Exhibit (g)(3)
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of January 17,
2002, by and between Each of the Parties Indicated on Appendix A (the "Funds")
and State Street Bank and Trust Company (the "Custodian"). This Amendment shall
only apply to the Funds listed on Schedule 1 (each, a "Fund"), as amended from
time to time, attached to this Amendment. Capitalized terms used in this
Amendment without definition shall have the respective meanings given to such
terms in the Custodian Contract referred to below.
WHEREAS, Each of the Parties Indicated on Appendix A and the Custodian
have entered into a Custodian Contract (the "Contract"); and
WHEREAS, each Fund listed on Schedule 1 attached hereto and the
Custodian desire to amend certain provisions of the Contract to provide for the
custody and handling of interests in Loans (as defined below).
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree as
follows:
I. New Section 20 is hereby added to the Contract, as of the effective
date of this Amendment, as set forth below.
SECTION 20. SPECIAL PROVISIONS REGARDING INTERESTS IN LOANS.
The following provisions shall apply with respect to investments,
property or assets in the nature of loans, or interests or participations in
loans, including without limitation interests in syndicated bank loans and bank
loan participations (collectively, "Loans").
SECTION 20.1 SAFEKEEPING. Instruments, certificates, agreements
and/or other documents which the Custodian may receive in respect of Loans,
if any (collectively "Financing Documents"), from time to time, shall be held
by the Custodian at its offices in Boston, Massachusetts.
SECTION 20.2 DUTIES OF THE CUSTODIAN.
1) The Custodian shall accept such Financing Documents, if any,
in respect of Loans as may be delivered to it from time to
time by a Fund. The Custodian shall be under no obligation to
examine the contents or determine the sufficiency of any such
Financing Documents or to provide any certification with
respect thereto, whether received by the Custodian as original
documents, photocopies, by facsimile or otherwise. Without
limiting the foregoing, the Custodian is under no duty to
examine any such Financing Documents to determine whether
necessary steps have been taken or requirements met in respect
of the assignment or transfer of the related Loan or
applicable interest or participation therein. The Custodian
shall be entitled to assume the genuineness, sufficiency and
completeness of any Financing Documents received, and the
genuineness and due authority of any signature appearing
thereon.
2) Notwithstanding any term of this Contract to the contrary,
with respect to any Loans, (i) the Custodian shall be under no
obligation to determine, and shall have
no liability for, the sufficiency of, or to require delivery
of, any instrument, document or agreement constituting,
evidencing or representing such Loan, other than to receive
such Financing Documents, if any, as may be delivered or
caused to be delivered to it by the Fund (or its investment
manager or investment adviser (the "Adviser") on its behalf),
(ii) without limiting the generality of the foregoing,
delivery of any such Loan (including without limitation, for
purposes of Section 2.7 above) may be made to the Custodian
by, and may be represented solely by, delivery to the
Custodian of a facsimile or photocopy of an assignment
agreement (an "Assignment Agreement") or a confirmation or
certification from the Fund (or the Adviser) to the effect
that it has acquired such Loan and/or has received or will
receive , and will deliver to the Custodian, appropriate
Financing Documents constituting, evidencing or representing
such Loan (such confirmation or certification, together with
any Assignment Agreement, collectively, an "Assignment
Agreement or Confirmation"), in any case without delivery of
any promissory note, participation certificate or similar
instrument (collectively, an "Instrument"), (iii) if an
original Instrument shall be or shall become available with
respect to any such Loan, it shall be the sole responsibility
of the Fund (or the Adviser acting on its behalf) to make or
cause delivery thereof to the Custodian, and the Custodian
shall be under no obligation at any time or times to
determine whether any such original Instrument has been
issued or made available with respect to such Loan, and shall
not be under any obligation to compel compliance by the Fund
to make or cause delivery of such Instrument to the
Custodian, and (iv) any reference to Financing Documents
appearing in Section 20.3(a) shall be deemed to include,
without limitation, any such Instrument and/or Assignment
Agreement or Confirmation.
3) If payments with respect to a Loan ("Loan Payment") are not
received by the Custodian on the date on which they are due,
as reflected in the Payment Schedule (as such term is defined
in Section 20.3 below) of the Loan ("Payment Date"), or in the
case of interest payments, not received either on a scheduled
interest payable date, as reported to the Custodian by the
Fund (or the Adviser, on its behalf) for the Loan (the
"Interest Payable Date"), or in the amount of their accrued
interest payable, the Custodian shall promptly, but in no
event later than one business day after the Payment Date or
the Interest Payable Date, give telephonic notice to the party
obligated under the Financing Documents to make such Loan
Payment (the "Obligor") of its failure to make timely payment,
and (2) if such payment is not received within three business
days of its due date, shall notify the Fund (or the Adviser on
its behalf) of such Obligor's failure to make the Loan
Payment. The Custodian shall have no responsibility with
respect to the collection of Loan Payments which are past due,
other than the duty to notify the Obligor and the Fund (or the
Adviser on its behalf) as provided herein.
4) The Custodian shall have no responsibilities or duties
whatsoever under this Contract, with respect to Loans or the
Financing Documents, except for such responsibilities as are
expressly set forth herein. Without limiting the generality of
the foregoing, the Custodian shall have no obligation to
preserve any rights against prior parties or to exercise any
right or perform any obligation in connection with the Loans
or any Financing Documents (including, without limitation, no
obligation to take any action in respect of or upon receipt of
any consent solicitation, notice of default or similar notice
received from any bank agent or Obligor, except that the
Custodian shall undertake reasonable efforts to
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forward any such notice to the Fund or the Adviser). In case
any question arises as to its duties hereunder, the Custodian
may request instructions from the Fund and shall be entitled
at all times to refrain from taking any action unless it has
received Proper Instructions from the Fund or the Adviser and
the Custodian shall in all events have no liability, risk or
cost for any action taken, with respect to a Loan, pursuant
to and in compliance with the Proper Instructions of such
parties.
5) The Custodian shall be only responsible and accountable for
Loan Payments actually received by it and identified as for
the account of the Fund; any and all credits and payments
credited to the Fund, with respect to Loans, shall be
conditional upon clearance and actual receipt by the Custodian
of final payment thereon.
6) The Custodian shall promptly, upon the Fund's request, release
to the Fund's Adviser or to any party as the Fund or the
Adviser may specify, any Financing Documents being held on
behalf of the Fund. Without limiting the foregoing, the
Custodian shall not be deemed to have or be charged with
knowledge of the sale of any Loan, unless and except to the
extent it shall have received written notice and instruction
from the Fund (or the Adviser on its behalf) with respect
thereto, and except to the extent it shall have received the
sale proceeds thereof.
7) In no event shall the Custodian be under any obligation or
liability to make any advance of its own funds in respect of
any Loan.
SECTION 20.3 RESPONSIBILITY OF THE FUND. With respect to each Loan
held by the Custodian hereunder in accordance with the provisions hereof, the
Fund shall (a) cause the Financing Documents evidencing such Loan to be
delivered to the Custodian; (b) include with such Financing Documents an
amortization schedule of payments (the "Payment Schedule") identifying the
amount and due dates of scheduled principal payments, the Interest Payable
Date(s) and related payment amount information, and such other information with
respect to the related Loan and Financing Documents as the Custodian reasonably
may require in order to perform its services hereunder (collectively, "Loan
Information"), in such form and format as the Custodian reasonably may require;
(c) take, or cause the Adviser to take, all actions necessary to acquire good
title to such Loan (or the participation therein, as the case may be), as and
to the extent intended to be acquired; and (d) cause the Custodian to be named
as its nominee for payment purposes under the Financing Documents or otherwise
provide for the direct payment of the Payments to the Custodian. The Custodian
shall be entitled to rely upon the Loan Information provided to it by the Fund
(or the Adviser on its behalf) without any obligation on the part of the
Custodian independently to verify, investigate, recalculate, update or
otherwise confirm the accuracy or completeness thereof; and the Custodian shall
have no liability for any delay or failure on the part of the Fund in providing
necessary Loan Information to the Custodian, or for any inaccuracy therein or
incompleteness thereof. With respect to each such Loan, the Custodian shall be
entitled to rely on any information and notices it may receive from time to
time from the related bank agent, Obligor or similar party with respect to the
related Loan, and shall be entitled to update its records on the basis of such
information or notices received, without any obligation on its part
independently to verify, investigate or recalculate such information.
SECTION 20.4 INSTRUCTIONS; AUTHORITY TO ACT. The certificate of the
Secretary or an Assistant Secretary of the Trust, identifying certain
individuals to be officers of the Trust or employees of the Adviser of the Fund
authorized to sign any such instructions, may be received
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and accepted as conclusive evidence of the incumbency and authority of such to
act and may be considered by the Custodian to be in full force and effect until
it receives written notice to the contrary from the Secretary or Assistant
Secretary of the Trust. Notwithstanding any other provision of this Contract,
the Custodian shall have no responsibility to ensure that any investment by the
Trust or any Fund with respect to Loans has been authorized.
SECTION 20.5 ATTACHMENT. In case any portion of the Loans or the
Financing Documents shall be attached or levied upon pursuant to an order of
court, or the delivery or disbursement thereof shall be stayed or enjoined by an
order of court, or any other order, judgment or decree shall be made or entered
by any court affecting the property of the Fund or any act of the Custodian
relating thereto, the Custodian is hereby expressly authorized in its sole
discretion to obey and comply with all orders, judgments or decrees so entered
or issued, without the necessity of inquire whether such court had jurisdiction,
and, in case the Custodian obeys or complied with any such order, judgment or
decree, it shall not be liable to anyone by reason of such compliance.
SECTION 20.6 PAYMENT OF FUND MONIES. Notwithstanding Section 2.7 and
Section 2.8 of the Custodian Contract, upon receipt of Proper Instructions (as
defined in the Custodian Contract), the Custodian shall deliver cash and/or
other assets of the Fund upon purchase of Loans to parties identified in such
Proper Instructions, which delivery may be made without contemporaneous receipt
by the Custodian of cash or other assets, including Financing Documents, in
exchange therefor. Upon such delivery of cash or other assets in accordance with
such Proper Instructions, the Custodian shall have no further responsibility or
obligation to the Fund as a custodian of the Fund with respect to the cash or
assets so delivered. In preparing reports of monies received by or paid out of
the Fund or of assets comprising the Fund, the Custodian shall be entitled to
rely upon information received from time to time regarding the Loans or Loan
Payments and shall not be responsible for the accuracy or completeness of such
information included in the Custodian's reports until such assets are received
by the Custodian.
II. Except as specifically superseded or modified hereby, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed
in its name and behalf by its duly authorized representative as of the date
first above written.
WITNESSED BY: STATE STREET BANK and TRUST COMPANY
/s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
WITNESSED BY: EACH OF THE INVESTMENT COMPANIES LISTED ON
SCHEDULE I ATTACHED
/s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxx
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Name: Xxxxxxxx X. Xxxxx Name: Xxxx X. Xxxx
Title: Secretary of certain Title: Vice President
of the Prudential
mutual funds.
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SCHEDULE 1
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to
Amendment to Custodian Contract
Dated January 17, 2002
PRUDENTIAL HIGH YIELD FUND, INC.
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