, partial payment or other
action in any non-discriminatory manner that it customarily uses to make such
selection.
Custodian shall not under any circumstances accept bearer
interest coupons which have been stripped from United States federal, state or
local government or agency securities unless explicitly agreed to by Custodian
in writing.
The Fund shall be liable for all taxes, assessments, duties
and other governmental charges, including any interest or penalty with respect
thereto ("Taxes"), with respect to any cash or Securities held on behalf of the
Fund or any transaction related thereto. The Fund shall indemnify Custodian and
each Subcustodian for the amount of any Tax that Custodian, any such
Subcustodian or any other withholding agent is required under applicable laws
(whether by assessment or otherwise) to pay on behalf of, or in respect of
income earned by or payments or distributions made to or for the account of the
Fund (including any payment of Tax required by reason of an earlier failure to
withhold). Custodian shall, or shall instruct the applicable Subcustodian or
other withholding agent to, withhold the amount of any Tax which is required to
be withheld under applicable law upon collection of any dividend, interest or
other distribution made with respect to any Security and any proceeds or income
from the sale, loan or other transfer of any Security. In the event that
Custodian or any Subcustodian is required under applicable law to pay any Tax on
behalf of the Fund, Custodian is hereby authorized to withdraw cash from any
cash account in the amount required to pay such Tax and to use such cash, or to
remit such cash to the appropriate Subcustodian or other withholding agent, for
the timely payment of such Tax in the manner required by applicable law. If the
aggregate amount of cash in all cash accounts is not sufficient to pay such Tax,
Custodian shall promptly notify the Fund of the additional amount of cash (in
the appropriate currency) required, and the Fund shall directly deposit such
additional amount in the appropriate cash account promptly after receipt of such
notice, for use by Custodian as specified herein. In the event that Custodian
reasonably believes that Fund is eligible, pursuant to applicable law or to the
provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax
which is otherwise required to be withheld or paid on behalf of the Fund under
any applicable law, Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold or pay such Tax at such
reduced rate or refrain from withholding or paying such Tax, as appropriate;
provided that Custodian shall have received from the Fund all documentary
evidence of residence or other qualification for such reduced rate or exemption
required to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is obtainable only by means of an application for refund, Custodian and the
applicable Subcustodian shall have no responsibility for the accuracy or
validity of any forms or documentation provided by the Fund to Custodian
hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and
each Subcustodian in respect of any liability arising from any underwithholding
or underpayment of any Tax which results from the inaccuracy or invalidity of
any such forms or other documentation, and such obligation to indemnify shall be
a continuing obligation of the Fund, its successors and assigns notwithstanding
the termination of this Agreement.
(a) For the purpose of settling Securities and foreign
exchange transactions, the Fund shall provide Custodian with sufficient
immediately available funds for all transactions by such time and date as
conditions in the relevant market dictate. As used herein, "sufficient
immediately available funds" shall mean either (i) sufficient cash denominated
in U.S. dollars to purchase the necessary foreign currency, or (ii) sufficient
applicable foreign currency, to settle the transaction. Custodian shall provide
the Fund with immediately available funds each day which result from the actual
settlement of all sale transactions, based upon advices received by Custodian
from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be
in U.S. dollars or such other currency as the Fund may specify to Custodian.
Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a BNY Affiliate
acting as principal or otherwise through customary banking channels. The Fund
may issue a standing Certificate or Instructions with respect to foreign
exchange transactions, but Custodian may establish rules or limitations
concerning any foreign exchange facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding cash denominated in a
foreign currency.
To the extent that Custodian has agreed to provide
pricing or other information services in connection with
this Agreement, Custodian is authorized to utilize any vendor (including brokers
and dealers of Securities) reasonably believed by Custodian to be reliable to
provide such information. The Fund understands that certain pricing information
with respect to complex financial instruments (e.g., derivatives) may be based
on calculated amounts rather than actual market transactions and may not reflect
actual market values, and that the variance between such calculated amounts and
actual market values may or may not be material. Where vendors do not provide
information for particular Securities or other property, an Authorized Person
may advise Custodian in a Certificate regarding the fair market value of, or
provide other information with respect to, such Securities or property as
determined by it in good faith. Custodian shall not be liable for any loss,
damage or expense incurred as a result of errors or omissions with respect to
any pricing or other information utilized by Custodian hereunder.
Until such time as Custodian receives a certificate to the contrary
with respect to a particular Security, Custodian may release the identity of the
Fund to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and shareholder.
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
Promptly after each purchase or sale of Securities by the Fund, the Fund
shall deliver to Custodian a Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be settled on the same day
the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
The Fund understands that when Custodian is instructed to
deliver Securities against payment, delivery of such Securities and receipt of
payment therefor may not be completed simultaneously. Notwithstanding any
provision in this Agreement to the contrary, settlements, payments and
deliveries of Securities may be effected by Custodian or any Subcustodian in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction in which the transaction
occurs, including, without limitation, delivery to a purchaser or dealer
therefor (or agent) against receipt with the expectation of receiving later
payment for such Securities. The Fund assumes full responsibility for all risks,
including, without limitation, credit risks, involved in connection with such
deliveries of Securities.
Custodian may, as a matter of bookkeeping convenience or by
separate agreement with the Fund, credit the Account with the proceeds from the
sale, redemption or other disposition of Securities or interest, dividends or
other distributions payable on Securities prior to its actual receipt of final
payment therefor. All such credits shall be conditional until Custodian's actual
receipt of final payment and may be reversed by Custodian with prior notice to
the Fund, to the extent that final payment is not received. Payment with respect
to a transaction will not be "final" until Custodian shall have received
immediately available funds which under applicable local law, rule and/or
practice are irreversible and not subject to any security interest, levy or
other encumbrance, and which are specifically applicable to such transaction.
OVERDRAFTS OR INDEBTEDNESS
If Custodian should in its sole discretion advance funds on behalf of any
Series which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Series shall be insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises in the separate
account of a Series for some other reason, including, without limitation,
because of a reversal of a conditional credit or the purchase of any currency,
or if the Fund is for any other reason indebted to Custodian with respect to a
Series, including any indebtedness to The Bank of New York under the Fund's Cash
Management and Related Services Agreement (except a borrowing for investment or
for temporary or emergency purposes using Securities as collateral pursuant to a
separate agreement and subject to the provisions of Section 2 of this Article),
such overdraft or indebtedness shall be deemed to be a loan made by Custodian to
the Fund for such Series payable on demand and shall bear interest from the date
incurred at a rate per annum ordinarily charged by Custodian to its
institutional customers, as such rate may be adjusted from time to time. In
addition, the Fund hereby agrees that Custodian shall to the maximum extent
permitted by law have a continuing lien, security interest, and security
entitlement in and to any property, including, without limitation, any
investment property or any financial asset, of such Series at any time held by
Custodian for the benefit of such Series or in which such Series may have an
interest which is then in Custodian's possession or control or in possession or
control of any third party acting in Custodian's behalf. The Fund authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Series' credit on Custodian's books.
If the Fund borrows money from any bank (including Custodian
if the borrowing is pursuant to a separate agreement) for investment or for
temporary or emergency purposes using Securities held by Custodian hereunder as
collateral for such borrowings, the Fund shall deliver to Custodian a
Certificate specifying with respect to each such borrowing: (a) the Series to
which such borrowing relates; (b) the name of the bank, (c) the amount of the
borrowing, (d) the time and date, if known, on which the loan is to be entered
into, (e) the total amount payable to the Fund on the borrowing date, (f) the
Securities to be delivered as collateral for such loan, including the name of
the issuer, the title and the number of shares or the principal amount of any
particular Securities, and (g) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such loan is
in conformance with the `40 Act and the Fund's prospectus. Custodian shall
deliver on the borrowing date specified in a Certificate the specified
collateral against payment by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount payable as set
forth in the Certificate. Custodian may, at the option of the lending bank, keep
such collateral in its possession, but such collateral shall be subject to all
rights therein given the lending bank by virtue of any promissory note or loan
agreement. Custodian shall deliver such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this Section. The Fund shall cause all Securities released from
collateral status to be returned directly to Custodian, and Custodian shall
receive from time to time such return of collateral as may be tendered to it. In
the event that the Fund fails to specify in a Certificate the Series, the name
of the issuer, the title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by Custodian, Custodian
shall not be under any obligation to deliver any Securities.
SALE AND REDEMPTION OF SHARES
Whenever the Fund shall sell any shares issued by the Fund ("Shares") it
shall deliver to Custodian a Certificate or Instructions specifying the amount
of money and/or Securities to be received by Custodian for the sale of such
Shares and specifically allocated to an Account for the appropriate Series.
Upon receipt of such money, Custodian shall credit such money
to an Account in the name of the Series for which such money was received.
Except as provided hereinafter, whenever the Fund desires
Custodian to make payment out of the money held by Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to Custodian a
Certificate or Instructions specifying the total amount to be paid for such
Shares. Custodian shall make payment of such total amount to the transfer agent
specified in such Certificate or Instructions out of the money held in an
Account of the appropriate Series.
Notwithstanding the above provisions regarding the redemption
of any Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, Custodian, unless
otherwise instructed by a Certificate or Instructions, shall, upon presentment
of such check, charge the amount thereof against the money held in the Account
of the Series of the Shares being redeemed, provided, that if the Fund or its
agent timely advises Custodian that such check is not to be honored, Custodian
shall return such check unpaid.
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
Whenever the Fund shall determine to pay a dividend or distribution on
Shares it shall furnish to Custodian Instructions or a Certificate setting forth
with respect to the Series specified therein the date of the declaration of such
dividend or distribution, the total amount payable, and the payment date.
Upon the payment date specified in such Instructions or
Certificate, Custodian shall pay out of the money held for the account of such
Series the total amount payable to the dividend agent of the Fund specified
therein.
CONCERNING CUSTODIAN
(a) Custodian shall exercise such good faith, reasonable care, diligence,
and prudence as a professional custodian for securities would exercise in
carrying out all of these duties and obligations. Except as otherwise expressly
provided herein, Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees (collectively,
"Losses"), incurred by or asserted against the Fund, except those Losses arising
out of Custodian's own negligence or willful misconduct. With respect to any
Losses related to the loss of Securities as a direct result of Custodian's
negligence or willful misconduct, the liability of Custodian shall be limited
to: (i) the lesser of replacement of any such Securities or the market value
thereof calculated at the time of the occurrence of such loss and (ii) the value
of any loss of rights or privileges resulting from such loss or destruction. In
no event shall Custodian's total liability for any such loss of Securities
exceed the total amount of the fees paid by the Fund to Custodian for services
hereunder for a period of twelve consecutive calendar months prior to the
occurrence of such loss or such lesser period of time if this Agreement has not
been in effect for twelve consecutive calendar months. Except as otherwise
specifically provided herein, in no event shall Custodian be liable for special,
indirect or consequential damages even if Custodian has been advised of the
possibility of such damages.
Without limiting the foregoing, with respect to any Losses
incurred by the Fund as a result of the act or failure to act by a Subcustodian
listed on Schedule 1, Custodian shall be liable to the Fund for such Losses, but
only to the extent such Losses arise out of or are caused by acts or failure to
act by such Subcustodian for which it is liable under the terms of its agreement
with Custodian and the laws governing such agreement. With respect to any Losses
incurred by the Fund as a result of the acts or omission of a Subcustodian not
listed on Schedule 1, Custodian shall take appropriate action to recover such
Losses, and Custodian's liability shall be limited to the amount recovered net
of reasonable costs and expenses. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories or Foreign Depositories except to
the extent such action or inaction is a direct result of the Custodian's failure
to fulfill its duties hereunder. Neither Custodian nor any Subcustodian shall be
liable: (i) for acting in accordance with any Certificate or Oral Instructions
actually received by Custodian and reasonably believed by Custodian to be given
by an Authorized Person; (ii) for acting in accordance with Instructions without
reviewing the same; (iii) for conclusively presuming that all Instructions other
than Oral Instructions are given only by person(s) duly authorized; (iv) for
conclusively presuming that all disbursements of cash directed by the Fund,
whether by a Certificate, an Oral Instruction, or an Instruction, are in
accordance with Section 2(i) of Article II hereof; (v) for holding property in
any particular country, including, but not limited to, Losses resulting from
nationalization, expropriation or other governmental actions; regulation of the
banking or securities industry; exchange or currency controls or restrictions,
devaluations or fluctuations; availability of cash or Securities or market
conditions which prevent the transfer of property or execution of Securities
transactions or affect the value of property; (vi) for any Losses due to forces
beyond the reasonable control of Custodian, including without limitation general
strikes or work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear or natural catastrophes or acts of God, or loss or malfunctions of
public utilities, non-internal communication services, and (but only to the
extent beyond Custodian's reasonable control and not due to Custodian's
negligence or willful misconduct, and provided that Custodian is maintaining
such back-up system(s) and disaster recovery plan(s) as are required by its
regulators and all laws applicable to Custodian) loss or malfunction of internal
communication services or of computer (software or hardware) services; it being
understood that Custodian shall use commercially reasonable best efforts to
resume performance as soon as practicable under the circumstances; (vii) for the
insolvency of any Subcustodian (other than a BNY Affiliate), any Depository, and
(except to the extent such action or inaction is a direct result of the
Custodian's failure to fulfill its duties hereunder) any Foreign Depository; or
(viii) for any Losses arising from the applicability of any law or regulation
now or hereafter in effect, or from the occurrence of any event, including,
without limitation, implementation or adoption of any rules or procedures of a
Foreign Depository, which may affect, limit, prevent or impose costs or burdens
on, the transferability, convertibility, or availability of any currency or
Composite Currency Unit in any country or on the transfer of any Securities, and
in no event shall Custodian be obligated to substitute another currency for a
currency (including a currency that is a component of a Composite Currency Unit)
whose transferability, convertibility or availability has been affected,
limited, or prevented by such law, regulation or event, and to the extent that
any such law, regulation or event imposes a cost or charge upon Custodian in
relation to the transferability, convertibility, or availability of any cash
currency or Composite Currency Unit, such cost or charge shall be for the
account of the Fund, and Custodian may treat any account denominated in an
affected currency as a group of separate accounts denominated in the relevant
component currencies.
Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and
on such terms and conditions as it deems necessary or appropriate to perform its
services hereunder. No such subcontract, agreement or understanding shall
discharge Custodian from its obligations hereunder.
The Fund agrees to indemnify Custodian and hold
Custodian harmless from and against any and all Losses
sustained or incurred by or asserted against Custodian by reason of or as a
result of any action or inaction, or arising out of Custodian's performance
hereunder, including reasonable fees and expenses of counsel incurred by
Custodian in a successful defense of claims by the Fund; provided however, that
the Fund shall not indemnify Custodian for those Losses arising out of
Custodian's own negligence or willful misconduct. This indemnity shall be a
continuing obligation of the Fund, its successors and assigns, notwithstanding
the termination of this Agreement, until expiration of the applicable statute of
limitations.
Without limiting the generality of the foregoing,
Custodian shall be under no obligation to inquire into,
and shall not be liable for:
Any Losses incurred by the Fund or any other person as a
result of the receipt or acceptance of fraudulent, forged or invalid Securities,
or Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
The validity of the issue of any Securities purchased, sold, or written by or
for the Fund, the legality of the purchase, sale or writing thereof, or the
propriety of the amount paid or received therefor;
The legality of the sale or redemption of any Shares, or the propriety of the
amount to be received or paid therefor;
The legality of the declaration or payment of any dividend or distribution by
the Fund;
The legality of any borrowing by the Fund;
The legality of any loan of portfolio Securities, nor shall Custodian be under
any duty or obligation to see to it that any cash or collateral delivered to it
by a broker, dealer or financial institution or held by it at any time as a
result of such loan of portfolio Securities is adequate security for the Fund
against any loss it might sustain as a result of such loan, which duty or
obligation shall be the sole responsibility of the Fund. In addition, Custodian
shall be under no duty or obligation to see that any broker, dealer or financial
institution to which portfolio Securities of the Fund are lent makes payment to
it of any dividends or interest which are payable to or for the account of the
Fund during the period of such loan or at the termination of such loan,
provided, however that Custodian shall promptly notify the Fund in the event
that such dividends or interest are not paid and received when due;
The sufficiency or value of any amounts of money
and/or Securities held in any Special Account in
connection with transactions by the Fund; whether any broker, dealer, futures
commission merchant or clearing member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, futures commission merchant or clearing
member, or whether any payment received by Custodian from any broker, dealer,
futures commission merchant or clearing member is the amount the Fund is
entitled to receive, or to notify the Fund of Custodian's receipt or non-receipt
of any such payment; or
Whether any Securities at any time delivered to, or held by it or by any
Subcustodian, for the Account of the Fund and specifically allocated to a Series
are such as properly may be held by the Fund or such Series under the provisions
of its then current prospectus and statement of additional information, or to
ascertain whether any transactions by the Fund, whether or not involving
Custodian, are such transactions as may properly be engaged in by the Fund.
Custodian may, with respect to questions of law
specifically regarding an Account, obtain the advice and
opinion of counsel to the independent board members of a Fund or other counsel
that is mutually agreed upon by the Funds and the Custodian and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice.
Custodian shall be under no obligation to take action to
collect any amount payable on Securities in default, or if payment is refused
after due demand and presentment.
Custodian shall have no duty or responsibility to inquire
into, make recommendations, supervise, or determine the suitability of any
transactions affecting any Account.
The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with the conversion of the
Fund's Securities hereunder and the transfer of Securities and records kept in
connection with this Agreement. The Fund shall also reimburse Custodian for
out-of-pocket expenses which are a normal incident of the services provided
hereunder.
Custodian has the right to debit any cash account for any
amount payable by a Series of the Fund in connection with any and all
obligations of the Series of the Fund to Custodian. In addition to the rights of
Custodian under applicable law and other agreements, at any time when the Fund
shall not have honored any of its obligations to Custodian, Custodian shall have
the right with timely subsequent notice to the Fund, to retain or set-off,
against such obligations of the Fund, any Securities or cash Custodian or a BNY
Affiliate may directly or indirectly hold for the account of the Fund, and any
obligations (whether matured or unmatured) that Custodian or a BNY Affiliate may
have to the Fund in any currency or Composite Currency Unit. Any such asset of,
or obligation to, the Fund may be transferred to Custodian and any BNY Affiliate
in order to effect the above rights.
The Fund agrees to forward to Custodian a Certificate or
Instructions confirming Oral Instructions by the close of business of the same
day that such Oral Instructions are given to Custodian. The Fund agrees that the
fact that such confirming Certificate or Instructions are not received or that a
contrary Certificate or contrary Instructions are received by Custodian shall in
no way affect the validity or enforceability of transactions authorized by such
Oral Instructions and effected by Custodian. If the Fund elects to transmit
Instructions through an on-line communications system offered by Custodian, the
Fund's use thereof shall be subject to the Terms and Conditions attached as
Appendix I hereto. If Custodian receives Instructions which appear on their face
to have been transmitted by an Authorized Person via (i) computer facsimile,
email, the Internet or other insecure electronic method, or (ii) secure
electronic transmission containing applicable authorization codes, passwords
and/or authentication keys, the Fund understands and agrees that Custodian
cannot determine the identity of the actual sender of such Instructions and that
Custodian shall conclusively presume that such Written Instructions have been
sent by an Authorized Person, and the Fund shall be responsible for ensuring
that only Authorized Persons transmit such Instructions to Custodian. If the
Fund elects (with Custodian's prior consent) to transmit Instructions through an
on-line communications service owned or operated by a third party, the Fund
agrees that Custodian shall not be responsible or liable for the reliability or
availability of any such service.
The books and records pertaining to the Fund which are in
possession of Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the `40 Act and the
rules thereunder. The Fund, or its authorized representatives, shall have access
to such books and records during Custodian's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by Custodian to the Fund or its authorized representative. Upon the
reasonable request of the Fund, Custodian shall provide in hard copy or on
computer disc any records included in any such delivery which are maintained by
Custodian on a computer disc, or are similarly maintained.
It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law, regulation or
rule now or hereafter in effect. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal accounting control of
a Depository, and with such reports on its own system of internal accounting
control as the Fund may reasonably request from time to time.
Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination, which
shall be not less than ninety (90) days after the date of giving of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the board of the Fund, certified by the Secretary or any
Assistant Secretary, electing to terminate this Agreement and designating a
successor custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits. In the event such notice is given by Custodian, the Fund shall, on or
before the termination date, deliver to Custodian a copy of a resolution of the
board of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to the
successor custodian all Securities and money then owned by the Fund and held by
it as Custodian, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
If a successor custodian is not designated by the Fund or
Custodian in accordance with the preceding Section, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the delivery
by Custodian of all Securities (other than Securities which cannot be delivered
to the Fund) and money then owned by the Fund be deemed to be its own custodian
and Custodian shall thereby be relieved of all duties and responsibilities
pursuant to this Agreement, other than the duty with respect to Securities which
cannot be delivered to the Fund to hold such Securities hereunder in accordance
with this Agreement.
MISCELLANEOUS
Custodian agrees to maintain in strict confidence any and all information
regarding the Funds' portfolio holdings and transactions ("Portfolio
Information") and, unless expressly authorized by a Fund, will not use such
Portfolio Information for any purpose, including for the purpose of engaging in
securities transactions, or disclose such Portfolio Information to any affiliate
or third party, either orally or in writing, for any purpose, other that for the
purpose of performing duties under this Agreement. Custodian agrees to take all
precautions that are reasonable necessary to protect the confidentiality of the
Portfolio Information and will restrict access to the Fund's Portfolio
Information to those employees and agents who need to know such information in
order to perform duties under this Agreement. Notwithstanding the foregoing, it
is understood and agreed that any such Portfolio Information may be disclosed by
Custodian (i) to the Funds' sub-advisors and proxy service providers, (ii) as
required by applicable law, regulation or judicial or regulatory process, (iii)
the rules of any stock exchange or regulatory authority or self-regulatory
organization or any Subcustodian, Depository or Foreign Depository, (iv) as may
be required by the terms of the organizational documents of the issuer of any
Security or the terms of the Security itself, or (v) if it is advised by its
counsel that failure to disclose such information would be unlawful. Unless
prohibited by law or its regulators, Custodian agrees to notify the Fund
promptly upon its receipt of a subpoena, court order or other process requiring
disclosure of the Portfolio Information in order to permit the Fund an
opportunity to seek a protective order or other judicial relief. This provision
shall survive the termination or expiration of this Agreement.
The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Certificates or Oral Instructions of such present
Authorized Persons.
Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Custodian, shall be sufficiently given
if addressed to Custodian and received by it at its offices at Xxx Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may from time to
time designate in writing.
Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently given
if addressed to the Fund and received by it at its offices at 000 Xxxx Xxxxxx,
Xxx Xxxxxx, Xxxx 00000-0000, or at such other place as the Fund may from time to
time designate in writing.
Each and every right granted to either party hereunder or
under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of either party to exercise, and no delay in
exercising, any right will operate as a waiver thereof, nor will any single or
partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected thereby. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties, except that
any amendment to the Schedule I hereto need be signed only by the Fund. This
Agreement shall extend to and shall be binding upon the parties hereto, and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by either party without the written consent of the
other.
This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of laws
principles thereof. The Fund and Custodian hereby consent to the jurisdiction of
a state or federal court situated in New York City, New York in connection with
any dispute arising hereunder. The Fund hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court and any claim that such proceeding brought in such a court has been
brought in an inconvenient forum. The Fund and Custodian each hereby irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Agreement.
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.
The Fund hereby acknowledges that Custodian is subject to
federal laws, including the Customer Identification Program (CIP) requirements
under the USA PATRIOT Act and its implementing regulations, pursuant to which
Custodian must obtain, verify and record information that allows Custodian to
identify the Fund. Accordingly, prior to opening an Account hereunder Custodian
will ask the Fund to provide certain information including, but not limited to,
customer's name, physical address, tax identification number and other
information that will help Custodian to identify and verify the Fund's identity
such as organizational documents, certificate of good standing, license to do
business or other pertinent identifying information. The Fund agrees that
Custodian cannot open an Account hereunder unless and until Custodian verifies
the Fund's identity in accordance with its CIP.
A copy of the Articles of Incorporation of the Fund is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Board of Trustees of the
Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund; provided,
however, that the Articles of incorporation of the Fund provides that the assets
of a particular Series of the Fund shall under no circumstances be charged with
liabilities attributable to any other Series of the Fund and that all persons
extending credit to, or contracting with or having any claim against a
particular Series of the Fund shall look only to the assets of that particular
Series for payment of such credit, contract or claim.
Except as expressly provided in this Agreement, nothing in
this Agreement shall be deemed to create, and both the Fund and Custodian
expressly disclaim, any agency, joint venture, partnership or association
between the Fund and Custodian or any subsidiary or affiliate of either, and
nothing in this Agreement shall be deemed to provide the Fund or Custodian with
the right, power or authority, whether expressed or implied, to create any such
duty or obligation.
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement
to be executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
PRINCIPAL INVESTORS FUND, INC.
/s/A.S. Filean
By: -----------------------------------------------
Name: A.S. Filean
Title: Sr. Vice President & Secretary
/s/X.X. Xxxxx
By: -----------------------------------------------
Name: X.X. Xxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK
By: -----------------------------------------------
Title:
principalcustody.doc
(9-28-05)
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and
acting ________________________ of * (the "Fund"), and further certifies that
the following officers or employees of the Fund have been duly authorized in
conformity with the Fund's Articles of incorporation and By-Laws to deliver
Certificates and Oral Instructions to The Bank of New York ("Custodian")
pursuant to the Custody Agreement between the Fund and Custodian dated
_______________, and that the signatures appearing opposite their names are true
and correct:
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you
may currently have on file.
[seal] By: Title:
Date:
SCHEDULE II
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. This Appendix I shall govern Customer's use of online
communications, information delivery, and electronic banking systems, that
Custodian may provide to Customer, such as The Bank of New York Inform (TM) and
The Bank of New York CA$H-Register Plus(R), (collectively, the "Systems"). In
the event of any conflict between the terms of this Appendix I and the main body
of this Agreement with respect to Customer's use of the Systems, the terms of
this Appendix I shall control.
2. Upon delivery to an Authorized Person or a person reasonably believed by
Custodian to be an Authorized Person of the Fund of software enabling the Fund
to obtain access to the Systems (the "Software"), Custodian grants to the Fund a
personal, nontransferable and nonexclusive license to use the Software solely
for the purpose of transmitting Written Instructions, receiving reports, making
inquiries or otherwise communicating with Custodian in connection with the
Account(s). The Fund shall use the Software solely for its own internal and
proper business purposes and not in the operation of a service bureau. Except as
set forth herein, no license or right of any kind is granted to the Fund with
respect to the Software. The Fund acknowledges that Custodian and its suppliers
retain and have title and exclusive proprietary rights to the Software,
including any trade secrets or other ideas, concepts, know-how, methodologies,
or information incorporated therein and the exclusive rights to any copyrights,
trademarks and patents (including registrations and applications for
registration of either), or other statutory or legal protections available in
respect thereof. The Fund further acknowledges that all or a part of the
Software may be copyrighted or trademarked (or a registration or claim made
therefor) by Custodian or its suppliers. The Fund shall not take any action with
respect to the Software inconsistent with the foregoing acknowledgments, nor
shall you attempt to decompile, reverse engineer or modify the Software. The
Fund may not copy, sell, lease or provide, directly or indirectly, any of the
Software or any portion thereof to any other person or entity without
Custodian's prior written consent. The Fund may not remove any statutory
copyright notice or other notice included in the Software or on any media
containing the Software. The Fund shall reproduce any such notice on any
reproduction of the Software and shall add any statutory copyright notice or
other notice to the Software or media upon Custodian's request.
3. Equipment. The Fund shall obtain and maintain at its own cost and expense all
equipment and services, including but not limited to communications services,
necessary for it to utilize the Software and obtain access to the Systems, and
Custodian shall not be responsible for the reliability or availability of any
such equipment or services.
4. Proprietary Information. The Software, any data base and any proprietary
data, processes, information and documentation made available to the Fund (other
than which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of Custodian or its suppliers. The Fund
shall keep the Information confidential by using the same care and discretion
that the Fund uses with respect to its own confidential property and trade
secrets, but not less than reasonable care. Upon termination of the Agreement or
the Software license granted herein for any reason, the Fund shall return to
Custodian any and all copies of the Information which are in its possession or
under its control.
5. Modifications. Custodian reserves the right to modify the Software from time
to time and the Fund shall install new releases of the Software as Custodian may
direct. The Fund agrees not to modify or attempt to modify the Software without
Custodian's prior written consent. The Fund acknowledges that any modifications
to the Software, whether by the Fund or Custodian and whether with or without
Custodian's consent, shall become the property of Custodian.
6. NO REPRESENTATIONS OR WARRANTIES. It is understood and agreed that the
Systems and Software contains components that are not proprietary to Custodian
and which Custodian has secured the right to license or otherwise make available
to its customers. CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO
ADDITIONAL WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE, SERVICES
OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER
DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY INCUR IN
CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF CUSTODIAN OR
SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT
SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER
BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION
FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND
THEIR REASONABLE CONTROL.
7. Infringement. If any claim, action or proceeding is commenced against the
Fund alleging that the Software or the Systems infringe a patent, trade secret,
trademark, copyright, or other intellectual property rights of a third party,
Custodian will defend and hold the Fund harmless from any and all damages
awarded in a final judgment against the Fund in connection with such claim,
action or proceeding, provided that the Fund shall have promptly notified
Custodian in writing thereof. It is understood and agreed that the failure to
promptly so notify Custodian shall relieve Custodian of its obligation to defend
and indemnify the Fund hereunder. To the extent the Fund seeks indemnity
hereunder, Custodian shall have the right to control the defense of any such
claim, action or proceeding, which cannot be settled by the Fund without
Custodian's prior written consent. The Fund shall cooperate with Custodian and
provide such assistance regarding the claim, action or proceeding as Custodian
may reasonably request.
8. Security; Reliance; Unauthorized Use. The Fund will cause all persons
utilizing the Software and Systems to treat all applicable user and
authorization codes, passwords and authentication keys with extreme care, and it
will establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Instructions received by it through the Systems. The Fund acknowledges that it
is its sole responsibility to assure that only persons duly authorized use the
Systems and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
9. System Acknowledgments. Custodian shall acknowledge through the Systems its
receipt of each transmission communicated through the Systems, and in the
absence of such acknowledgment Custodian shall not be liable for any failure to
act in accordance with such transmission and the Fund may not claim that such
transmission was received by Custodian.
10. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES
LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
11. ENCRYPTION. The Fund acknowledges and agrees that encryption may not be
available for every communication through the Systems, or for all data. The Fund
agrees that Custodian may deactivate any encryption features at any time.
Custodian agrees to provide such advance notice of such deactivation as may be
possible under the circumstances, provided, that it is understood and agreed
that such notice may not be possible if in the reasonable judgment of Custodian
expeditious action is necessary in order to repair or protect the Systems or
Software. Custodian agrees to make reasonable efforts to notify the Fund
promptly of the action taken, and in a case where such action proved to be
erroneous or to require corrective action or ameliorative measures, will provide
such assistance as the Fund may reasonably request.
THE BANK OF NEW YORK
GLOBAL NETWORK MANAGEMENT
============================================================================================================================
============================================================================================================================
[GRAPHIC OMITTED][GRAPHIC OMITTED]
SCHEDULE 1
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--------------------------- SUB-CUSTODIAN
COUNTRY
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-------- ---------------------------- ----------------------------------------------------------------------------
1. Citibank N.A. ARGENTINA
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
2.AUSTRALIA National Australia Bank Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
3.AUSTRIA Bank Austria Creditanstalt AG
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
4.BAHRAIN HSBC Bank Middle East Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
5.BANGLADESH HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
6.BELGIUM ING Belgium SA/NV
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
7.BERMUDA Xxxxxxxxxxx Trust Bermuda, Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
8.BRAZIL Citibank, N.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
9.CANADA
Royal Bank of Canada
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
10.CAYMAN ISLANDS
The Bank of New York
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
00.XXXXXXX ISLANDS
The Bank of New York
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
12..CHILE Citibank, N.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
13.CHINA - SHANGHAI HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
14.CHINA - SHENZHEN HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
15.CYPRUS Bank of Cyprus Public Company Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
16.CZECH REPUBLIC ING N.V. Prague
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
17.DENMARK Danske Bank A/S
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
18.EGYPT Citibank, N.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
19.FINLAND Nordea Bank Finland plc
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
20.FRANCE BNP Paribas Securities Services
Credit Agricole Investor Services Bank
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
21.GERMANY BHF-Bank AG
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
22.GREECE BNP Paribas Securities Services
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
23.HONG KONG HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
24.HUNGARY HVB Bank Hungary Rt.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
25.ICELAND Landsbanki Islands hf
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
26.INDIA HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
27.IRELAND The Bank of New York
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
28.ISRAEL Bank Leumi LE - Israel B.M.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
29.ITALY Banca Intesa S.P.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
30.JAPAN Mizuho Corporate Bank, Ltd.
The Bank of Tokyo-Mitsubishi Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
31.LUXEMBOURG Banque et Caisse d'Espargne de l'Etat
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
32.MALAYSIA HSBC Bank Malaysia Berhad
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
33.MALTA HSBC Bank Malta plc
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
34.MEXICO Banco Nacional de Mexico
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
35.NETHERLANDS ING Bank
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
00.XXX ZEALAND National Australia Bank
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
37.NORWAY DnB Nor Bank ASA
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
38.PAKISTAN Standard Chartered Bank
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
00.XXXX Xxxxxxxx xxx Xxxx
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
40.PHILIPPINES HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
41.POLAND ING Bank Xxxxxx
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
42.PORTUGAL Banco Comercial Portugues
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
43.QATAR HSBC Bank Middle East Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
44.RUSSIA Vneshtorgbank
ING Bank (Eurasia)
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
45.SINGAPORE United Overseas Bank Ltd.
DBS.
Bank Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
46.SLOVAKIA Ceskoslovenska Obchodni Banka, AS
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
47.SLOVENIA Bank Austria Creditanstalt d.d. Ljubljana
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
48.SOUTH AFRICA Standard Bank of South Africa Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
00.XXXXX XXXXX HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
50.
-------- ---------------------------- ----------------------------------------------------------------------------
SPAIN Banco Bilbao Vizcaya Argentaria S.A. (BBVA)
Santander Investment Services, S.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
51.SRI LANKA HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
52.SWEDEN Skandinaviska Enskilda Banken
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
53.SWITZERLAND Credit Suisse, Zurich
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
54.TAIWAN HSBC
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
55.THAILAND HSBC
Bangkok Bank Public Company Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
56.TURKEY Garanti Bank
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
57.UAE HSBC Bank Middle East Ltd.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
00.XXXXXX XXXXXXX The Bank of New York
JPMorgan Chase Bank, N.A. (CD's only)
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
59.URUGUAY BankBoston, N.A.
-------- ---------------------------- ----------------------------------------------------------------------------
-------- ---------------------------- ----------------------------------------------------------------------------
60.UNITED STATES The Bank of New York
-------- ---------------------------- ----------------------------------------------------------------------------
