1
Exhibit 8
MASTER CUSTODIAN AGREEMENT
between
XXXX XXXXXXX MUTUAL FUNDS
and
STATE STREET BANK AND TRUST COMPANY
2
TABLE OF CONTENTS
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
2. Employment of Custodian and Property to be held by it . . . . . . . . . 3-4
3. Duties of the Custodian with Respect to Property of the Fund . . . . . 4
A. Safekeeping and Holding of Property . . . . . . . . . . . . . . . . 4
B. Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . 4-7
C. Registration of Securities . . . . . . . . . . . . . . . . . . . . 7
D. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
E. Payments for Shares of the Fund . . . . . . . . . . . . . . . . . . 8
F. Investment and Availability of Federal Funds . . . . . . . . . . . 8
G. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
H. Payment of Fund Moneys . . . . . . . . . . . . . . . . . . . . . . 9-10
I. Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . . . . . . . 10
J. Payments for Repurchases of Redemptions of Shares of the Fund . . . 11
K. Appointment of Agents by the Custodian . . . . . . . . . . . . . . 11
L. Deposit of Fund Portfolio Securities in Securities Systems . . . . 12-13
M. Deposit of Fund Commercial Paper in an Approved
Book-Entry System for Commercial Paper . . . . . . . . . . . . . . 14-16
N. Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . 16
O. Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . 16
ii
3
P. Proxies ................................................. 17
Q. Communications Relating to Fund Portfolio
Securities .............................................. 17
R. Exercise of Rights; Tender Offers .................... 17-18
S. Depository Receipts ..................................... 18
T. Interest Bearing Call or Time Deposits .................. 18
U. Options, Futures Contracts and
Foreign Currency Transactions ........................ 18-20
V. Actions Permitted Without Express Authority ............. 20
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value ......................... 20-21
5. Records and Miscellaneous Duties ........................... 21
6. Opinion of Fund's Independent Public Accountants ........... 22
7. Compensation and Expenses of Bank .......................... 22
8. Responsibility of Bank .................................. 22-23
9. Persons Having Access to Assets of the Fund ................ 23
10. Effective Period, Termination and Amendment;
Successor Custodian ........................................ 24
11. Interpretive and Additional Provisions ..................... 25
12. Certification as to Authorized Officers .................... 25
13. Notices .................................................... 25
14. Massachusetts Law to Apply ................................. 25
15. Adoption of the Agreement by the Fund ...................... 26
iii
4
MASTER CUSTODIAN AGREEMENT
This Agreement is made as of June 15, 1994 between each investment
company advised by Xxxx Xxxxxxx Advisers, Inc. which has adopted this Agreement
in the manner provided herein and State Street Bank and Trust Company
(hereinafter called "Bank", "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian
of its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement and is listed on Appendix A hereto. If the Fund is a Massachusetts
business trust or Maryland corporation, it may in the future establish and
designate other separate and distinct series of shares, each of which may be
called a "portfolio"; in such case, the term "Fund" shall also refer to each
such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Authorized Officer", shall mean any of the following officers of
the Trust: The Chairman of the Board of Trustees, the President, a Vice
President, the Secretary, the Treasurer or Assistant Secretary or Assistant
Treasurer, or any other officer of the Trust duly authorized to sign by
appropriate resolution of the Board of Trustees of the Trust.
5
(e) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(f) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository
but only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(g) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O of
Treasury Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of
Subpart O).
(h) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(i) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but
only if the Custodian has received a certified copy of a vote of the Board
approving the participation by the Fund in such system.
(j) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Xxxx Xxxxxxx
Advisers, Inc. to the Custodian through the Xxxx Xxxxxxx equity trading system
and the Xxxx Xxxxxxx fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote
delegating authority to any person or persons to give a particular class of
instructions specifically requires that the approval of any person, persons or
committee shall first have been obtained before the Custodian may act on
instructions of that class,
2
6
the Custodian shall be under no obligation to question the right of the person
or persons giving such instructions in so doing. 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. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and
votes, resolutions or proceedings of the shareholders or the Board), but,
nevertheless, except as otherwise expressly provided herein, the Custodian may
assume unless and until notified in writing to the contrary that so-called
proper instructions received by it are not in conflict with or in any way
contrary to any provisions of such governing documents and registration
statement, or votes, resolutions or proceedings of the shareholders or the
Board.
2. Employment of Custodian and Property to Be Held By It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), By-Laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of
its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily
3
7
responsible for the securities, participation interests, moneys and other
property of the Fund held by such subcustodian. Any foreign subcustodian shall
be a bank or trust company which is an eligible foreign custodian within the
meaning of Rule 17f-5 under the Investment Company Act of 1940, and the foreign
custody arrangements shall be approved by the Board and shall be in accordance
with and subject to the provisions of said Rule. For the purposes of this
Agreement, any property of the Fund held by any such subcustodian (domestic or
foreign) shall be deemed to be held by the Custodian under the terms of this
Agreement.
3. Duties of the Custodian With Respect to Property of the Fund
A. Safekeeping and Holding Of Property. The Custodian shall keep safely
all property of the Fund and on behalf of the Fund shall from time to
time receive delivery of Fund property for safekeeping. The Custodian
shall hold, earmark and segregate on its books and records for the
account of the Fund all property of the Fund, including all
securities, participation interests and other assets of the Fund (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred to
herein as a "Securities System", and (4) held by the Custodian or by
any subcustodian referred to in Section 2 hereof and maintained in any
Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities. The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, and
only in the following cases:
1) Upon Sale of such securities or participation interests for the
account of the Fund, but only against receipt of payment
therefor; if delivery is made in Boston or New York City, payment
therefor shall be made in accordance with generally accepted
clearing house procedures or by use of Federal Reserve Wire
System procedures; if delivery is made elsewhere payment therefor
shall be in accordance with the then current "street delivery"
custom or in accordance with such procedures agreed to in writing
from time to time by the parties hereto; if the sale is effected
through a Securities System, delivery and payment therefor shall
be made in accordance with the provisions of Paragraph L hereof;
if the sale of commercial paper is to be effected through an
Approved Book-Entry System for Commercial Paper, delivery and
payment
4
8
therefor shall be made in accordance with the provisions of
Paragraph M hereof; if the securities are to be sold outside the
United States, delivery may be made in accordance with procedures
agreed to in writing from time to time by the parties hereto; for
the purposes of this subparagraph, the term "sale" shall include
the disposition of a portfolio security (i) upon the exercise of
an option written by the Fund and (ii) upon the failure by the
Fund to make a successful bid with respect to a portfolio
security, the continued holding of which is contingent upon the
making of such a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests 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
or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Paragraph K hereof or into the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof; 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 or
participation interests are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with
the "street delivery" custom; provided that the Custodian shall
adopt such procedures as the Fund from time to time shall approve
to ensure their prompt return to the Custodian by the broker in
the event the broker elects not to accept them;
7) 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 of such securities, or pursuant to
any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are
5
9
to be delivered to the custodian or any subcustodian employed
pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with 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 or any
subcustodian employed pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by
the Fund (such loans to be made pursuant to the terms of the
Fund's current registration statement), but only against receipt
of adequate collateral as agreed upon from time to time by the
Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities.
10) For delivery as security in connection with any borrowings by the
Fund requiring a pledge or hypothecation of assets by the Fund
(if then permitted under circumstances described in the current
registration statement of the Fund), provided, that the
securities shall be released only upon payment to the Custodian
of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing the
loan;
11) When required for delivery in connection with any redemption or
repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement
between the Custodian (or a subcustodian employed pursuant to
Section 2 hereof) and a broker-dealer registered under the
Securities Exchange Act of 1934 and, if necessary, the Fund,
relating to compliance with the rules of The Options Clearing
Corporation or of any registered national securities exchange, or
of any similar organization or organizations, regarding deposit
or escrow or other arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures commission merchant,
relating to
6
10
compliance with the rules of the Commodity Futures Trading Commission
and/or of any contract market or commodities exchange or similar
organization, regarding futures margin account deposits or payments in
connection with futures transactions by the Fund;
14) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a vote of the
Board specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Fund shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any nominee
of the Custodian, or in the name or nominee name of any agent appointed
pursuant to Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the name or
nominee name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or Approved
Book-Entry System for Commercial Paper; provided, that securities are held
in an account of the Custodian or of such agent or of such subcustodian
containing only assets of the Fund or only assets held by the Custodian or
such agent or such subcustodian as a custodian or subcustodian or in a
fiduciary capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of the Fund
shall be in "street" or other good delivery form or shall be returned to the
selling broker or dealer who shall be advised of the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank account
or accounts in the name of the Fund, subject only to draft or order by the
Custodian acting in pursuant to the terms of this Agreement, and shall hold
in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Fund other than cash
maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund 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 the Custodian 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 Investment Company Act of 1940 and
that each such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by an Authorized
Officer. Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be subject to withdrawal only by the Custodian in that
capacity.
7
11
E. Payment for Shares of the Fund The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of
the Fund to enable the Custodian to make certain it promptly receives
the cash or other consideration due to the Fund for such new or
treasury Shares as may be issued or sold from time to time by the
Fund, in accordance with the governing documents and offering
prospectus and statement of additional information of the Fund. The
Custodian will provide prompt notification to the Fund of any receipt
by it of payments for Shares of the Fund.
F. Investment and Availability of Federal Funds Upon agreement between
the Fund and the Custodian, the Custodian shall, upon the receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties, invest in such securities and instruments
as may be set forth in such instructions on the same day as received
all federal funds received after a time agreed upon between the
Custodian and the Fund.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in connection with such
prompt collections and, without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called,
redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund, checks,
drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System or in an
Approved Book-Entry System for Commercial Paper at the time funds become
available to the Custodian; in the case of securities maintained in The
Depository Trust Company funds shall be deemed available to the Fund not
later than the opening of business on the first business day after
receipt of such funds by the Custodian.
8
12
The Custodian shall notify the Fund as soon as reasonably practicable whenever
income due on any security is not promptly collected. In any case in which the
Custodian does not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in writing, enclosing
copies of any demand letter, any written response thereto, and memoranda of all
oral responses thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action for
collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights and
other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. Payment of Fund Moneys Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures
contracts purchased for the account of the Fund but only (a) against
the receipt of:
(i) such securities registered as provided in Paragraph C hereof
or in proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the
options, futures contracts, forward contracts or options on
futures contracts
by the Custodian (or by a subcustodian employed pursuant to Section
2 hereof or by a clearing corporation of a national securities
exchange of which the Custodian is a member or by any bank, banking
institution or trust company doing business in the United States or
abroad which is qualified under the Investment Company Act of 1940
to act as a custodian and which has been designated by the Custodian
as its agent for this purpose or by the agent specifically
designated in such instructions as representing the purchasers of a
new issue of privately placed securities); (b) in the case of a
purchase effected through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected through an Approved Book-Entry
System for Commercial Paper, upon receipt of the paper by the
Custodian or subcustodian in
9
13
accordance with the conditions set forth in Paragraph M hereof;
(d) in the case of repurchase agreements entered into between the
Fund and another bank or a broker-dealer, against receipt by the
Custodian of the securities underlying the repurchase agreement
either in certificate form or through an entry crediting the
Custodian's segregated, non-proprietary account at the Federal
Reserve Bank of Boston with such securities along with written
evidence of the agreement by the bank or broker-dealer to
repurchase such securities from the Fund; or (e) with respect to
securities purchased outside of the United States, in accordance
with written procedures agreed to from time to time in writing by
the parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the
Fund in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: advisory fees, distribution plan payments,
interest, taxes, management compensation and expenses,
accounting, transfer agent and legal fees, and other 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 or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon receipt of,
in addition to proper instructions, a certified copy of a vote of
the Board, specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions signed by two officers of the Fund to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received
by the Custodian; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the
10
14
Federal Reserve System, the Custodian may transfer funds to the
account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii) written
evidence that the securities subject to such repurchase agreement have
been transferred by book-entry into a segregated non-proprietary
account of the Custodian maintained with the Federal Reserve Bank of
Boston or (iii) the safekeeping receipt, provided that such securities
have in fact been so transferred by book-entry and the written
repurchase agreement is received by the Custodian in due course; and
except that if the securities are to be purchased outside the United
States, payment may be made in accordance with procedures agreed to
from time to time by the parties thereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund From
such funds as may be available for the purpose, but subject to any
applicable votes of the Board and the current redemption and
repurchase procedures of the Fund, the Custodian shall, upon receipt
of written instructions from the Fund or from the Fund's transfer
agent or from the principal underwriter, make funds and/or portfolio
securities available for payment to holders of Shares who have caused
their Shares to be redeemed or repurchased by the Fund or for the
Fund's account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding Shares
for which certificates have not been issued. Such checking account and
such special checks shall be subject to such rules and regulations as
the Custodian and the Fund may from time to time adopt. The Custodian
or the Fund may suspend or terminate use of such checking account on
such special checks (either generally or for one or more shareholders)
at any time. The Custodian and the Fund shall notify the other
immediately of any such suspension or termination.
K. Appointment of Agents by the Custodian The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any
other bank or trust company (provided such bank or trust company is
itself qualified under the Investment Company Act of 1940 to act as a
custodian or is itself an eligible foreign custodian within the
meaning of Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian described
in this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent shall not
relieve the Custodian of any of its responsibilities or liabilities
hereunder, and as between the Fund and the Custodian the Custodian
shall be fully responsible for the acts and omissions of any such
agent. For the purposes of this Agreement, any property of the Fund
held by any such agent shall be deemed to be held by the Custodian
hereunder.
11
15
L. Deposit of Fund Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, and at
all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep securities of
the Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the
Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such
subcustodian or any other person other than assets held by the
Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund, and the
Custodian shall be fully and completely responsible for
maintaining a record keeping system capable of accurately and
currently stating the Fund's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice
or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of any entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon
(i) receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account,
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.
Copies of all notices or advises from the Securities System of
transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian
and be promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund
12
16
confirmation of each transfer to or from the account of the Fund
in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next
business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly
send to the Fund any report or other communication relating to
the Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and
the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating to
the Fund's participation in each Securities System will at all
times during regular business hours be open to the inspection of
the Funds's Authorized Officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an Authorized Officer that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from an
Authorized Officer that the Board has annually reviewed and
approved the continued use by the Fund of each Securities System,
so long as such review and approval is required by Rule 17f-4
under the Investment Company Act of 1940, and the Fund shall
promptly notify the Custodian if the use of a Securities System
is to be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such Securities System as promptly
as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such agent
or subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
13
17
M. Deposit of Fund Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial
paper of the Fund in an Approved Book-Entry System for Commercial
Paper, provided that such paper is issued in book entry form by
the Custodian or subcustodian on behalf of an issuer with which
the Custodian or subcustodian has entered into a book-entry
agreement and provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or such
subcustodian in an Approved Book-Entry System for Commercial
Paper which shall not include any assets of the Custodian or such
subcustodian or any other person other than assets held by the
Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of
the Fund which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue
of commercial paper purchased by the Fund which is included in
the System and shall at all times during regular business hours
be open for inspection by authorized officers, employees or
agents of the Fund. The Custodian shall be fully and completely
responsible for maintaining a record keeping system capable of
accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the fund only upon
contemporaneous (i) receipt of notice or advice from the issuer
that such paper has been issued, sold and transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such purchase, payment and transfer for the
account of the Fund. The Custodian shall transfer such commercial
paper which is sold or cancel such commercial paper which is
redeemed for the account of the Fund only upon contemporaneous
(i) receipt of notice or advice that payment for such paper has
been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer or
redemption and payment for the account of the Fund. Copies of all
14
18
notices, advises and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the Fund in
the form of a written advice or notice of each such transaction,
and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the System for the account of
the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
each System's accounting system, system of internal accounting
controls or procedures for safeguarding commercial paper deposited
in the System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding commercial
paper deposited in any Approved Book-Entry System for Commercial
Paper; and the Custodian shall ensure that any agent appointed
pursuant to Paragraph K hereof or any subcustodian employed
pursuant to Section 2 hereof shall promptly send to the Fund and to
the Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence
of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Approved Book-Entry
System for Commercial Paper; the Custodian shall also obtain
appropriate assurance from an Authorized Officer that the Board
has annually reviewed and approved the continued use by the Fund of
each Approved Book-Entry System for Commercial Paper, so long as
such review and approval is required by Rule 17f-4 under the
Investment Company Act of 1940, and the Fund shall promptly notify
the Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the Fund,
the Custodian will terminate the use of any such System as promptly
as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System
for Commercial Paper is maintained by the subcustodian) shall issue
physical commercial paper or promissory notes whenever requested to
do so by the Fund or in the event of an electronic system failure
which impedes issuance, transfer or custody of direct issue
commercial paper by book-entry.
15
19
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of any Approved Book-Entry System for
Commercial Paper by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or subcustodians
or of any of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce effectively
such rights as it may have against this System, the issuer of the
commercial paper or any other person; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against this System, the issuer
of the commercial paper or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
N. Segregated Account The Custodian shall upon receipt of proper instructions
establish and maintain a segregated account or accounts for and on behalf of
the Fund, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Paragraph L hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and any registered broker-dealer (or
any futures commission merchant), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating
cash or U.S. Government securities in connection with options purchased,
sold or written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the
Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper purposes, but only, in the
case of clause (iv), upon receipt of, in addition to proper instructions, a
certificate signed by two officers of the Fund, setting forth the purpose
such segregated account and declaring such purpose to be a proper purpose.
O. 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 securities of the Fund held by it and in connection with
transfers of securities.
16
20
P. Proxies The Custodian shall, with respect to the securities held by
it hereunder, cause to be promptly delivered to the Fund all forms of
proxies and all notices of meetings and any other notices or
announcements or other written information affecting or relating to
the securities, and upon receipt of proper instructions shall execute
and deliver or cause its nominee to execute and deliver such proxies
or other authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute any proxy
to vote thereon or give any consent or take any other action with
respect thereto (except as otherwise herein provided) unless ordered
to do so by proper instructions.
Q. Communications Relating to Fund Portfolio Securities The Custodian
shall deliver promptly to the Fund all written information (including,
without limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by
the Fund) received by the Custodian from issuers and other persons
relating to the securities and participation interests being held for
the Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information received by
the Custodian from issuers and other persons relating to the
securities and participation interests whose tender or exchange is
sought and from the party (or his agents) making the tender or
exchange offer.
R. Exercise of Rights: Tender Offers In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities and
participation interests held by the Custodian under this Agreement,
the Custodian shall have responsibility for promptly notifying the
Fund of all such offers in accordance with the standard of reasonable
care set forth in Section 8 hereof. For all such offers for which the
Custodian is responsible as provided in this Paragraph R, the Fund
shall have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of proper
instructions, the custodian shall timely deliver to the issuer or
trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the new securities and cash, if
any, acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon receipt
of proper instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered
securities are to be
17
21
returned to the Custodian or subcustodian employed pursuant to Section 2
hereof. Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise directed
to the contrary by proper instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions, or
similar rights of security ownership, and shall thereafter promptly
notify the Fund in writing of such action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to
the depository used by an issuer of American Depository Receipts,
European Depository Receipts or International Depository Receipts
(hereinafter collectively referred to as "ADRs") for such securities,
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depository
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of a nominee of the Custodian or in the name
or nominee name of any subcustodian employed pursuant to Section 2
hereof, for delivery to the Custodian or such subcustodian at such place
as the Custodian or such subcustodian may from time to time designate.
The Custodian shall, upon receipt of proper instructions, surrender ADRs
to the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall,
upon receipt of proper instructions, place interest bearing fixed term
and call deposits with the banking department of such banking
institution (other than the Custodian) and in such amounts as the Fund
may designate. Deposits may be denominated in U.S. Dollars or other
currencies. The Custodian shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and
other appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the banking institution. Such deposits shall be deemed
portfolio securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the collection of
income from such accounts and the transmission of cash to and from such
accounts.
U. Options Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered broker-dealer
and, if necessary, the Fund,
18
22
relating to compliance with the rules of the Options Clearing
Corporation or of any registered national securities exchange or
similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the
purchase or writing of an option on a security, securities
index, currency or other financial instrument or index by the
Fund; deposit and maintain in a segregated account of each Fund
separately, either physically or by book-entry in a Securities
System, securities subject to a covered call option written by
the Fund; and release and/or transfer such securities or other
assets only in accordance with a notice or other communication
evidencing the expiration, termination or exercise of such
covered option furnished by the Options Clearing Corporation,
the securities or options exchange on which such covered option
is traded or such organization as may be responsible for
handling such options transactions.
2. Futures Contracts The Custodian shall, upon receipt of
proper instructions, receive and retain confirmations and other
documents, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the Fund; deposit
and maintain in a segregated account, for the benefit of any
futures commission merchant, assets designated by the Fund as
initial, maintenance or variation "margin" deposits (including
xxxx-to-market payments) intended to secure the Fund's
performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written
by Fund, in accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any contract
market or commodities exchange or similar organization regarding
such margin deposits or payments; and release and/or transfer
assets in such margin accounts only in accordance with any such
agreements or rules.
3. Foreign Exchange Transactions The Custodian shall,
pursuant to proper instructions, enter into or cause a
subcustodian to enter into foreign exchange contracts, currency
swaps or options to purchase and sell foreign currencies for
spot and future delivery on behalf and for the account of the
Fund. Such transactions may be undertaken by the Custodian or
subcustodian with such banking or financial institutions or
other currency brokers, as set forth in proper instructions.
Foreign exchange contracts, swaps and options shall be deemed to
be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same as
and no greater than the Custodian's responsibility in respect of
other portfolio securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of cash from the
currency broker or banking or financial
19
23
institution with which the contract or option is made, the
maintenance of proper records with respect to the transaction and
the maintenance of any segregated account required in connection
with the transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or banking or
financial institutions with which the Fund deals or for their
failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of
proper instructions and insofar as funds are made available to
the Custodian for the purpose, the Custodian may (if determined
necessary by the Custodian to consummate a particular transaction
on behalf and for the account of the Fund) make free outgoing
payments of cash in the form of U.S. dollars or foreign currency
before receiving confirmation of a foreign exchange contract or
swap or confirmation that the countervalue currency completing
the foreign exchange contract or swap has been delivered or
received. The Custodian shall not be responsible for any costs
and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange; provided that the Custodian shall
nevertheless be held to the standard of care set forth in, and
shall be liable to the Fund in accordance with, the provisions of
Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Fund:
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 by the Custodian to the Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund
except as otherwise directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account and render as at the close of business on each day a detailed
statement of the
20
24
amounts received or paid out and of securities received or delivered for the
account of the Fund during said day and such other statements, including a
daily trial balance and inventory of the Fund's portfolio securities; and shall
furnish such other financial information and data as from time to time
requested by the Treasurer or any Authorized Officer of the Fund; and shall
compute and determine, as of the close of regular trading on the New York Stock
Exchange, or at such other time or times as the Board may determine, the net
asset value of a share in the Fund, such computation and determination to be
made in accordance with the governing documents of the Fund and the votes and
instructions of the Board at the time in force and applicable and promptly
notify the Fund and its investment adviser and such other persons as the Fund
may request of the result of such computation and determination. In computing
the net asset value the Custodian may rely upon security quotations received by
telephone or otherwise from sources or pricing services designated by the Fund
by proper instructions, and may further rely upon information furnished to it
by any authorized officer of the Fund relative (a) to liabilities of the Fund
not appearing on its books of account, (b) to the existence, status and proper
treatment of any reserve or reserves, (c) to any procedures established by the
Board regarding the valuation of portfolio securities, and (d) to the value to
be assigned to any bond, note, debenture, Treasury xxxx, repurchase agreement,
subscription right, security, participation interest or other asset or property
for which market quotations are not readily available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, audits of accounts, and
other ministerial matters of like nature; and, upon request, shall furnish the
Fund's auditors with an attested inventory of securities held with appropriate
information as to securities in transit or in the process of purchase or sale
and with such other information as said auditors may from time to time request.
The Custodian shall also maintain records of all receipts, deliveries and
locations of such securities, together with a current inventory thereof, and
shall conduct periodic verifications (including sampling counts at the
Custodian) of certificates representing bonds and other securities for which it
is responsible under this Agreement in such manner as the Custodian shall
determine from time to time to be advisable in order to verify the accuracy of
such
21
25
inventory. The Bank shall not disclose or use any books or records it has
prepared or maintained by reason of this Agreement in any manner except as
expressly authorized herein or directed by the Fund, and the Bank shall keep
confidential any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to enable the Fund to obtain from year to year favorable opinions
from the Fund's independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's registration
statement and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable care, the
Bank as Custodian and Agent shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to subcustodians
generally in Section 2 hereof,
22
26
provided that, regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a branch of a
U.S. bank, the Custodian shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from, or caused by, the direction of or
authorization by the Fund to maintain custody of any securities or cash of the
Fund in a foreign country including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, acts of war, civil war
or terrorism, insurrection, revolution, military or usurped powers, nuclear
fission, fusion or radiation, earthquake, storm or other disturbance of nature
or acts of God.
If the Fund requires the Bank in any capacity to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Bank, result in the Bank or its nominee assigned to the
Fund being liable for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund
held by the Custodian or be authorized or permitted to withdraw
any investments of the Fund, nor shall the Custodian deliver any
assets of the Fund to any such person. No officer or director,
employee or agent of the Custodian who holds any similar position
with the Fund or the investment adviser of the Fund shall have
access to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly Authorized Officers, employees, representatives
or agents of the Custodian or other persons or entities for whose
actions the Custodian shall be responsible to the extent permitted
hereunder, or to the Fund's independent public accountants in
connection with their auditing duties performed on behalf of the
Fund.
23
27
(iii) Nothing in this Section 9 shall prohibit any Authorized Officer,
employee or agent of the Fund or of the investment adviser of
the Fund from giving instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, 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, that the 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 Federal Deposit Insurance
Corporation or by the Banking Commissioner of The Commonwealth of Massachusetts
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction. Upon termination of the
Agreement, the Fund 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.
Unless the holders of a majority of the outstanding shares of the Fund vote to
have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having not
less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant
24
28
to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and
the Fund 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 governing instruments of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
12. Certification as to Authorized Officers
The Secretary of the Fund shall at all times maintain on file with the
Bank his certification to the Bank, in such form as may be acceptable to the
Bank, of the names and signatures of the Authorized Officers of each fund, it
being understood that upon the occurrence of any change in the information set
forth in the most recent certification on file (including without limitation
any person named in the most recent certification who has ceased to hold the
office designated therein), the Secretary of the Fund shall sign a new or
amended certification setting forth the change and the new, additional or
omitted names or signatures. The Bank shall be entitled to rely and act upon
instructions from any officers named in the most recent certification.
13. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to Xxxxxx X. Xxxxxx, Xxxx Xxxxxxx Advisers, Inc., 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to such other address as the Fund may
have designated to the Bank, in writing, or to State Street Bank and Trust
Company, shall be deemed to have been properly delivered or given hereunder to
the respective addresses.
14. Massachusetts Law to Apply; Limitations on liability
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian
25
29
and the Fund arising out of this Agreement, and the Custodian shall not seek
satisfaction of any such claim or obligation from the trustees or shareholders
of the Fund. Each Fund, and each series or portfolio of a Fund, shall be liable
only for its own obligations to the Custodian under this Agreement and shall
not be jointly or severally liable for the obligations of any other Fund,
series or portfolio hereunder.
15. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement. This Agreement shall be
deemed to supersede and terminate, as of the date first written above, all
prior agreements between the Fund and the Bank relating to the custody of the
Fund's assets.
* * * * *
26
30
In Witness Whereof, the parties hereto have caused this agreement to be
executed in duplicate as of the date first written above by their respective
officers thereunto duly authorized.
Xxxx Xxxxxxx Mutual Funds listed on Appendix A
by: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
Attest:
/s/ Xxxxx X. Xxxxx
------------------
State Street Bank and Trust Company
by: /s/ Xxxxxx X. Xxxxx
-------------------------------
Attest:
/s/ Xxxxxx Xxxxx Xxxxx
----------------------
27
31
APPENDIX A
[EFFECTIVE JUNE 15, 1994]
Xxxx Xxxxxxx Xxxx Management Fund
Xxxx Xxxxxxx World Fund
Xxxx Xxxxxxx Freedom Pacific Basin Equities Fund
Xxxx Xxxxxxx Freedom Global Rx Fund
Patriot Premium Dividend Fund I
Patriot Premium Dividend Fund II
Patriot Select Dividend Trust
Patriot Global Dividend Fund
Patriot Preferred Dividend Fund
Freedom Investment Trust II
Xxxx Xxxxxxx Freedom Global Fund
Xxxx Xxxxxxx Freedom Global Income Fund
Xxxx Xxxxxxx Xxxxx-Term Strategic Income Fund
Xxxx Xxxxxxx Freedom International Fund
Freedom Investment Trust III
Xxxx Xxxxxxx Discovery Fund
Xxxx Xxxxxxx Freedom Environmental Fund
The Southeastern Thrift and Bank Fund, Inc.
28
