Exhibit 99.(g)(ii)
MASTER CUSTODIAN AGREEMENT
This Agreement between those REGISTERED INVESTMENT COMPANIES (each such
investment company and each investment company made subject to this Agreement in
accordance with Section 19 herein, be referred to as a "FUND" and collectively
as the "FUNDS") listed on Appendix A hereto (hereinafter "APPENDIX A" as it may
be amended from time to time), which may be Massachusetts business trusts or
have such other form of organization as may be indicated, and STATE STREET BANK
and TRUST COMPANY, a Massachusetts trust company (the "CUSTODIAN").
WITNESSETH:
WHEREAS, each Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 ACT") and each Fund has appointed the Bank to act as its
Custodian;
WHEREAS, the Fund may or may not be authorized to issue shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, each Fund so authorized intends that this Agreement be applicable to
each of its series set forth on Appendix A (each such series together with all
other series subsequently established by the Fund and made subject to this
Agreement in accordance with Section 20 herein, be referred to as a "PORTFOLIO"
and collectively as the "PORTFOLIOS").
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
Each Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("DOMESTIC SECURITIES") and securities it desires to be held outside the United
States ("FOREIGN securities"). Each Fund, on behalf of its Portfolio(s), agrees
to deliver to the Custodian all securities, cash, or other assets of such
Portfolios, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by it from
time to time, and the cash consideration received by it for such new or treasury
shares of beneficial interest of each Fund representing interests in its
Portfolios ("SHARES") as may be issued or sold from time to time. The Custodian
shall not be responsible for any property of a Portfolio held or received by the
Fund and not delivered to the Custodian. With respect to uncertificated shares
(the "UNDERLYING SHARES") of registered investment companies (hereinafter
sometimes referred to as the "UNDERLYING PORTFOLIOS"), the holding of
confirmation statements that identify the shares as being recorded in the
Custodian's name on behalf of the Fund will be deemed custody for purposes
hereof.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 7
hereof), the Custodian shall on behalf of the applicable Portfolio from time to
time employ one or more sub-custodians located in the United States, but only in
accordance with an applicable vote by the Board of Directors or the Board of
Trustees of the applicable Fund on behalf of the applicable Portfolio (as
appropriate, and in each case, the "BOARD"). The Custodian may employ as
sub-custodian for each Fund's foreign securities on behalf of the applicable
Portfolio, the foreign banking institutions and
foreign securities depositories designated in Schedules A and B hereto, but only
in accordance with the applicable provisions of Sections 3 and 4. The Custodian
shall have no more or less responsibility or liability to the Fund on account of
any actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
HELD BY THE CUSTODIAN IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States, including all domestic securities owned by such
Portfolio other than securities which are maintained pursuant to Section 2.8 in
a clearing agency which acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the Treasury (each, a "U.S.
SECURITIES SYSTEM") and (b) the Underlying Shares owned by the Fund which are
maintained pursuant to Section 2.13 in an account with State Street Bank and
Trust Company or such other entity which may from time to time act as a transfer
agent for the Underlying Portfolios and with respect to which the Custodian is
provided with Proper Instructions (the "UNDERLYING TRANSFER AGENT").
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian or in an account at the
Underlying Transfer Agent only upon receipt of Proper Instructions on behalf of
the applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by a
Portfolio;
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.7
hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of a Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.6 or into the name
or nominee name of any sub-custodian appointed pursuant to
Section 1; or for exchange for a different number of bonds,
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 the Custodian;
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7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, BUT ONLY against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery in connection with any loans of securities made
by the Fund on behalf of one or more Portfolios to a third
party lending agent, or the lending agent's custodian, in
accordance with Proper Instructions (which may not provide for
receipt by the Custodian of collateral therefor) agreed upon
from time to time by the Custodian and the Fund on behalf of
the Portfolio;
12) For delivery as security in connection with any borrowing by a
Fund on behalf of a Portfolio requiring a pledge of assets by
the Fund on behalf of the Portfolio, BUT ONLY against receipt
of amounts borrowed;
13) For delivery in accordance with the provisions of any
agreement among a Fund on behalf of a Portfolio, the Custodian
and a broker-dealer registered under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), 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 by the
Portfolio of the Fund;
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14) For delivery in accordance with the provisions of any
agreement among a Fund on behalf of a Portfolio, the
Custodian, and a futures commission merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission ("CFTC")
and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
15) Upon receipt of instructions from the transfer agent for the
Fund (the "TRANSFER AGENT") for delivery to such Transfer
Agent or to the holders of Shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund related to the Portfolio
(the "PROSPECTUS"), in satisfaction of requests by holders of
Shares for repurchase or redemption;
16) For delivery as initial or variation margin in connection with
futures or options on futures contracts entered into by the
Fund on behalf of a Portfolio;
17) In the case of a sale processed through the Underlying
Transfer Agent of Underlying Shares, in accordance with
Section 2.13 hereof; and
18) For any other purpose, BUT ONLY upon receipt of Proper
Instructions from the Fund on behalf of the applicable
Portfolio specifying the securities of the Portfolio to be
delivered and naming the person or persons to whom delivery of
such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the applicable
Portfolio or of any nominee of the Custodian which nominee shall be assigned
exclusively to a Portfolio, UNLESS a Fund has authorized in writing the
appointment of a nominee to be used in common with other registered investment
companies having the same investment adviser as the Portfolio, or in the name or
nominee name of any agent appointed pursuant to Section 2.7 or in the name or
nominee name of any sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of the Portfolio under the terms
of this Agreement shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in "street name",
the Custodian shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis only
of relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers. Notwithstanding the foregoing, it is the
intention of the parties that the Loans (as defined in Section 5.1 hereof) will
not be registered as provided in this Section 2.3 and that any Financing
Documents (as defined in Section 5.2 hereof) with respect to the Loans received
by the Custodian in its capacity as safekeeping agent shall be serviced in
accordance with the terms of Section 5 hereof.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio of each Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such
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account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by the
Portfolio in a bank account established and used in accordance with Rule 17f-3
under the 1940 Act. Monies held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the banking department of the
Custodian or in such other banks or trust companies as it may in its discretion
deem necessary or desirable; PROVIDED, however, that every such bank or trust
company shall be qualified to act as a custodian under the 1940 Act and that
each such bank or trust company and the monies to be deposited with each such
bank or trust company shall on behalf of each applicable Portfolio be approved
by vote of a majority of the Board. Such monies shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which each
Portfolio shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to bearer domestic securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent thereof
and shall credit such income, as collected, to such Portfolio's custodian
account. Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due each Portfolio on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the responsibility of
the Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data as may
be necessary to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions
on behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.8 hereof; (c) in the case of a purchase of
Underlying Shares, in accordance with the conditions set forth
in Section 2.13; (d) in the case of repurchase agreements
entered into between the Fund on behalf of a Portfolio and the
Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the
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Custodian to repurchase such securities from the Portfolio; or
(e) for transfer to a time deposit account of the Fund in any
bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions
from the Fund as defined herein;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued as set forth
in Section 6 hereof;
4) 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, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares declared pursuant
to the Fund's articles of incorporation or organization and
by-laws or agreement or declaration of trust, as applicable,
and Prospectus (collectively, "GOVERNING DOCUMENTS");
6) For payment of the amount of dividends received with respect
to securities sold short;
7) For payment of initial or variation margin in connection with
futures or options on futures contracts entered into by the
Fund on behalf of a Portfolio;
8) For delivery to one or more co-custodians (each, a "REPO
CUSTODIAN") appointed by the Fund on behalf of a Portfolio and
communicated to the Custodian by Proper Instructions,
including Schedule D (as may be amended from time to time)
attached to this Agreement, duly executed by two authorized
officers of the Fund, for the purpose of engaging in
repurchase agreement transactions, which delivery may be made
without contemporaneous receipt by the Custodian of assets in
exchange therefor, and upon which delivery to such Repo
Custodian in accordance with Proper Instructions from the Fund
on behalf of a Portfolio, the Custodian shall have no further
responsibility or obligation to the Fund as a custodian for
the Fund on behalf of a Portfolio with respect to the assets
so delivered (each such delivery, a "FREE TRADE"), provided
that, in preparing reports of monies received or paid out of
the Portfolio or of assets comprising the Portfolio, the
Custodian shall be entitled to rely upon information received
from time to time from the Repo Custodian and shall not be
responsible for the accuracy or completeness of such
information included in the Custodian's reports until such
assets are received by the Custodian;
9) In connection with an investment by a Fund or a Portfolio
in any Loans (as defined in Section 5 hereof); and
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10) For any other purpose, BUT ONLY upon receipt of Proper
Instructions specifying the amount of such payment and naming
the person or persons to whom such payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 2 as
the Custodian may from time to time direct; PROVIDED, however, that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder. The Underlying Transfer Agent shall not be deemed an
agent or subcustodian of the Custodian for purposes of this Section 2.7 or any
other provision of this Agreement.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System in compliance with the conditions of Rule 17f-4 of the 1940
Act, as amended from time to time.
SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of a Portfolio, the Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the CFTC or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Portfolio,
(ii) for purposes of segregating U.S. cash, U.S. Government securities, or other
U.S. securities in connection with swaps or other transactions by a Portfolio
related to an ISDA Master Agreement; (iii) for purposes of segregating U.S. cash
or U.S. Government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iv) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release No.
10666, or any subsequent release of the U.S. Securities and Exchange Commission
(the "SEC"), or interpretative opinion of the staff of the SEC, relating to the
maintenance of segregated accounts by registered investment companies, and (v)
for any other purpose upon receipt of Proper Instructions from the Fund on
behalf of the applicable Portfolio.
SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian
shall execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other payments
with respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
SECTION 2.11 PROXIES. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
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without indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
SECTION 2.12 COMMUNICATIONS RELATING TO FUND SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
applicable Fund all written information (including, without limitation, pendency
of calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
the Fund on behalf of the Portfolio and the maturity of futures contracts
purchased or sold by the Portfolio) received by the Custodian from issuers of
the securities being held for the Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Portfolio all written
information received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or its agents) making the
tender or exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
SECTION 2.13 DEPOSIT OF FUND ASSETS WITH THE UNDERLYING TRANSFER AGENT.
Underlying Shares shall be deposited and/or maintained in an account or accounts
maintained with the Underlying Transfer Agent. The Underlying Transfer Agent
shall be deemed to be acting as if it is a "securities depository" for purposes
of Rule 17f-4 under the 1940 Act. The Fund hereby directs the Custodian to
deposit and/or maintain such securities with the Underlying Transfer Agent,
subject to the following provisions:
1) The Custodian shall keep Underlying Shares owned by the Fund
with the Underlying Transfer Agent provided that such
securities are maintained in an account or accounts on the
books and records of the Underlying Transfer Agent in the name
of the Custodian as custodian for the Fund.
2) The records of the Custodian with respect to Underlying Shares
which are maintained with the Underlying Transfer Agent shall
identify by book-entry those Underlying Shares belonging to
the Fund;
3) The Custodian shall pay for Underlying Shares purchased for
the account of the Fund upon (i) receipt of advice from the
Fund's investment manager that such Underlying Shares have
been purchased and will be transferred to the account of the
Custodian, on behalf of the Fund, on the books and records of
the Underlying Transfer Agent, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
receive confirmation from the Underlying Transfer Agent of the
purchase of such securities and the transfer of such
securities to the Custodian's account with the Underlying
Transfer Agent only after such payment is made. The Custodian
shall transfer Underlying Shares redeemed for the account of
the Fund (i) upon receipt of an advice from the Fund's
investment manager that such securities have been redeemed and
that payment for such securities will be transferred to the
Custodian and (ii) the making of an entry on the records of
the Custodian to reflect such transfer and payment for the
account of the Fund. The Custodian will receive confirmation
from the Underlying Transfer Agent of the repurchase of such
securities and payment
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therefor only after such securities are redeemed. Copies of
all advices from the Fund's investment manager of purchases
and sales of Underlying Shares for the account of the Fund
shall identify the Fund, be maintained for the Fund by the
Custodian, and be provided to the investment manager at its
request;
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4) The Custodian shall be not be liable to the Fund for any loss
or damage to the Fund resulting from maintenance of Underlying
Shares with Underlying Transfer Agent except for losses
resulting directly from the negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of
its or their employees.
SECTION 3. PROVISIONS RELATING TO RULES 17F-5 AND 17F-7
SECTION 3.1. DEFINITIONS. As used throughout this Agreement, the
following capitalized terms shall have the indicated meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 0000 Xxx) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act; the term does not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.
"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.
SECTION 3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by its Board, hereby delegates to the Custodian,
subject to Section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets of the Portfolios held outside the
United States, and the Custodian hereby accepts such delegation as Foreign
Custody Manager with respect to the Portfolios.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Agreement, which list of
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countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A
the Eligible Foreign Custodians selected by the Foreign Custody Manager to
maintain the assets of the Portfolios, which list of Eligible Foreign Custodians
may be amended from time to time in the sole discretion of the Foreign Custody
Manager. The Foreign Custody Manager will provide amended versions of Schedule A
in accordance with Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the
applicable account opening requirements for such country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board, on behalf of the
Portfolios, responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Agreement by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each country listed on Schedule A in which the
Custodian has previously placed or currently maintains Foreign Assets pursuant
to the terms of the Agreement. Following the receipt of Proper Instructions
directing the Foreign Custody Manager to close the account of a Portfolio with
the Eligible Foreign Custodian selected by the Foreign Custody Manager in a
designated country, the delegation by the Board on behalf of the Portfolios to
the Custodian as Foreign Custody Manager for that country shall be deemed to
have been withdrawn and the Custodian shall immediately cease to be the Foreign
Custody Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period to which the parties agree in writing)
after receipt of any such notice by the Fund, the Custodian shall have no
further responsibility in its capacity as Foreign Custody Manager to the Fund
with respect to the country as to which the Custodian's acceptance of delegation
is withdrawn.
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions
of this Section 3.2, the Foreign Custody Manager may place and maintain the
Foreign Assets in the care of the Eligible Foreign Custodian selected by the
Foreign Custody Manager in each country listed on Schedule A, as amended from
time to time. In performing its delegated responsibilities as Foreign Custody
Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian,
the Foreign Custody Manager shall determine that the Foreign Assets will be
subject to reasonable care, based on the standards applicable to custodians in
the country in which the Foreign Assets will be held by that Eligible Foreign
Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation the factors specified in Rule 17f-5(c)(1).
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody
Manager shall determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
(c) MONITORING. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the Foreign
11
Custody Manager shall establish a system to monitor (i) the appropriateness of
maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) the
contract governing the custody arrangements established by the Foreign Custody
Manager with the Eligible Foreign Custodian. In the event the Foreign Custody
Manager determines that the custody arrangements with an Eligible Foreign
Custodian it has selected are no longer appropriate, the Foreign Custody Manager
shall notify the Board and the investment adviser in accordance with Section
3.2.5 hereunder.
3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For
purposes of this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Portfolios.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager
shall report the withdrawal of the Foreign Assets from an Eligible Foreign
Custodian and the placement of such Foreign Assets with another Eligible Foreign
Custodian by providing to the Board an amended Schedule A at the end of the
calendar quarter in which an amendment to such Schedule has occurred. The
Foreign Custody Manager shall make written reports notifying the Board and the
investment adviser of any other material change in the foreign custody
arrangements of the Fund described in this Section 3.2 after the occurrence of
the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A
PORTFOLIO. In performing the responsibilities delegated to it, the Foreign
Custody Manager agrees to exercise reasonable care, prudence and diligence such
as a person having responsibility for the safekeeping of assets of management
investment companies registered under the 1940 Act would exercise.
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Agreement
to the Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS
FOREIGN CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign
Custody Manager of the Portfolios shall be effective as of the date hereof and
shall remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party. Termination will
become effective thirty (30) days after receipt by the non-terminating party of
such notice. The provisions of Section 3.2.2 hereof shall govern the delegation
to and termination of the Custodian as Foreign Custody Manager of the Portfolios
with respect to designated countries.
SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide
the Fund (or its duly-authorized investment manager or investment adviser) with
an analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or
12
investment adviser) of any material change in such risks, in accordance with
section (a)(1)(i)(B) of Rule 17f-7.
3.3.2 STANDARD OF CARE. The Custodian agrees to exercise
reasonable care, prudence and diligence in performing the duties set forth in
Section 3.3.1.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS
HELD OUTSIDE THE UNITED STATES
SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the
following capitalized terms shall have the indicated meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2. HOLDING SECURITIES. The Custodian shall identify on its
books as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities so
held by the Foreign Sub-Custodian be held separately from any assets of such
Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
SECTION 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as
applicable, in such country.
SECTION 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN SECURITIES. The Custodian or a
Foreign Sub-Custodian shall release and deliver foreign securities of the
Portfolios held by the Custodian or such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) Upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against
expectation of receiving later payment; or (B) in the case of
a sale effected through a Foreign Securities System, in
accordance with the rules governing the operation of the
Foreign Securities System;
13
(ii) In connection with any repurchase agreement related to foreign
securities;
(iii) To the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolios;
(iv) To the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
(v) To the issuer thereof, or its agent, for transfer into the
name of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian or such
Foreign Sub-Custodian) or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units;
(vi) To brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market
custom; provided that in any such case the Foreign
Sub-Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from
the Foreign Sub-Custodian's own negligence or willful
misconduct;
(vii) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
(viii) In the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) For delivery as security in connection with any borrowing by
the Portfolios requiring a pledge of assets by the Portfolios;
(x) For payment of initial or variation margin in connection with
futures or options on futures contracts entered into by the
Fund on behalf of a Portfolio;
(xi) In connection with the lending of foreign securities;
(xii) For the purchase or sale of foreign exchange or foreign
exchange contracts for a Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians; and
(xii) for any other purpose, but only upon receipt of Proper
Instructions specifying the foreign securities to be delivered
and naming the person or persons to whom delivery of such
securities shall be made.
14
4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall pay out, or
direct the respective Foreign Sub-Custodian or the respective
Foreign Securities System to pay out, monies of the applicable
Portfolio in the following cases only:
(i) Upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, by (A)
delivering money to the seller thereof or to a dealer therefor
(or an agent for such seller or dealer) against expectation of
receiving later delivery of such foreign securities; or (B) in
the case of a purchase effected through a Foreign Securities
System, in accordance with the rules governing the operation
of such Foreign Securities System;
(ii) In connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) For the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Agreement, legal fees, accounting fees, and other
operating expenses;
(iv) For the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(v) For delivery to one or more Repo Custodians appointed by the
Fund on behalf of a Portfolio and communicated to the
Custodian by Proper Instructions, including Schedule D (as may
be amended from time to time) attached to this Agreement, duly
executed by two authorized officers of the Fund, for the
purpose of engaging in repurchase agreement transactions,
which delivery may be made without contemporaneous receipt by
the Custodian of assets in exchange therefor, and upon which
delivery to such Repo Custodian in accordance with Proper
Instructions from the Fund on behalf of a Portfolio, the
Custodian shall have no further responsibility or obligation
to the Fund as a custodian for the Fund on behalf of a
Portfolio with respect to the assets so delivered in a Free
Trade, provided that, in preparing reports of monies received
or paid out of the Portfolio or of assets comprising the
Portfolio, the Custodian shall be entitled to rely upon
information received from time to time from the Repo Custodian
and shall not be responsible for the accuracy or completeness
of such information included in the Custodian's reports until
such assets are received by the Custodian;
(vi) For payment of initial or variation margin in connection with
futures or options on futures contracts entered into by the
Fund on behalf of a Portfolio;
(vii) For payment of part or all of the dividends received with
respect to securities sold short;
15
(viii) In connection with the borrowing or lending of foreign
securities;
(ix) In connection with investments by a Fund or a Portfolio in any
Loans (as defined in Section 5 hereof); and
(x) For any other purpose, but only upon receipt of Proper
Instructions specifying the amount of such payment and naming
the person or persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision of
this Agreement to the contrary, settlement and payment for Foreign Assets
received for the account of the Portfolio and delivery of Foreign Assets
maintained for the account of the Portfolio may be effected in accordance with
the customary established securities trading or processing practices and
procedures in the country or market in which the transaction occurs, including,
without limitation, delivering Foreign Assets to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) with the expectation
of receiving later payment for such Foreign Assets from such purchaser or
dealer.
The Custodian shall provide to the Board and the investment adviser the
information with respect to custody and settlement practices in countries in
which the Custodian employs a Foreign Sub-Custodian described on Schedule C
hereto at the time or times set forth on such Schedule. The Custodian may revise
Schedule C from time to time, provided that no such revision shall result in the
Board being provided with substantively less information than had been
previously provided hereunder.
SECTION 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of the Custodian or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and the Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. The Custodian or a Foreign Sub-Custodian
shall not be obligated to accept securities on behalf of a Portfolio under the
terms of this Agreement unless the form of such securities and the manner in
which they are delivered are in accordance with reasonable market practice.
SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as
belonging to the Portfolio cash (including cash denominated in foreign
currencies) deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of, cash on the
books of the Custodian, a bank account or bank accounts shall be opened and
maintained outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian. All accounts referred to in this Section shall be subject only to
draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian)
acting pursuant to the terms of this Agreement to hold cash received by or from
or for the account of the Portfolio. Cash maintained on the books of the
Custodian (including its branches, subsidiaries and affiliates), regardless of
currency denomination, is maintained in bank accounts established under, and
subject to the laws of, The Commonwealth of Massachusetts.
16
SECTION 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolio shall be entitled and shall
credit such income, as collected, to the applicable Portfolio. In the event that
extraordinary measures are required to collect such income, the Fund and the
Custodian shall consult as to such measures and as to the compensation and
expenses of the Custodian relating to such measures.
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities
held pursuant to this Section 4, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. The Fund acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
lack of notice and other factors may have the effect of severely limiting the
ability of the Fund to exercise shareholder rights.
SECTION 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The
Custodian shall transmit promptly to the Fund written information with respect
to materials received by the Custodian via the Foreign Sub-Custodians from
issuers of the foreign securities being held for the account of the Portfolios
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith). With respect to
tender or exchange offers, the Custodian shall transmit promptly to the Fund
written information with respect to materials so received by the Custodian from
issuers of the foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer. The Custodian shall
not be liable for any untimely exercise of any tender, exchange or other right
or power in connection with foreign securities or other property of the
Portfolios at any time held by it unless (i) the Custodian or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) the Custodian receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at least three
business days prior to the date on which the Custodian is to take action to
exercise such right or power.
SECTION 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement
pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the
extent possible, require the Foreign Sub-Custodian to exercise reasonable care
in the performance of its duties, and to indemnify, and hold harmless, the
Custodian from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Sub-Custodian's performance of
such obligations. At the Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that a Fund or Portfolio has not been
made whole for any such loss, damage, cost, expense, liability or claim.
SECTION 4.11 TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on a Fund, the Portfolios
or the Custodian as custodian of the Portfolios by the tax law of the United
States or of any state or political subdivision thereof. It shall be the
responsibility of the applicable Fund to notify the Custodian of the obligations
imposed on the Fund with respect to the Portfolios or the Custodian as custodian
of the Portfolios by the tax law of countries other than those mentioned in the
above sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting. The sole responsibility of the Custodian with regard to such tax law
shall be to use
17
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.
SECTION 4.12. LIABILITY OF CUSTODIAN. The Custodian shall be liable for
the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally in the Agreement and, regardless of
whether assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, the Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism, or any other
loss where the Foreign Sub-Custodian has otherwise acted with reasonable care.
SECTION 5. LOAN SERVICING PROVISIONS
SECTION 5.1 GENERAL. The following provisions shall apply with respect
to investments, property or assets in the nature of loans, or interests or
participations in loans, including without limitation interests in syndicated
bank loans and bank loan participations, whether in the U.S. or outside the U.S.
(collectively, "LOANS") entered into by the Fund on behalf of one or more of its
Portfolios (referred to in this Section 5 as the "Fund").
SECTION 5.2 SAFEKEEPING. Instruments, certificates, agreements and/or
other documents which the Custodian may receive with respect to Loans, if any
(collectively "FINANCING DOCUMENTS"), from time to time, shall be held by the
Custodian at its offices in Boston, Massachusetts.
SECTION 5.3 DUTIES OF THE CUSTODIAN. The Custodian shall accept such
Financing Documents, if any, with respect to Loans as may be delivered to it
from time to time by the Fund. The Custodian shall be under no obligation to
examine the contents or determine the sufficiency of any such Financing
Documents or to provide any certification with respect thereto, whether received
by the Custodian as original documents, photocopies, by facsimile or otherwise.
Without limiting the foregoing, the Custodian is under no duty to examine any
such Financing Documents to determine whether necessary steps have been taken or
requirements met with respect to the assignment or transfer of the related Loan
or applicable interest or participation in such Loan. The Custodian shall be
entitled to assume the genuineness, sufficiency and completeness of any
Financing Documents received, and the genuineness and due authority of any
signature appearing on such documents. Notwithstanding any term of this
Agreement to the contrary, with respect to any Loans, (i) the Custodian shall be
under no obligation to determine, and shall have no liability for, the
sufficiency of, or to require delivery of, any instrument, document or agreement
constituting, evidencing or representing such Loan, other than to receive such
Financing Documents, if any, as may be delivered or caused to be delivered to it
by the Fund (or its investment manager acting on its behalf), (ii) without
limiting the generality of the foregoing, delivery of any such Loan (including
without limitation, for purposes of Section 2.6 above) may be made to the
Custodian by, and may be represented solely by, delivery to the Custodian of a
facsimile or photocopy of an assignment agreement (an "ASSIGNMENT AGREEMENT") or
a confirmation or certification from the Fund (or the investment manager) to the
effect that it has acquired such Loan and/or has received or will receive, and
will deliver to the Custodian, appropriate Financing Documents constituting,
evidencing or representing such Loan (such confirmation or certification,
together with any Assignment Agreement, collectively, an "ASSIGNMENT AGREEMENT
OR CONFIRMATION"), in any case without delivery of any promissory note,
participation certificate or similar instrument (collectively, an "INSTRUMENT"),
(iii) if an original Instrument shall be or shall become available with respect
to any such
18
Loan, it shall be the sole responsibility of the Fund (or the investment manager
acting on its behalf) to make or cause delivery thereof to the Custodian, and
the Custodian shall be under no obligation at any time or times to determine
whether any such original Instrument has been issued or made available with
respect to such Loan, and shall not be under any obligation to compel compliance
by the Fund to make or cause delivery of such Instrument to the Custodian, and
(iv) any reference to Financing Documents appearing in this Section 5 shall be
deemed to include, without limitation, any such Instrument and/or Assignment
Agreement or Confirmation.
If payments with respect to a Loan ("LOAN PAYMENT") are not received by the
Custodian on the date on which they are due, as reflected in the Payment
Schedule (as such term is defined in Section 5.4 below) of the Loan ("PAYMENT
Date"), or in the case of interest payments, not received either on a scheduled
interest payable date, as reported to the Custodian by the Fund (or the
investment manager acting on its behalf) for the Loan (the "INTEREST PAYABLE
DATE"), or in the amount of their accrued interest payable, the Custodian shall
promptly, but in no event later than one business day after the Payment Date or
the Interest Payable Date, give telephonic notice to the party obligated under
the Financing Documents to make such Loan Payment (the "OBLIGOR") of its failure
to make timely payment, and (2) if such payment is not received within three
business days of its due date, shall notify the Fund (or the investment manager
on its behalf) of such Obligor's failure to make the Loan Payment. The Custodian
shall have no responsibility with respect to the collection of Loan Payments
which are past due, other than the duty to notify the Obligor and the Fund (or
the investment manager acting on its behalf) as provided herein.
The Custodian shall have no responsibilities or duties whatsoever under this
Agreement, with respect to Loans or the Financing Documents, except for such
responsibilities as are expressly set forth herein. Without limiting the
generality of the foregoing, the Custodian shall have no obligation to preserve
any rights against prior parties or to exercise any right or perform any
obligation in connection with the Loans or any Financing Documents (including,
without limitation, no obligation to take any action in respect of or upon
receipt of any consent solicitation, notice of default or similar notice
received from any bank agent or Obligor, except that the Custodian shall
undertake reasonable efforts to forward any such notice to the Fund or the
investment manager acting on its behalf). In case any question arises as to its
duties hereunder, the Custodian may request instructions from the Fund and shall
be entitled at all times to refrain from taking any action unless it has
received Proper Instructions from the Fund or the investment manager and the
Custodian shall in all events have no liability, risk or cost for any action
taken, with respect to a Loan, pursuant to and in compliance with the Proper
Instructions of such parties.
The Custodian shall be only responsible and accountable for Loan Payments
actually received by it and identified as for the account of the Fund; any and
all credits and payments credited to the Fund, with respect to Loans, shall be
conditional upon clearance and actual receipt by the Custodian of final payment
thereon.
The Custodian shall promptly, upon the Fund's request, release to the Fund's
investment manager or to any party as the Fund or the Fund's investment manager
may specify, any Financing Documents being held on behalf of the Fund. Without
limiting the foregoing, the Custodian shall not be deemed to have or be charged
with knowledge of the sale of any Loan, unless and except to the extent it shall
have received written notice and instruction from the Fund (or the investment
manager acting on its behalf) with respect thereto, and except to the extent it
shall have received the sale proceeds thereof.
19
In no event shall the Custodian be under any obligation or liability to make any
advance of its own funds with respect to any Loan.
SECTION 5.4 RESPONSIBILITY OF THE FUND. With respect to each Loan held
by the Custodian hereunder in accordance with the provisions hereof, the Fund
shall (a) cause the Financing Documents evidencing such Loan to be delivered to
the Custodian; (b) include with such Financing Documents an amortization
schedule of payments (the "PAYMENT SCHEDULE") identifying the amount and due
dates of scheduled principal payments, the Interest Payable Date(s) and related
payment amount information, and such other information with respect to the
related Loan and Financing Documents as the Custodian reasonably may require in
order to perform its services hereunder (collectively, "LOAN INFORMATION"), in
such form and format as the Custodian reasonably may require; (c) take, or cause
the investment manager to take, all actions necessary to acquire good title to
such Loan (or the participation in such Loan, as the case may be), as and to the
extent intended to be acquired; and (d) cause the Custodian to be named as its
nominee for payment purposes under the Financing Documents or otherwise provide
for the direct payment of the Payments to the Custodian. The Custodian shall be
entitled to rely upon the Loan Information provided to it by the Fund (or the
investment manager acting on its behalf) without any obligation on the part of
the Custodian independently to verify, investigate, recalculate, update or
otherwise confirm the accuracy or completeness thereof; and the Custodian shall
have no liability for any delay or failure on the part of the Fund in providing
necessary Loan Information to the Custodian, or for any inaccuracy therein or
incompleteness thereof. With respect to each such Loan, the Custodian shall be
entitled to rely on any information and notices it may receive from time to time
from the related bank agent, Obligor or similar party with respect to the
related Loan, and shall be entitled to update its records on the basis of such
information or notices received, without any obligation on its part
independently to verify, investigate or recalculate such information.
SECTION 5.5 INSTRUCTIONS; AUTHORITY TO ACT. The certificate of the
Secretary or an Assistant Secretary of a Fund, identifying certain individuals
approved by the Fund's Board to be officers of the Fund or employees of the
Fund's investment manager and authorized to sign any such instructions, may be
received and accepted as conclusive evidence of the incumbency and authority of
such to act and may be considered by the Custodian to be in full force and
effect until it receives written notice to the contrary from the Secretary or
Assistant Secretary of the Fund. Notwithstanding any other provision of this
Agreement, the Custodian shall have no responsibility to ensure that any
investment by the Fund with respect to Loans has been authorized.
SECTION 5.6 ATTACHMENT. In case any portion of the Loans or the
Financing Documents shall be attached or levied upon pursuant to an order of
court, or the delivery or disbursement thereof shall be stayed or enjoined by an
order of court, or any other order, judgment or decrees shall be made or entered
by any court affecting the property of the Fund or any act of the Custodian
relating thereto, the Custodian is hereby expressly authorized in its sole
discretion to obey and comply with all orders, judgments or decrees so entered
or issued, without the necessity of inquire whether such court had jurisdiction,
and, in case the Custodian obeys or complied with any such order, judgment or
decree, it shall not be liable to anyone by reason of such compliance.
SECTION 6. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit into the account of the appropriate Portfolio such
payments as are received for Shares thereof
20
issued or sold from time to time by the applicable Fund. The Custodian will
provide timely notification to such Fund on behalf of each such Portfolio and
the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
SECTION 7. PROPER INSTRUCTIONS
Proper Instructions, which may also be standing instructions, as used throughout
this Agreement, shall mean instructions received by the Custodian from the Fund,
the Fund's investment manager, or a person or entity duly authorized by either
of them. Such instructions may be in writing signed by the authorized person or
persons or may be in a tested communication or in a communication utilizing
access codes effected between electro-mechanical or electronic devices or may be
by such other means and utilizing such intermediary systems and utilities as may
be agreed to from time to time by the Custodian and the person or entity giving
such instructions, provided that the Fund has followed any security procedures
agreed to from time to time by the Fund and the Custodian, including, but not
limited to, the security procedures selected by the Fund in the Funds Transfer
Addendum to this Agreement. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
For purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any multi-party agreement which requires a
segregated asset account in accordance with Section 2.9 of this Agreement. The
Fund or the Fund's investment manager shall cause its duly authorized officer to
certify to the Custodian in writing the names, titles, and specimen signatures
of persons authorized to give Proper Instructions. The Custodian shall be
entitled to rely upon the identity and authority of such persons until it
receives notice from the Fund to the contrary.
SECTION 8. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
applicable Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
21
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board.
SECTION 9. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the applicable
Fund. The Custodian may receive and accept a copy of a resolution of the Board,
certified by the Secretary or an Assistant Secretary of the Fund ("CERTIFIED
RESOLUTION"), as conclusive evidence (a) of the authority of any person to act
in accordance with such resolution or (b) of any determination or of any action
by the Board as described in such resolution, and such resolution may be
considered as in full force and effect until receipt by the Custodian of written
notice to the contrary.
SECTION 10. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of each
Portfolio and/or compute the net asset value per Share of the outstanding Shares
or, if directed in writing to do so by the Fund on behalf of the Portfolio,
shall itself keep such books of account and/or compute such net asset value per
Share. If so directed, the Custodian shall also calculate daily the net income
of the Portfolio as described in the Prospectus and shall, if applicable,
provide a distribution rate for one or more Portfolios to the Transfer Agent.
For purposes of calculating the net asset value of a Fund or Portfolio, the
Custodian shall value the portfolio securities of each Fund or Portfolio,
utilizing prices obtained from sources designated by the Fund or Portfolio on a
price source authorization, as amended from time to time in writing, or as
otherwise designated by means of Proper Instructions (the "PRICE SOURCE
AUTHORIZATION").
The Fund acknowledges and agrees that, with respect to investments maintained
with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole
source of information on the number of shares of a fund held by it on behalf of
the Fund and that the Custodian has the right to rely on holdings information
furnished by the Underlying Transfer Agent to the Custodian in performing its
duties under this Agreement, including, without limitation, the duties set forth
in this Section 10 and in Section 11 hereof; provided, however, that the
Custodian shall be obligated to reconcile information as to purchases and sales
of Underlying Shares contained in trade instructions and confirmations received
by the Custodian and to report promptly any discrepancies to the Underlying
Transfer Agent. The calculations of the net asset value per Share and the daily
income of each Portfolio shall be made in accordance with the Price Source
Authorization or Proper Instructions transmitted to Custodian by an authorized
person or entity of the Fund.
22
SECTION 11. RECORDS
The Custodian shall create and maintain all records relating to its activities
and obligations under this Agreement in such manner as will meet the obligations
of the Fund under the 1940 Act, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of securities owned by
each Portfolio and held by the Custodian and shall, when requested to do so by
the Fund and for such compensation as shall be agreed upon between the Fund and
the Custodian, include certificate numbers in such tabulations.
SECTION 12. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the applicable Fund, on
behalf of each applicable Portfolio, may from time to time request, to obtain
from year to year favorable opinions from the Fund's independent accountants
with respect to its activities hereunder in connection with the preparation of
the Fund's Form X-0X, Xxxx X0, and Form N-SAR or other annual reports to the SEC
and with respect to any other requirements thereof.
SECTION 13. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the applicable Fund, on behalf of each of the
Portfolios, at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities System or a Foreign Securities System, relating to the
services provided by the Custodian under this Agreement; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
SECTION 14. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between each Fund on
behalf of each applicable Portfolio and the Custodian.
SECTION 15. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to
23
be signed by the proper party or parties, including any futures commission
merchant acting pursuant to the terms of a three-party futures or options
agreement. The Custodian shall be held to the exercise of reasonable care in
carrying out the provisions of this Agreement, but shall be kept indemnified by
and shall be without liability to any Fund for any action taken or omitted by it
in good faith without negligence, including, without limitation, acting in
accordance with any Proper Instruction. The Custodian shall be entitled to rely
on and act upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant to
the advice of (i) counsel for the applicable Fund or Funds, or (ii) such other
counsel as the Custodian may choose; provided, however, with respect to the
performance of any action or omission of any action upon such advice, the
Custodian shall be required to conform to the standard of care set forth in this
Section. The Custodian shall be without liability to any Fund or Portfolio for
any loss, liability, claim or expense resulting from or caused by anything which
is part of Country Risk (as defined in Section 3 hereof), including without
limitation nationalization, expropriation, currency restrictions, or acts of
war, revolution, riots or terrorism.
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, the Custodian
shall be without liability to any Fund for any loss, liability, claim or expense
resulting from or caused by; (i) events or circumstances beyond the reasonable
control of the Custodian or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by the Fund or
its duly-authorized investment manager or investment adviser in their
instructions to the Custodian provided such instructions have been in accordance
with this Agreement; (iii) the insolvency of or acts or omissions by a
securities system, including both U.S. Securities Systems and Foreign Securities
Systems (collectively "SECURITIES SYSTEM"); (iv) any delay or failure of any
broker, agent or intermediary, central bank or other commercially prevalent
payment or clearing system to deliver to the Custodian's sub-custodian or agent
securities purchased or in the remittance or payment made in connection with
securities sold; (v) any delay or failure of any company, corporation, or other
body in charge of registering or transferring securities in the name of the
Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.
If a Fund on behalf of a Portfolio requires the Custodian to take any action
with respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to the Fund or the Portfolio being liable for the payment of
money or incurring liability of some other form, such Fund on behalf of the
Portfolio, as
24
a prerequisite to requiring the Custodian to take such action, shall provide
indemnity to the Custodian in an amount and form satisfactory to it.
In no event shall the Custodian be liable for indirect, special or consequential
damages.
SECTION 16. SECURITY INTEREST
The provisions of this Section 16 shall constitute a security
agreement. Terms used in this Section 16 which are defined in the Uniform
Commercial Code of The Commonwealth of Massachusetts shall have the same
meanings in this Section 16 as in the Uniform Commercial Code of The
Commonwealth of Massachusetts (the "UCC"). If a term is defined in Article 9 of
the UCC and in another Article as well, the Article 9 definition shall control.
SECTION 16.1 COLLATERAL. To secure the due and punctual payment of all
liabilities, whether actual or contingent ("LIABILITIES"), of the Fund
to the Custodian now or hereafter arising or incurred under or in
connection with this Agreement, the Fund hereby grants to the Custodian
a security interest in the following, whether now existing or hereafter
acquired or created (collectively, the "COLLATERAL"):
1) all of the Fund's cash, deposit accounts, securities and other
investment property, promissory notes and other instruments,
chattel paper and other assets in the possession or under the
control of any of the Custodian and its agents, affiliates and
subcustodians;
2) all of the Fund's promissory notes and chattel paper (a) copies
of which are in the possession or under the control of any of
the Custodian and its agents, affiliates and subcustodians, (b)
assigned to the Fund and for which originals or copies of
confirmations or other evidences of the assignment are in the
possession or under the control of any of the Custodian and its
agents, affiliates and subcustodians or (c) assigned to the
Fund and for which instructions have been given to make
payments of principal, interest or other amounts thereon to any
of the Custodian and its agents, affiliates and subcustodians;
and
3) all of the Fund's payment intangibles (a) evidenced by or
created under written or electronic agreements originals or
copies of which are in the possession or under the control of
any of the Custodian and its agents, affiliates and
subcustodians, (b) assigned to the Fund and for which originals
or copies of confirmations or other evidences of the assignment
are in the possession or under the control of any of the
Custodian and its agents, affiliates and subcustodians or (c)
assigned to the Fund and for which instructions have been given
to make payments of principal, interest or other amounts
thereon to any of the Custodian and its agents, affiliates and
subcustodians; and
4) any and all proceeds of any thereof.
The Liabilities include, without limitation, (a) the obligations of the
Fund to the Custodian in relation to any advance of cash or securities
for any purpose including in connection with any pre-determined income
or assumed settlements; (b) the obligations of the Fund to the
Custodian (in its capacity as foreign exchange provider or otherwise)
in relation to any spot or forward
25
foreign exchange contracts or any other foreign exchange contract or
facility entered into with the Fund; and (c) the obligations of the
Fund to reimburse the Custodian for any taxes, interest, charges,
expense, assessments, or other liabilities that may be assessed against
or imposed on the Custodian under or in connection with this Agreement
for the Fund.
SECTION 16.2 FAILURE TO SATISFY LIABILITIES. In the event that the Fund fails
to satisfy any of the Liabilities as and when due and payable, the
failure shall constitute a default under this Section 16, and the
Custodian shall then have with respect to the Collateral, in addition
to all other rights and remedies arising hereunder or under applicable
law, the rights and remedies of a secured party under the Uniform
Commercial Code of The Commonwealth of Massachusetts. Without prejudice
to the Custodian's rights under applicable law, the Custodian shall be
entitled, without notice to the Fund, to withhold delivery of any
Collateral, sell or otherwise realize any Collateral and to apply the
money or other proceeds and any other monies credited to the cash
accounts in satisfaction of such Liabilities. The Fund acknowledges
that, in the Custodian exercising any such rights or remedies against
any Collateral, it will be commercially reasonable for the Custodian
(i) to accelerate or cause the acceleration of the maturity of any
fixed term deposits comprised in the Collateral and (ii) to effect such
currency conversions as may be necessary at its current rates for the
sale and purchase of the relevant currencies.
SECTION 16.3 UCC FILINGS. With respect to Loans (as defined in Section 5 of
this Agreement), each Fund hereby irrevocably authorizes the Custodian
at any time and from time to time to file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements
and amendments thereto that (a) indicate the Collateral as described in
Section 16.1 or as being of an equal or lesser scope or with greater
detail, and (b) provide any other information required by Article 9 of
any applicable Uniform Commercial Code jurisdiction for the sufficiency
or filing office acceptance of any financing statement or amendment,
including whether the Fund is an organization, the type of organization
and any organizational identification number issued to the Fund. The
applicable Fund agrees to furnish any such information to the Custodian
promptly upon the Custodian's request. The Fund also ratifies its
authorization for the Custodian to have filed in any Uniform Commercial
Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.
SECTION 16.4 LOCATION FOR FILING PURPOSES. Each Fund represents and warrants to
the Custodian, that (a) its location and type of organization, as
listed on Appendix A to this Agreement, is a registered organization in
a particular named state or commonwealth; or (b) its location and type
of organization is at its place of business, and if more than one place
of business, its chief executive office and such location and type of
organization is listed on Appendix A of this Agreement; and (c) that
such Fund maintains a public record showing it to have been organized.
Each Fund covenants to provide to the Custodian at least 30 days' prior
written notice of any change in location of its place of organization
or its place of business or its chief executive office. Each Fund's
organization numbers are listed on Appendix A to this Agreement
SECTION 16.5 PERFECTED SECURITY INTEREST. The Company agrees to take such
actions as the Custodian may from time to time request in order to
insure that the Custodian has a first perfected security interest in
the Collateral and that the Custodian has the ability to enforce its
26
security interest. Without limitation upon the foregoing, for such
purposes the Company (a) shall promptly deliver to the possession or
control of the Custodian or its designee originals of any instruments
(including promissory notes) and chattel paper comprised in the
Collateral and not already in the possession or under the control of
the Custodian and its agents, affiliates and subcustodians, (b) shall
promptly obtain termination amendments of Uniform Commercial Code
financing statements or terminations or subordinations of security
interests or other liens, in form and substance satisfactory to
Custodian, where the failure to take such action could result in a
competing security in or other lien on any of the Collateral having
priority over the security interest of the Custodian in the Collateral,
and (c) further authorizes the Custodian to take such action as in the
opinion of the Custodian may be necessary or advisable under any
foreign law.
27
SECTION 17. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective for any particular Fund on the date
indicated on Appendix A, shall continue in full force and effect until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty (60) days after the date
of such delivery or mailing; provided, however, that no Fund shall not amend or
terminate this Agreement in contravention of any applicable federal or state
regulations, or any provision of such Fund's Governing Documents, as applicable,
and further provided, that each Fund may at any time by action of its Board (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Agreement
in the event of the appointment of a conservator or receiver for the Custodian
by the Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Termination of this Agreement with respect to any one particular Fund or
Portfolio shall in no way affect the rights and duties under this Agreement with
respect to any other Fund or Portfolio.
Upon termination of the Agreement with respect to any particular Portfolio, the
Fund on behalf of each applicable Portfolio shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
SECTION 18. SUCCESSOR CUSTODIAN
If a successor custodian for one or more Funds or Portfolios shall be appointed
by the applicable Board, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities of each applicable Portfolio then held by it
hereunder and shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System or at the
Underlying Transfer Agent.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a Certified Resolution, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian hereunder and all
instruments held by the Custodian relative thereto and all other property held
by it under this Agreement on behalf of each applicable Portfolio, and to
transfer to an account of such successor custodian all of the securities of each
such Portfolio held in any Securities System or at the Underlying Transfer
Agent. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement.
28
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof with respect to
any Portfolio owing to the failure of the applicable Fund to procure the
Certified Resolution to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.
SECTION 19. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and each Fund
on behalf of the Portfolios may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. Any
such interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, PROVIDED that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Fund's Governing Documents. No interpretive
or additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Agreement.
SECTION 20. ADDITIONAL FUNDS; PARTIES TO THE AGREEMENT
SECTION 20.1 In the event that any investment company in addition to
those listed on Appendix A attached hereto desires to have the Custodian render
services as custodian under the terms hereof, and if the Custodian wishes to
provide such services, it shall so notify the Custodian in writing and attach a
revised Appendix A. Upon execution thereof, such entity shall become a Fund
hereunder and be bound by all terms, conditions and provisions hereof.
SECTION 20.2 Each Fund listed in Appendix A is a separate party under
this Agreement. The use of a single document to memorialize the separate
Agreement of each of the Funds is understood to be for clerical convenience only
and shall not constitute any basis for joining the Fund (or a particular
Portfolio) in any respect.
SECTION 20.3 Each Fund represents and warrants and the Custodian
acknowledges that (a) the Fund is either a registered investment company or a
Portfolio of such a Fund, and (b) the assets and liabilities of each Fund or
Portfolio listed on Appendix A to this Agreement shall be separate and distinct
from the assets and liabilities of any other Fund or Portfolio hereunder and any
claims against a particular Fund or Portfolio may be satisfied only from the
assets specifically allocated to that Fund or Portfolio.
SECTION 20.4. This Agreement is executed by the officers of each Fund
in their capacity as such and not individually. Any responsibility or liability
of a Fund (or a particular Portfolio) under any provision of this Agreement
shall be satisfied solely from the assets of that Fund (or of a particular
Portfolio), tangible or intangible, realized or unrealized, and in no event
shall the Transfer Agent or any other person have any recourse against the
shareholders, officers or to the extent applicable, directors/trustees of the
Fund under this Agreement or against any one Fund or Portfolio for the
obligations of any Fund or Portfolio.
29
SECTION 21. ADDITIONAL PORTFOLIOS
In the event that any Fund establishes one or more series of Shares in addition
to those listed on the Appendix A attached to this Agreement, with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof and if the Custodian wishes to provide such services, then it shall
so notify the Custodian in writing and attach a revised Appendix A. Upon
execution thereof, such series of Shares shall become a Portfolio hereunder.
SECTION 22. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.
SECTION 23. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between each Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of each Portfolio's assets.
SECTION 24. NOTICES.
Any notice, instruction or other instrument required to be given hereunder may
be delivered in person to the offices of the parties as set forth herein during
normal business hours or delivered prepaid registered mail or by telex, cable or
telecopy to the parties at the following addresses or such other addresses as
may be notified by any party from time to time.
To any Fund: AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, Senior Vice
President and General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
To the Custodian: STATE STREET BANK AND TRUST COMPANY
Xxx Xxxxxxx Xxxxxx - XX/0
Xxxxxx, XX 00000
Attention:Xxxxxx Xxxxxxxx.
Telephone: 000-000-0000
Facsimile: 000- 000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after
30
the receipt thereof. Evidence that the notice was properly addressed, stamped
and put into the post shall be conclusive evidence of posting.
SECTION 25. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, addenda, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 26. REMOTE ACCESS SERVICES ADDENDUM
The Custodian and each Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.
SECTION 27. LIABILITY OF MASSACHUSETTS BUSINESS TRUSTS
With respect to each Fund that is organized as a Massachusetts business trust,
the declaration of trust establishing such trust, a copy of which is on file in
the office of the Secretary of The Commonwealth of Massachusetts, provides that
the name of such trust refers to the trustees collectively as trustees, not as
individuals or personally; and that no trustee, shareholder, officer, employee
or agent of such trust shall be held to any personal liability, nor shall resort
be had to their private property for the satisfaction of any obligation or claim
or otherwise in connection with the affairs of such trust or any portfolio; but
that the trust estate shall be liable. Notice is hereby given that nothing
contained herein shall be construed to be binding upon any of the trustees,
officers, or shareholders of such trust individually.
SECTION 28. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account of customers
to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address, and
share positions.
31
NO [X] The Custodian is not authorized to release the Fund's name, address, and
share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed effective as of January 18, 2006.
EACH REGISTERED INVESTMENT FUND SIGNATURE ATTESTED TO BY:
COMPANY LISTED ON APPENDIX A
ON BEHALF OF ITSELF OR ITS PORTFOLIOS
By: By:
------------------------------- ----------------------------
Name: Name:
------------------------------- ----------------------------
Title: Title:
------------------------------- ---------------------------
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: By:
------------------------------ ----------------------------
Name: XXXXXX X. XXXXXX Name: XXXX X. XXXX
------------------------------ ----------------------------
Title: EXECUTIVE VICE PRESIDENT Title: VICE PRESIDENT & COUNSEL
------------------------------ ----------------------------
33
