CUSTODY AGREEMENT
AGREEMENT, dated as of September 10, 2001 between each Xxxx Xxxxxxx Fund
listed on Schedule II, each either a business trust organized and existing under
the laws of The Commonwealth of Massachusetts, or a Maryland corporation
organized and existing under the laws of the state of Maryland, having its
principal office and place of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (each the "Fund", collectively the "Funds") and The Bank of
New York, a New York corporation authorized to do a banking business having its
principal office and place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the meanings
set forth below:
1. "AUTHORIZED PERSON" shall be any person, whether or not an officer or
employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction or other Instruction on behalf of
the Fund and listed in the Certificate annexed hereto as Schedule I hereto or
such other Certificate as may be received by Custodian from time to time.
2. "BNY AFFILIATE" shall mean any office, branch or subsidiary of The Bank
of New York Company, Inc.
3. "BOOK-ENTRY SYSTEM" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering securities, its successors and nominees.
4. "BUSINESS DAY" shall mean any day on which the Fund, Custodian and
relevant Depositories are open for business.
5. "CERTIFICATE" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to Custodian,
which is actually received by Custodian and signed on behalf of the Fund by an
Authorized Person or a person reasonably believed by Custodian to be an
Authorized Person.
6. "COMPOSITE CURRENCY UNIT" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "DEPOSITORY" shall include (a) the Book-Entry System, (b) the Depository
Trust Company, (c) any other clearing agency or securities depository registered
with the Securities and Exchange Commission identified to the Fund from time to
time, and (d) the respective successors and nominees of the foregoing.
8. "FOREIGN DEPOSITORY" shall mean (a) Euroclear, (b) Clearstream Banking,
societe anonyme, (c) each Eligible Securities Depository as defined in Rule
17f-7 under the Investment Company Act of 1940, as amended (the "'40 Act"),
identified to the Fund from time to time, and (d) the respective successors and
nominees of the foregoing.
9. "INSTRUCTIONS" shall mean communications transmitted by electronic or
telecommunications media, including S.W.I.F.T./I.S.I.T.C., computer-to-computer
interface, facsimile transmissions executed by an Authorized Person, or
dedicated transmission lines.
10. "ORAL INSTRUCTIONS" shall mean verbal instructions received by Custodian
from an Authorized Person or from a person reasonably believed by Custodian to
be an Authorized Person.
11. "SECURITIES" shall have the same meaning as when used in the Securities
Act of 1933, including, without limitation, any common stock and other equity
securities, bonds, debentures and other debt securities, notes, mortgages or
other obligations, and any instruments representing rights to receive, purchase,
or subscribe for the same, or representing any other rights or interests therein
(whether represented by a certificate or held in a Depository or by a
Subcustodian).
12. "SUBCUSTODIAN" shall mean a bank (including any branch thereof) or other
financial institution (other than a Foreign Depository) located outside the U.S.
which is utilized by Custodian in connection with the purchase, sale or custody
of Securities hereunder and identified to the Fund from time to time, and their
respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS
1. (a) The Fund hereby appoints Custodian as custodian of all Securities and
cash at any time delivered to Custodian during the term of this Agreement, and
authorizes Custodian to hold Securities in registered form in its name or the
name of its nominees. Custodian hereby accepts such appointment and agrees to
establish and maintain one or more separate securities accounts and cash
accounts for each Fund in which Custodian will hold Securities and cash as
provided herein. Custodian shall maintain books and records segregating the
assets of each Fund from the assets of any other Fund. Such accounts (each, an
"Account"; collectively, the "Accounts") shall be in the name of the Fund.
(b) Custodian may from time to time establish on its books and records
such sub-accounts within each Account as the Fund and Custodian may agree upon
(each a "Special Account"), and Custodian shall reflect therein such assets as
the Fund may specify in a Certificate or Instructions.
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(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, futures commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian shall transfer to such account such Securities and money as the Fund
may specify in a Certificate or Instructions.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any Securities received by it from time to time for the Fund's account.
Custodian shall be entitled to utilize Depositories, Subcustodians, and, subject
to subsection(c) of this Section 1, Foreign Depositories, to the extent possible
in connection with its performance hereunder. Securities and cash held in a
Depository or Foreign Depository will be held subject to the rules, terms and
conditions of such entity. Securities and cash held through Subcustodians shall
be held subject to the terms and conditions of Custodian's agreements with such
Subcustodians. Subcustodians may be authorized to hold Securities in Foreign
Depositories in which such Subcustodians participate. Unless otherwise required
by local law or practice or a particular subcustodian agreement, Securities
deposited with a Subcustodian, a Depositary or a Foreign Depository will be held
in a commingled account, in the name of Custodian, holding only Securities held
by Custodian as custodian for its customers. Custodian shall identify on its
books and records the Securities and cash belonging to the Fund, whether held
directly or indirectly through Depositories, Foreign Depositories, or
Subcustodians. Custodian shall, directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold
Securities in the country or other jurisdiction in which the principal trading
market for such Securities is located, where such Securities are to be presented
for cancellation and/or payment and/or registration, or where such Securities
are acquired. Custodian at any time may cease utilizing any Subcustodian and/or
may replace a Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that utilization of such
Replacement Subcustodian satisfies the requirements of the `40 Act and Rule
17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to the
contrary, Custodian shall hold Securities indirectly through a Subcustodian only
if (i) the Securities are not subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors or
operators, including a receiver or trustee in bankruptcy or similar authority,
except for a claim of payment for the safe custody or administration of
Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
(c) With respect to each Foreign Depository, Custodian shall exercise
reasonable care, prudence, and diligence (i) to provide the Fund with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing basis
and promptly notify the Fund of any material change in such risks. The Fund
acknowledges and agrees, that such analysis and monitoring shall be made on the
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basis of, and limited by, information gathered from Subcustodians, from trade
associations of which Custodian is a member from time to time, or through
publicly available information otherwise obtained by Custodian, and shall not
include any evaluation of Country Risks. As used herein the term "Country Risks"
shall mean with respect to any Foreign Depository: (a) the financial
infrastructure of the country in which it is organized, (b) such country's
prevailing custody and settlement practices, (c) nationalization, expropriation
or other governmental actions, (d) such country's regulation of the banking or
securities industry, (e) currency controls, restrictions, devaluations or
fluctuations, and (f) market conditions which affect the orderly execution of
securities transactions or affect the value of securities. Custodian represents
that each Foreign Depository in which a Subcustodian is authorized to maintain
Fund assets is an "Eligible Securities Depository" as defined in Rule 17f-7
under the '40 Act. Custodian agrees to certify to the Fund's board, annually and
upon reasonable request, that each Foreign Depository remains an Eligible
Securities Depository.
2. Custodian shall furnish Fund on-line access to daily transactions on a
real time basis and a monthly summary of all transfers to or from Fund's account
on the first business day after the month end.
3. With respect to all Securities held hereunder, Custodian shall, unless
otherwise instructed to the contrary:
(a) Collect all income, dividends, distributions and other payments due
or payable;
(b) Present for payment and collect the amount paid upon all Securities
which mature;
(c) Forward to the Fund promptly copies of all information or documents
that it may actually receive from an issuer of Securities which, in the
reasonable opinion of Custodian, are intended for the beneficial owner of
Securities;
(d) Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates under any tax laws now or hereafter in effect
in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or a
Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian promptly shall notify the Fund of rights or discretionary
actions with respect to Securities held hereunder, and of the date or dates by
when such rights must be exercised or such action must be taken, provided that
Custodian has actually received, from the issuer or the relevant Depository
(with respect to Securities issued in the United States) or from the relevant
Subcustodian, Foreign Depository, or a nationally or internationally recognized
bond or corporate action service to which Custodian subscribes, timely notice of
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such rights or discretionary corporate action or of the date or dates such
rights must be exercised or such action must be taken.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act
provided that Custodian promptly has notified the Fund of such discretionary
right or action. In order for Custodian to act, it must receive the Fund's
Certificate or Instructions at Custodian's offices, addressed as Custodian may
from time to time request, not later than noon (New York time) at least one (1)
Business Day prior to the last scheduled date to act with respect to such
Securities (or such earlier date or time as Custodian may specify to the Fund).
Custodian shall not be liable for failure to take any action relating to or to
exercise any rights conferred by such Securities, unless Custodian has failed to
timely receive the Fund's Certificate or Instruction and such failure is
attributable to Custodian's negligence or willful misconduct.
5. All voting rights with respect to Securities, however registered, shall
be exercised by the Fund or its designee. For domestic and foreign securities
Custodian will utilize a proxy service for the exercise of such voting rights.
6. Custodian shall promptly advise the Fund upon Custodian's actual receipt
of notification of the partial redemption, partial payment or other action
affecting less than all Securities of the relevant class. If Custodian, any
Subcustodian, any Depository, or any Foreign Depository holds any Securities in
which the Fund has an interest as part of a fungible mass, Custodian, such
Subcustodian, Depository, or Foreign Depository may select the Securities to
participate in such partial redemption, partial payment or other action in any
non-discriminatory manner that it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and other
governmental charges, including any interest or penalty with respect thereto
("Taxes"), with respect to any cash or Securities held on behalf of the Fund or
any transaction related thereto. The Fund shall indemnify Custodian and each
Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or
any other withholding agent is required under applicable laws (whether by
assessment or otherwise) to pay on behalf of, or in respect of income earned by
or payments or distributions made to or for the account of the Fund (including
any payment of Tax required by reason of an earlier failure to withhold).
Custodian shall, or shall instruct the applicable Subcustodian or other
withholding agent to, withhold the amount of any Tax which is required to be
withheld under applicable law upon collection of any dividend, interest or other
distribution made with respect to any Security and any proceeds or income from
the sale, loan or other transfer of any Security. In the event that Custodian or
any Subcustodian is required under applicable law to pay any Tax on behalf of
the Fund, Custodian is hereby authorized to withdraw cash from that Fund's cash
account in the amount required to pay such Tax and to use such cash, or to remit
such cash to the appropriate Subcustodian or other withholding agent, for the
timely payment of such Tax in the manner required by applicable law. If the
aggregate amount of cash in that Fund's cash accounts is not sufficient to pay
such Tax, Custodian shall promptly notify the Fund of the additional amount of
cash (in the appropriate currency) required, and the Fund shall directly deposit
such additional amount in the appropriate cash account promptly after receipt of
such notice, for use by Custodian as specified herein. In the event that
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Custodian reasonably believes that Fund is eligible, pursuant to applicable law
or to the provisions of any tax treaty, for a reduced rate of, or exemption
from, any Tax which is otherwise required to be withheld or paid on behalf of
the Fund under any applicable law, Custodian shall, or shall instruct the
applicable Subcustodian or withholding agent to, either withhold or pay such Tax
at such reduced rate or refrain from withholding or paying such Tax, as
appropriate; provided that Custodian shall have received from the Fund all
documentary evidence of residence or other qualification for such reduced rate
or exemption required to be received under such applicable law or treaty. In the
event that Custodian reasonably believes that a reduced rate of, or exemption
from, any Tax is obtainable only by means of an application for refund,
Custodian and the applicable Subcustodian shall have responsibility for
providing the Fund with the correct forms and filling them out in a timely and
accurate fashion, but no responsibility for the accuracy or validity of the
Fund's information on any forms or documentation provided solely by the Fund to
Custodian hereunder. The Fund hereby agrees to indemnify and hold harmless
Custodian and each Subcustodian for any liability arising from any
underwithholding or underpayment of any Tax which results from the inaccuracy or
invalidity of any information provided by the Fund for such forms or other
documentation prepared solely by the Fund, and such obligation to indemnify
shall be a continuing obligation of the Fund, its successors and assigns
notwithstanding the termination of this Agreement.
9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the contractual
settlement of all sale transactions, based upon advices received by Custodian
from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be
in U.S. dollars or such other currency as the Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in connection
with this Agreement may be entered with Custodian or a BNY Affiliate acting as
principal or otherwise through customary banking channels. The Fund may issue a
standing Certificate or Instructions with respect to foreign exchange
transactions, but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to the Fund. The Fund shall bear all
investment risks of investing in Securities or holding cash denominated in a
foreign currency.
10. Custodian shall promptly send to the Fund (a) any reports it receives
from a Depository on such Depository's system of internal accounting control,
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and (b) such reports on its own system of internal accounting control as the
Fund may reasonably request from time to time.
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ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund, the Fund
shall deliver to Custodian a Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be settled on the same day
the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
physical Securities against payment, delivery of such Securities and receipt of
payment therefor may not be completed simultaneously. Notwithstanding any
provision in this Agreement to the contrary, settlements, payments and
deliveries of physical Securities may be effected by Custodian or any
Subcustodian in accordance with the customary or established securities trading
or securities processing practices and procedures in the jurisdiction in which
the transaction occurs, including, without limitation, delivery to a purchaser
or dealer therefor (or agent) against receipt with the expectation of receiving
later payment for such Securities
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of Securities or interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will not be
"final" until Custodian shall have received immediately available funds which
under applicable local law, rule and/or practice are irreversible and not
subject to any security interest, levy or other encumbrance, and which are
specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf of any
Fund which results in an overdraft because the money held by Custodian in an
Account for such Fund shall be insufficient to pay the total amount payable upon
a purchase of Securities by such Fund, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises with respect to a
Fund for some other reason, including, without limitation, because of a reversal
of a conditional credit or the purchase of any currency, or if any Fund is for
any other reason indebted to Custodian (except a borrowing for investment or for
temporary or emergency purposes pursuant to a separate agreement), such
overdraft or indebtedness shall be deemed to be a loan made by Custodian to such
Fund payable on demand and shall bear interest from the date incurred at such
rate per annum as such Fund and Custodian may agree upon from time to time. In
addition, the Fund hereby agrees that Custodian shall to the maximum extent
permitted by law have a continuing lien, security interest, and security
entitlement in and to any property, including, without limitation, any
investment property or any financial asset, of such Fund at any time held by
Custodian for the benefit of such Fund or in which such Fund may have an
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interest which is then in Custodian's possession or control or in possession or
control of any third party acting in Custodian's behalf. Such Fund authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Fund's credit on Custodian's books. Custodian shall promptly
advise any Fund whenever such Fund has an overdraft or indebtedness bearing
interest as provided in this Article, or whenever Custodian intends to realize
upon its lien, security interest or security entitlement.
2. If the Fund borrows money from any bank (including Custodian if the
borrowing is pursuant to a separate agreement) for investment or for temporary
or emergency purposes using Securities held by Custodian hereunder as collateral
for such borrowings, the Fund shall deliver to Custodian a Certificate
specifying with respect to each such borrowing: (a) the Series to which such
borrowing relates; (b) the name of the bank, (c) the amount of the borrowing,
(d) the time and date, if known, on which the loan is to be entered into, (e)
the total amount payable to the Fund on the borrowing date, (f) the Securities
to be delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount of any particular
Securities, and (g) a statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such loan is in
conformance with the `40 Act and the Fund's prospectus. Custodian shall deliver
on the borrowing date specified in a Certificate the specified collateral
against payment by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or loan
agreement. Custodian shall deliver such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this Section. The Fund shall cause all Securities released from
collateral status to be the name of the Series for which such money was
received.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund ("Shares") it
shall deliver to Custodian a Certificate or Instructions specifying the amount
of money and/or Securities to be received by Custodian for the sale of such
Shares and specifically allocated to an Account for such Series.
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian to
make payment out of the money held by Custodian hereunder in connection with a
redemption of any Shares, it shall furnish to Custodian a Certificate or
Instructions specifying the total amount to be paid for such Shares. Custodian
shall make payment of such total amount to the transfer agent specified in such
Certificate or Instructions out of the money held in an Account of the
appropriate Series.
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ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution on
Shares it shall furnish to Custodian Instructions or a Certificate setting forth
with respect to the Series specified therein the date of the declaration of such
dividend or distribution, the total amount payable, and the payment date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the account of such Series the
total amount payable to the dividend agent of the Fund specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall not be
liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories or any Foreign Depositories. With
respect to any Losses incurred by the Fund as a result of the acts or failures
to act by a Subcustodian which is either a BNY Affiliate or listed on Appendix A
hereto, Custodian shall be liable to the Fund for such Losses, but only to the
extent such Losses arise out of or are caused by acts or failures to act by such
Subcustodian which are contrary to the prevailing practices or standard of care
in the relevant market in which such Subcustodian operates. With respect to any
Losses incurred by the Fund as a result of the acts or failures to act by a
Subcustodian which is not a BNY Affiliate and is not listed on Appendix A
hereto, Custodian shall take appropriate action to recover such Losses from such
Subcustodian, and Custodian's sole responsibility and liability to the Fund
shall be limited to amounts so received from such Subcustodians (exclusive of
costs and expenses incurred by Custodian). In no event shall Custodian be liable
to the Fund or any third party for special, indirect or consequential damages,
or lost profits or loss of business, arising in connection with this Agreement,
nor shall BNY or any Subcustodian be liable: (i) for acting in accordance with
any Certificate or Oral Instructions actually received by Custodian; (ii) for
acting in accordance with Instructions; (iii) for conclusively presuming that
all Instructions other than Oral Instructions are given only by person(s) duly
authorized; (iv) for any Losses due to forces beyond the control of Custodian,
including without limitation strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural catastrophes or acts of God,
interruption, loss or malfunction of utilities or communication services, or,
but only to the extent beyond Custodian's reasonable control, and only if
Custodian is maintaining the same and appropriate back-up system(s) in
accordance with industry standards and practices, interruption, loss, or
malfunction of computers (hardware or software); or (v) for any Losses arising
from the applicability of any law or regulation now or hereafter in effect, or
from the occurrence of any event, including, without limitation, implementation
or adoption of any rules or procedures of a Foreign Depository, which may
affect, limit, prevent or impose costs or burdens on, the transferability,
convertibility, or availability of any currency or Composite Currency Unit in
any country or on the transfer of any Securities, and in no event shall
Custodian be obligated to substitute another currency for a currency (including
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a currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected, limited, or
prevented by such law, regulation or event, and to the extent that any such law,
regulation or event imposes a cost or charge upon Custodian in relation to the
transferability, convertibility, or availability of any cash currency or
Composite Currency Unit, such cost or charge shall be for the account of the
Fund, and Custodian may treat any account denominated in an affected currency as
a group of separate accounts denominated in the relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and understandings
with any BNY Affiliate, whenever and on such terms and conditions as it deems
necessary or appropriate to perform its services hereunder. No such subcontract,
agreement or understanding shall discharge Custodian from its obligations
hereunder.
(c) The Fund agrees to indemnify and hold Custodian harmless from and
against any and all Losses sustained or incurred by or asserted against
Custodian by reason of or as a result of any action or inaction, or arising out
of Custodian performance hereunder, including reasonable fees and expenses of
counsel, provided however, that the Fund shall not indemnify Custodian for those
Losses arising out of Custodian's own negligence or willful misconduct, nor for
any Losses which constitute indirect, special, or consequential damages, or lost
profits or loss of business. Custodian agrees to indemnify and hold the Fund
harmless from and against any and all Losses, including reasonable fees and
expenses of counsel, sustained or incurred by or asserted against the Fund
arising out of Custodian's own negligence or willful misconduct, provided,
however, that Custodian shall not indemnify the Fund for any Losses which
constitute indirect, special, or consequential damages, or lost profits or loss
of business. This indemnity shall be a continuing obligation of Fund and
Custodian, their successors and assigns, notwithstanding the termination of this
Agreement.
2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(b) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(d) The legality of any borrowing by the Fund;
(e) Whether any Securities at any time delivered to, or held by Custodian
or by any Subcustodian, for the account of the Fund are such as properly may be
held by the Fund under the provisions of its then current prospectus and
statement of additional information, or to ascertain whether any transactions by
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the Fund, whether or not involving Custodian, are such transactions as may
properly be engaged in by the Fund.
3. Custodian may, with respect to questions of law specifically regarding an
Account, obtain the advice of counsel at its own expense and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice.
4. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any Securities
transactions effected for a Fund.
5. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall also reimburse Custodian for out-of-pocket expenses which are a normal
incident of the services provided hereunder.
6. With instructions from an Authorized Person of the Fund, the Custodian
has the right to debit any cash account for any amount payable by the Fund in
connection with any and all obligations of the Fund to Custodian. Custodian will
use its bet efforts to consult with Fund's investment advisor about the
selection of securities used to offset that Fund's obligations to Custodian. Any
such asset of, or obligation to the Fund may be transferred to Custodian and any
BNY Affiliate in order to effect the above rights.
7. The Fund will make its best efforts to forward to Custodian a Certificate
or Instructions confirming Oral Instructions by the close of business of the
same day that such Oral Instructions are given to Custodian. Fund and Custodian
agree that the fact that such confirming Certificate or Instructions are not
received or that a contrary Certificate or contrary Instructions are received by
Custodian shall affect the validity and enforceability of transactions
authorized by such Oral Instructions and effected by Custodian. If the Fund
elects to transmit Instructions through an on-line communications system offered
by Custodian, the Fund's use thereof shall be subject to the Terms and
Conditions attached as Appendix I hereto, and Custodian shall provide user and
authorization codes, passwords and authentication keys only to an Authorized
Person.
8. The books and records pertaining to the Fund which are in possession of
Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the `40 Act and the rules thereunder. The
Fund, or its authorized representatives, shall have access to such books and
records during Custodian's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Custodian to
the Fund or its authorized representative. Upon the reasonable request of the
Fund, Custodian shall provide in hard copy or on computer disc any records
included in any such delivery which are maintained by Custodian on a computer
disc, or are similarly maintained.
9. It is understood that Custodian is authorized to supply any information
regarding the Accounts which is required by any law, regulation or rule now or
hereafter in effect. Custodian shall provide the Fund with any report obtained
by Custodian on the system of internal accounting control of a Depository, and
- 12 -
with such reports on its own system of internal accounting control as the Fund
may reasonably request from time to time.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than sixty (60) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the board of the Fund, certified by the Fund's
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians, each of which shall be a bank
or trust company having not less than $2,000,000 aggregate capital, surplus and
undivided profits. In the event such notice is given by Custodian, the Fund
shall, on or before the termination date, deliver to Custodian a copy of a
resolution of the board of the Fund, certified by the Secretary or any Assistant
Secretary, designating a successor custodian or custodians. In the absence of
such designation by the Fund, Custodian may designate a successor custodian
which shall be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to the
successor custodian all Securities and money then owned by the Fund and held by
it as Custodian, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or Custodian in
accordance with the preceding Section, the Fund shall upon the date specified in
the notice of termination of this Agreement and upon the delivery by Custodian
of all Securities (other than Securities which cannot be delivered to the Fund)
and money then owned by the Fund be deemed to be its own custodian and Custodian
shall thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities which cannot be
delivered to the Fund to hold such Securities hereunder in accordance with this
Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of Authorized
Persons in the event of any change in the then present Authorized Persons. Until
such new Certificate is received, Custodian shall be fully protected in acting
upon Certificates or Oral Instructions of such present Authorized Persons.
2. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to Custodian, shall be sufficiently given if addressed to
Custodian and received by it at its offices at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
- 00 -
Xxxx 00000, or at such other place as Custodian may from time to time designate
in writing.
3. Any notice or other instrument in writing, authorized or required by this
Agreement to be given to the Fund shall be sufficiently given if addressed to
the Fund and received by it at its offices at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or at such other place as the Fund may from time to time
designate in writing.
4. Each and every right granted to either party hereunder or under any other
document delivered hereunder or in connection herewith, or allowed it by law or
equity, shall be cumulative and may be exercised from time to time. No failure
on the part of either party to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by
either party of any right preclude any other or future exercise thereof or the
exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. This Agreement
shall extend to and shall be binding upon the parties hereto, and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive laws
of The Commonwealth of Massachusetts, without regard to conflicts of laws
principles thereof. The Fund and Custodian each hereby irrevocably waives any
and all rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement.
7. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
8. Fund and Custodian agree that the obligations of each Fund are not
binding upon any of the Trustees/Directors, officers or shareholders of the Fund
individually, but are binding only upon that Fund and its assets. Each Fund
shall be severally, not jointly, liable only for its own obligations under this
Agreement.
- 14 -
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
Each Xxxx Xxxxxxx Fund listed on Schedule II
By: /s/Xxxxxxx X Xxxxx
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK
By: /s/Xxxxx X. Xxxxxxx
Title: Senior Vice President
- 15 -
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and acting
Treasurer of each Xxxx Xxxxxxx Fund listed on Schedule II (each a "Fund"), and
further certifies that the following officers or employees of the Fund have been
duly authorized in conformity with the Fund's Declaration of Trust and By-Laws
to deliver Certificates and Oral Instructions to The Bank of New York
("Custodian") pursuant to the Custody Agreement between the Fund and Custodian
dated ____________2001, and that the signatures appearing opposite their names
are true and correct:
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
------------------------- ------------------- --------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you may
currently have on file.
By:____________________________________
Title: Vice President and Treasurer
Date:
SCHEDULE II
Xxxx Xxxxxxx Funds
[include tax id #'s]
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. LICENSE; USE. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person of the Fund of
software enabling the Fund to obtain access to the System (the "Software"),
Custodian grants to the Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Written
Instructions, receiving reports, making inquiries or otherwise communicating
with Custodian in connection with the Account(s). The Fund shall use the
Software solely for its own internal and proper business purposes and not in the
operation of a service bureau. Except as set forth herein, no license or right
of any kind is granted to the Fund with respect to the Software. The Fund
acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know-how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or other
statutory or legal protections available in respect thereof. The Fund further
acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by Custodian or its
suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall you attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy, sell,
lease or provide, directly or indirectly, any of the Software or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory copyright notice or other notice included
in the Software or on any media containing the Software. The Fund shall
reproduce any such notice on any reproduction of the Software and shall add any
statutory copyright notice or other notice to the Software or media upon
Custodian's request.
2. EQUIPMENT. The Fund shall obtain and maintain at its own cost and expense
all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. PROPRIETARY INFORMATION. The Software, any data base and any proprietary
data, processes, information and documentation made available to the Fund (other
than which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of Custodian or its suppliers. The Fund
shall keep the Information confidential by using the same care and discretion
that the Fund uses with respect to its own confidential property and trade
secrets, but not less than reasonable care. Upon termination of the Agreement or
the Software license granted herein for any reason, the Fund shall return to
Custodian any and all copies of the Information which are in its possession or
under its control.
4. MODIFICATIONS. Custodian reserves the right to modify the Software from
time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and whether
with or without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND
SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE,
SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE
PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY
DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY
INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, UNLESS
CUSTODIAN OR SUCH SUPPLIER KNOWS OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH
DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD,
MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF
COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR
CAUSE BEYOND THEIR REASONABLE CONTROL.
6. SECURITY; RELIANCE; UNAUTHORIZED USE. The Fund will cause all persons
utilizing the Software and System to treat all applicable user and authorization
codes, passwords and authentication keys with extreme care, and it will
establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Instructions received by it through the System. The Fund acknowledges that it is
its sole responsibility to assure that only persons duly authorized use the
System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. SYSTEM ACKNOWLEDGMENTS. Custodian shall acknowledge through the System
its receipt of each transmission communicated through the System. In the absence
of such acknowledgment Custodian shall not be liable for any failure to act in
accordance with such transmission however, Custodian will be liable for all
transmissions where the Fund shows that such transmission was received by
Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may not be
available for every communication through the System, or for all data. The Fund
agrees that Custodian may deactivate any encryption features at any time, with
notice to the Fund, for the purpose of maintaining, repairing or troubleshooting
the System or the Software.
The Fund and the bank agree that the obligations of each Fund are not
binding upon any of the Trustees/Directors. Officers or shareholders of the Fund
individually, but are binding only upon that Fund and its assets. Each Fund
shall be severally, not jointly, liable for its own obligations under this
Agreement.
APPENDIX A
