CUSTODIAN AGREEMENT
This CUSTODIAN AGREEMENT dated as of this 9th day of
September, 1997 by and between The Bank of New York, a New York
banking corporation (the "Custodian"), and DECS Trust (such trust
and the trustees thereof acting in their capacity as such being
referred to herein as the "Trust"), a statutory business trust
organized under the Business Trust Act of the State of Delaware
pursuant to a Declaration of Trust dated as of November 21, 1995
(as it may be amended and restated from time to time, the "Trust
Agreement").
WITNESSETH
WHEREAS the Trust is a non-diversified, closed-end
management investment company, as defined in the Investment
Company Act of 1940 (the "Investment Company Act"), formed to
purchase and hold certain U.S. treasury securities (the "Treasury
Securities"), to enter into and hold forward purchase contracts
with one or more existing shareholders of DIMON Incorporated
(individually, a "Contract" and collectively, the "Contracts"),
to hold security for the performance of such shareholders of
their obligations under the Contracts pursuant to related
collateral agreements (the "Collateral Agreements") and to issue
DECS in accordance with the terms and conditions of the Trust
Agreement;
WHEREAS the Trustees desire to engage the services of the
Custodian to perform certain custodial duties for the Trust; and
WHEREAS the Custodian is qualified and willing to assume
such duties on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties agree as
follows:
1. Definitions. Capitalized terms not otherwise defined
herein shall have the respective meanings specified in the Trust
Agreement.
2. Appointment of Custodian; Transfer of Assets. The Trust
hereby constitutes and appoints the Custodian, and the Custodian
accepts such appointment, as custodian of all of the property,
including but not limited to, the Contracts, the Treasury
Securities, the Temporary Investments, any cash and any other
property at any time owned or held by the Trust (other than
Pledged Items (as defined in the Collateral Agreements) held by
the Collateral Agent thereunder) (collectively, the "Assets").
The Trust hereby deposits the Assets owned by the Trust on the
date hereof with the Custodian and the Custodian hereby accepts
such Assets into its custody, and the Trust shall deliver to the
Custodian all additional Assets, including all monies, securities
and other property, received by the Trust at any time during the
period of this Agreement, subject to the following terms and
conditions. The Custodian hereby agrees that it shall hold the
Assets in a segregated custody account, separate and distinct
from all other accounts, in accordance with Section 17(f) of, and
in such manner as shall constitute the segregation and holding in
trust
within the meaning of, the Investment Company Act and the
rules and regulations thereunder. The Trust authorizes the
Custodian, for any Assets held hereunder, to use the services of
any United States securities depository permitted to perform such
services for registered investment companies and their custodians
under Rule 17f-4 under the Investment Company Act and which have
been approved by the Trust, including but not limited to, the
Depository Trust Company and the Federal Reserve Book Entry
System.
3. Asset Disposition; Examinations. The Custodian shall
have no power or authority to assign, hypothecate, pledge or
otherwise dispose of the Assets, except pursuant to a written
direction in accordance with paragraph 4 below and then only for
the account of the Trust. The Assets shall be subject to no lien
or charge of any kind in favor of the Custodian for itself or for
any other Person claiming through the Custodian. The Custodian
shall permit actual examination of the Assets by the Trust's
independent public accountant at the end of each annual and
semi-annual fiscal period of the Trust and at least one other
time during the fiscal year of the Trust chosen by such
independent public accountant and shall permit the inspection of
the Assets by the Commission through its employees or agents
during the normal business hours of the Custodian upon reasonable
request.
4. Authorized Actions. The Custodian shall take such
actions with respect to the Assets as directed in writing by any
Trustee or by any officer of the Administrator as may be received
by the Custodian from time to time.
5. Custodian's Actions Taken In Good Faith. In connection
with the performance of its duties under this Agreement, the
Custodian shall be under no liability to the Trust or any Holder
for any action taken in good faith in reliance on any paper,
order, certification, list, demand, request, consent, affidavit,
notice, opinion, direction, endorsement, assignment, resolution,
draft or other document, prima facie property executed, or for
the disposition of the Assets pursuant to the Trust Agreement or
in respect of any action taken or suffered under the Trust
Agreement in good faith, in accordance with an opinion of counsel
or at the direction of the Trustees pursuant hereto; provided
that this provision shall not protect the Custodian against any
liability to which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless disregard
of its obligations and duties hereunder. Notwithstanding any
other provision of this Agreement, the Custodian shall under no
circumstances be liable for any indirect or consequential
damages.
6. Trust Agreement Validity. The Custodian shall not
be responsible for the validity or sufficiency of the Trust
Agreement or the due execution thereof, or for the form,
character, genuineness, sufficiency, value or validity of any of
the Assets and the Custodian shall in no event assume or incur
any liability, duty or obligation to any Holder or to the
Trustees, other than as expressly provided herein. The Custodian
shall not be responsible for or in respect of the validity of any
signature by or on behalf of the Trustees.
7. Litigation Obligations, Costs and Indemnity. The
Custodian shall not be under any obligation to appear in,
prosecute or defend any action which in its opinion may
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involve it in expense or liability, unless it shall be
furnished with such reasonable security and indemnity against
such expense or liability as it may require, and any pecuniary
costs of the Custodian from such actions shall be expenses which
are reimbursable pursuant to paragraph 13 hereof.
8. Taxes; Trust Expenses. In no event shall the
Custodian be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Assets or
upon the monies, securities or other properties included therein.
The Custodian shall be reimbursed and indemnified by the Trust
for all such taxes and charges, for any tax or charge imposed
against the Trust and for any expenses, including counsel fees,
interest, penalties and additions to tax which the Custodian may
sustain or incur with respect to such taxes or charges.
9. Custodian Resignation, Succession. (a) The Custodian
may resign by executing an instrument in writing resigning as
Custodian and delivering the same to the Trustees, not less than
60 days before the date specified in such instrument when,
subject to clause (b) of this paragraph 9, such resignation is to
take effect. Upon receiving such notice of resignation, the
Trustees shall use their reasonable efforts promptly to appoint a
successor Custodian in the manner and meeting the qualifications
provided in the Trust Agreement, by written instrument or
instruments delivered to the resigning Custodian and the
successor Custodian.
(b) In case no successor Custodian shall have been
appointed within 30 days after notice of resignation has been
received by the Trustees, the resigning Custodian may forthwith
apply to a court of competent jurisdiction for the appointment of
a successor Custodian. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribed, appoint a
successor Custodian.
10. Custodian Removal. The Trust may remove the Custodian
upon 60 days' prior written notice to the Custodian and appoint a
successor Custodian. In case at any time the Custodian shall not
meet the requirements set forth in the Trust Agreement or shall
become incapable of acting or if a court having jurisdiction
shall enter a decree or order for relief in respect of the
Custodian in an involuntary case, or the Custodian shall commence
a voluntary case, under any applicable bankruptcy, insolvency, or
other similar law now or hereafter in effect, or any receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) for the Custodian or for any substantial part
of its property shall be appointed, or the Custodian shall make
any general assignment for the benefit of creditors, or shall
generally fail to pay its debts as they become due, the Trust may
remove the Custodian immediately and appoint a successor
Custodian. The termination of the Administration Agreement or the
Paying Agent Agreement shall cause the removal of the Custodian
simultaneously therewith.
11. Transfers to Successor Custodian. Upon the request
of any successor Custodian, the Custodian hereunder shall, upon
payment of all amounts due it, execute and deliver an instrument
acknowledged by it transferring to such successor Custodian all
the rights and powers of the retiring Custodian; and the retiring
Custodian shall transfer, deliver and pay over to the successor
Custodian the Assets at the time held by it hereunder, if any,
together with
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all necessary instruments of transfer and assignment or
other documents property executed necessary to effect such
transfer and such of the records or copies thereof maintained by
the retiring Custodian in the administration hereof as may be
requested by the successor Custodian, and shall thereupon be
discharged from all duties and responsibilities hereunder. Any
resignation or removal of the Custodian shall become effective
upon such acceptance of appointment by the successor Custodian.
The indemnification of the resigning Custodian provided for
hereunder shall survive any resignation, discharge or removal of
the Custodian hereunder.
12. Custodian Merger, Consolidation. Any corporation
into which the Custodian may be merged or converted or with which
it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Custodian shall
be a party, shall be the successor Custodian hereunder and under
the Trust Agreement without the execution or filing of any paper,
instrument or further act to be done on the part of the parties
hereto or thereto, provided that such corporation meets the
requirements set forth in the Trust Agreement and provided
further that the Trust has given its prior written consent to the
Custodian with respect to any such merger, conversion or
consolidation.
13. Compensation; Expenses. The Custodian shall receive
compensation for performing the usual, ordinary, normal and
recurring services under this Custodian Agreement and, with the
prior written approval of the Trust, reimbursement for any and
all expenses and disbursements incurred hereunder, as provided in
Section 3.1 of the Administration Agreement.
14. Section 17(f) Qualification. The Custodian hereby
represents that it is qualified to act as a custodian under
Section 17(f) of the Investment Company Act.
15. Custodian's Limited Liability. The Trust shall
indemnify and hold the Custodian harmless from and against any
loss, damages, cost or expense (including the costs of
investigation, preparation for and defense of legal and/or
administrative proceedings related to a claim against it and
reasonable attorneys' fees and disbursements), liability or claim
incurred by reason of any inaccuracy in information furnished to
the Custodian by the Trustees, or any act or omission in the
course of, connected with or arising out of any services to be
rendered hereunder, provided that the Custodian shall not be
indemnified and held harmless from and against any such loss,
damages, cost, expense, liability or claim arising from its
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or its reckless disregard of its
duties and obligations hereunder. Neither the Federal Reserve
Book Entry System nor the Depository Trust Company shall be
deemed to be agents of the Custodian.
16. Rights of Set-Off; Banker's Lien. The Custodian
hereby waives all rights of set-off or banker's lien it may have
with respect to the Assets held by it as Custodian hereunder.
17. Termination. This Agreement shall terminate upon the
earlier of the termination of the Trust or the appointment of a
successor Custodian.
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18. Choice of Law. This Agreement is executed and deli-
vered in the State of New York, and all laws or rules of construction
of the State of New York shall govern the right of the parties
hereto and the interpretation of the provisions hereof.
19. Notices. Any notice to be given to the Trust
hereunder shall be in writing and shall be duly given if mailed or
delivered to DECS Trust, c/o Xxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxxx
Inc, Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and to
the Custodian if mailed or delivered to The Bank of New York, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxx Xxxxx,
or at such other address as shall be specified by the addressee
to the other party hereto in writing.
20. No Third Party Beneficiaries. Nothing herein,
express or implied, shall give to any Person, other than the
Trust, the Custodian and their respective successors and assigns,
any benefit of any legal or equitable right, remedy or claim
hereunder.
21. Amendments; Trust Agreement Changes; Waiver. This
Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by a duly authorized
representative of the party to be charged. The Trustees shall
notify the Custodian of any change in the Trust Agreement prior
to the effective date of any such change. Failure of either party
hereto to exercise any right or remedy hereunder in the event of
a breach hereof by the other party shall not constitute a waiver
of any such right or remedy with respect to any subsequent
breach.
22. Counterparts. This Agreement may be signed in
counterparts with all counterparts constituting one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first
above written.
Trustee
___________________________
Xxxxx X. Xxxxxxx
as Trustee
The Bank of New York
By:________________________
Name:
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