MASTER CUSTODIAN AGREEMENT
between
XXXX XXXXXXX MUTUAL FUNDS
and
XXXXX BROTHERS XXXXXXXX & COMPANY
Amended and Restated
March 9, 1999
TABLE OF CONTENTS
-----------------
1. Definitions..............................................................................1-3
2. Employment of Custodian and Property to be Held by It......................................3
3. The Custodian as a Foreign Custody Manager.................................................3
A. Definitions...................................................................3-4
B. Delegation to the Custodian as Foreign Custody Manager........................4-5
C. Countries Covered...............................................................5
D. Scope of Delegated Responsibilities...........................................5-7
E. Standard of Care as Foreign Custody Manager of the Fund.........................7
F. Reporting Requirements........................................................7-8
G. Representations with Respect to Rule 17f-5......................................8
H. Effective Date and Termination of the Custodian as..............................8
Foreign Custody Manager
I. Withdrawal of Custsodian as Foreign Custody Manager...........................8-9
with Respect to Designated Countries and with Respect
to Eligible Foreign Custodians
J. Guidelines for the Exercise of Delegated Authority...........................9-10
and Provision of Information Regarding Country Risk
K. Most Favored Client.........................................................10-11
L. Direction as to Eligible Foreign Custodians....................................11
4. Duties of the Custodian with Respect toProperty of the Fund...............................11
A. Safekeeping and Holding of Property..........................................11
B. Delivery of Securities....................................................11-14
C. Registration of Securities...................................................14
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D. Bank Accounts.............................................................14-15
E. Payments for Shares of the Fund..............................................15
F. Investment and Availability of Federal Funds.................................15
G. Collections...............................................................15-16
H. Payment of Fund Moneys....................................................16-18
I. Liability for Payment in Advance of Receipt..................................18
of Securities Purchased
J. Payments for Repurchases of Redemptions of................................18-19
Shares of the Fund
K. Appointment of Agents by the Custodian.......................................19
L. Deposit of Fund Portfolio Securities in Securities Systems................19-21
M. Deposit of Fund Commercial Paper in an....................................21-23
Approved Book-Entry System for Commercial Paper
N. Segregated Account........................................................23-24
O. Ownership Certificates for Tax Purposes......................................24
P. Proxies......................................................................24
Q. Communications Relating to Fund Portfolio Securities......................24-25
R. Exercise of Rights; Tender Offers............................................25
S. Depository Receipts.......................................................25-26
T. Interest Bearing Call or Time Deposits.......................................26
U. Options, Futures Contracts and Foreign....................................26-28
Currency Transactions
V. Actions Permitted Without Express Authority..................................28
5. Duties of Bank with Respect to Books of Account and...................................28-29
Calculations of Net Asset Value
ii
6. Records and Miscellaneous Duties..........................................................29
7. Opinion of Fund`s Independent Public Accountants..........................................29
8. Compensation and Expenses of Bank.........................................................29
9. Responsibility of Bank.................................................................30-31
10. Persons Having Access to Assets of the Fund...............................................31
11. Effective Period, Termination and Amendment;...........................................31-32
Successor Custodian
12. Interpretive and Additional Provisions....................................................32
13. Certification as to Authorized Officers...................................................33
14. Notices...................................................................................33
15. Massachusetts Law to Apply; Limitations on Liability......................................33
16. Adoption of the Agreement by the Fund.....................................................33
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MASTER CUSTODIAN AGREEMENT
This Agreement made as of the 30th day of September, 1998 as amended and
restated March 9, 1999 between each investment company advised by Xxxx Xxxxxxx
Advisers, Inc. which has adopted this Agreement in the manner provided herein
and Xxxxx Brothers Xxxxxxxx & Company (hereinafter called "Bank", "Custodian"
and "Agent"), a limited partnership formed under the laws of the State of New
York with a principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000.
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 Fund: 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 Fund duly authorized to sign by
appropriate resolution of the Board of Trustees.
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(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 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.
(i) 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. (the
"Adviser") to the Custodian 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, 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
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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. "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 responsible for the securities, participation
interests, moneys and other property of the Fund held by such subcustodian. 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. The Custodian as a Foreign Custody Manager
------------------------------------------
A. Definitions Capitalized terms in this Article 3 shall have the
following meanings:
3
(a) "Country risk" means all factors reasonably related to the systemic
risk of holding Foreign Assets in a particular country including, but not
limited to, a country's political environment; economic and financial
infrastructure (including financial institutions such as any Mandatory
Securities Depositories operating in the country); prevailing custody and
settlement practices; and laws and regulations applicable to the
safekeeping and recovery of Foreign Assets held in custody in that country.
(b) "Eligible Foreign Custodian" has the meaning set forth in section
(a)(1) of Rule 17f-5 and also includes a U.S. Bank.
(c) "Foreign Assets" means any of the Fund's investments (including foreign
currencies) for which the primary market is outside the United States and
cash and cash equivalents as are reasonably necessary to effect the Fund's
transactions in these investments.
(d) "Foreign Custody Manager" has the meaning set forth in section (a)(2)
of Rule 17f-5; it is a Fund's Board of Directors or any person serving as
the Board's delegate under sections (b) or (d) of Rule 17f-5.
(e) "Mandatory Securities Depository" means a Securities Depository the use
of which is mandatory (i) by law or regulation; (ii) because securities
cannot be withdrawn from the depository; (iii) because maintaining
securities outside the Securities Depository would impair the liquidity of
the securities because settlement within the depository is mandatory and
the period of time required to deposit securities is longer than the
settlement period or where particular classes of transactions, such as
large trades or turn-around trades, are not available if the securities are
held in physical form, or (iv) because maintaining securities outside of
the Securities Depository is not consistent with prevailing custodial or
market practices generally accepted by institutional investors.
(f) "Securities Depository" has the same meaning set forth in section
(a)(6) of Rule 17f-5: it is a system for the central handling of securities
where all securities are of a particular class or series of any issuer
deposited within the system are treated as fungible and may be transferred
or pledged by bookkeeping entry without physical delivery of the
securities.
(g) "U.S. Bank" means a bank which qualifies to serve as a custodian of
assets of investment companies under ss.17(f) of the Investment Company Act
of 1940, as amended.
B. Delegation to the Custodian as Foreign Custody Manager Each Fund,
by resolution adopted by its Board, hereby appoints the Custodian
as the Foreign Custody Manager of the Fund and delegates to the
Custodian, the responsibilities set forth in this Article 3 with
respect to Foreign Assets held outside the United States, and the
Custodian hereby accepts this delegation.
4
C. Countries Covered The Foreign Custody Manager shall be responsible
for performing the delegated responsibilities defined below only
with respect to the countries listed on Schedule A, which may be
amended from time to time by the Foreign Custody Manager.
Mandatory Securities Depositories are listed on Schedule B, which
may be amended from time to time by the Foreign Custody Manager.
Schedules A and B may also be amended in accordance with
subsection F of Article 3.
D. Scope of Delegated Responsibilities
1) Selection of Eligible Foreign Custodians Subject to the
provisions of this Article 3 and Rule 17f-5 (and any other
applicable law), the Foreign Custody Manager may place and
maintain the Foreign Assets in the care of an Eligible
Foreign Custodian selected by the Foreign Custody Manager
in each country listed on Schedule A, as amended from time
to time. In addition, the Foreign Custody Manager shall
provide the Fund with all requisite forms and
documentation to open an account in any country listed on
Schedule A as requested by any Authorized Officer and
shall assist the Fund with the filing and processing of
these forms and documents. Execution of this amended and
restated Agreement by the Fund shall be deemed to be a
Proper Instruction to open an account, or to place or
maintain Foreign Assets in each country listed on Schedule
A.
In performing its delegated responsibilities as Foreign
Custody Manager to place or maintain Foreign Assets with
an Eligible Foreign Custodian, the Foreign Custody Manager
shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to
custodians in the country in which the Foreign Assets will
be held by that Eligible Foreign Custodian, after
considering all factors relevant to the safekeeping of
those assets. These factors include, without limitation:
(i) the Eligible Foreign Custodian's practices, procedures
and internal controls, including but not limited to, the
physical protections available for certificated securities
(if applicable), its methods of keeping custodial records
and its security and data protection practices;
(ii) whether the Eligible Foreign Custodian has the
requisite financial strength to provide reasonable care
for Foreign Assets;
(iii) the Eligible Foreign Custodian's general reputation
and standing and, in the case of any Securities
Depository, the Securities Depository's operating history
and the number of participants; and
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(iv) whether the Fund will have jurisdiction over and be
able to enforce judgments against the Eligible Foreign
Custodian, such as by virtue of the existence of any
offices of the Eligible Foreign Custodian in the United
States or the Eligible Foreign Custodian's consent to
service of process in the United States.
2) Contracts With Eligible Foreign Custodians For each
Eligible Foreign Custodian selected by the Foreign Custody
Manager, the Foreign Custody Manager shall (or, in the
case of a Securities Depository which is not a Mandatory
Securities Depository, may under the rules or established
practices or procedures of the Securities Depository)
enter into a written contract governing the Fund's foreign
custody arrangements with the Eligible Foreign Custodian.
The Foreign Custody Manager shall determine that each
contract will provide reasonable care for the Foreign
Assets held by that Eligible Foreign Custodian based on
the standards specified in paragraph 1 of subsection D of
Article 3 of this Agreement. Each contract shall include
provisions that provide:
(i) for indemnification or insurance arrangements (or any
combination of the foregoing) so that the Fund will be
adequately protected against the risk of loss of the
Foreign Assets held in accordance with the contract;
(ii) that the Foreign Assets will not be subject to any
right, security interest, lien or claim of any kind in
favor of the Eligible Foreign Custodian or its creditors
except a claim of payment for their safe custody or
administration or, in the case of cash deposits, liens or
rights in favor of creditors of the Eligible Foreign
Custodian arising under bankruptcy, insolvency or similar
laws;
(iii) that beneficial ownership of the Foreign Assets will
be freely transferable without the payment of money or
value other than for safe custody or administration;
(iv) that adequate records will be maintained identifying
the Foreign Assets as belonging to the Fund or as being
held by a third party for the benefit of the Fund;
(v) that the Fund's independent public accountants will be
given access to those records or confirmation of the
contents of those records; and
6
(vi) that the Fund will receive periodic reports with
respect to the safekeeping of the Foreign Assets,
including, but not limited to, notification of any
transfer of the Foreign Assets to or from the Fund's
account or a third party account containing the Foreign
Assets held for the benefit of the Fund, or, in lieu of
any or all of the provisions set forth in (i) through (vi)
above, such other provisions that the Foreign Custody
Manager determines will provide, in their entirety, the
same or greater level of care and protection for the
Foreign Assets as the provisions set forth in (i) through
(vi) above in their entirety.
3) Monitoring In each case in which the Foreign Custody
Manager maintains Foreign Assets with an Eligible Foreign
Custodian selected by the Foreign Custody Manager, the
Foreign Custody Manager shall establish a system to
monitor at reasonable intervals the initial and continued
appropriateness of (i) maintaining the Foreign Assets with
the Eligible Foreign Custodian and (ii) the contract
governing the custody arrangements established by the
Foreign Custody Manager with the Eligible Foreign
Custodian. The Foreign Custody Manager shall consider all
factors and criteria set forth in subparagraphs 1 and 2 of
subsection D of Article 3 of this Agreement.
E. Standard of Care as Foreign Custody Manager of the Fund In
performing the responsibilities delegated to it, the Foreign Custody
Manager agrees to exercise reasonable care, prudence and diligence as a
person having responsibility for the safekeeping of assets of
management investment companies registered under the Investment Company
Act of 1940, as amended, would exercise. The Foreign Custody Manager
agrees to notify immediately the Adviser and the Board if, at any time,
the Foreign Custody Manager believes it cannot perform, in accordance
with the foregoing standard of care, its duties hereunder generally or
with respect to any country specified in Schedule A.
F. Reporting Requirements The Foreign Custody Manager shall list on
Schedule A the Eligible Foreign Custodians selected by the Foreign
Custody Manager to maintain the Fund's assets. The Foreign Custody
Manager shall report the withdrawal of the Foreign Assets from an
Eligible Foreign Custodian and the placement of the Foreign Assets with
another Eligible Foreign Custodian by providing to the Adviser an
amended Schedule A promptly. The Foreign Custody Manager shall make
written reports notifying the Adviser and the Board of any other
material change in the foreign custody arrangements of the Fund
described in this Article 3. Amended Schedules A or B and material
change reports shall be provided to the Board quarterly, provided that,
if the Foreign Custody Manager or the Adviser determines that any
7
matter should be reported sooner, the Foreign Custody Manager shall
promptly, following the occurrence of the event, direct the report to
the Fund's Secretary for forwarding to the Board. At least annually,
the Foreign Custody Manager shall provide the Adviser and the Board a
written statement enabling the Board to determine that it is reasonable
to rely on the Foreign Custody Manager to perform its delegated duties
under this Article 3 and that the foreign custody arrangements
delegated to the Foreign Custody Manager continue to meet the
requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended. The Foreign Custody Manager will also provide monthly reports
on each Eligible Foreign Custodian listing all holdings and current
market values.
G. Representations with respect to Rule 17f-5 The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5.
The Fund represents to the Custodian that the Board has determined that
it is reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Article as the Foreign
Custody Manager of the Fund.
H. Effective Date and Termination of the Custodian as Foreign Custody
Manager The Board's delegation to the Custodian as Foreign Custody
Manager of the Fund shall be effective as of the date of execution of
this amended and restated Agreement and shall remain in effect until
terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective sixty days after receipt by the non-terminating party of the
notice.
I. Withdrawal of Custodian as Foreign Custody Manager with respect to
Designated Countries and with respect to Eligible Foreign Custodians
Following the receipt of Proper Instructions directing the Foreign
Custody Manager to close the account of the Fund with the Eligible
Foreign Custodian selected by the Foreign Custody Manager in a
designated country and to remove that country from Schedule A, the
delegation by the Board to the Custodian as Foreign Custody Manager for
that country shall be deemed to have been withdrawn with respect to
that country and the Custodian shall cease to be the Foreign Custody
Manager of the Fund with respect to that country after settlement of
all pending trades.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a country listed on Schedule A upon
written notice to the Fund in accordance with subsection F. Sixty days
(or other period agreed to by the parties in writing) after receipt of
any notice by the Fund, the Custodian shall have no further
responsibility as Foreign Custody Manager to the Fund with respect to
that country.
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In the event the Foreign Custody Manager determines that the custody
arrangements with an Eligible Foreign Custodian it has selected are no
longer appropriate because the applicable Eligible Foreign Custodian is
no longer able to provide reasonable care for Foreign Assets held in
the country, or an arrangement no longer meets the requirements of Rule
17f-5, the Foreign Custody Manager shall notify the Adviser, the Board
and the Fund in accordance with subsection F hereunder. If the Adviser
determines that withdrawal is in the best interest of the Fund, the
Foreign Custody Manager shall withdraw all Foreign Assets from the
Eligible Foreign Custodian, as soon as reasonably practicable, and
shall provide alternative safe keeping acceptable to the Foreign
Custody Manager. If the Adviser determines that it is in the best
interest of the Fund to withdraw all Foreign Assets and this withdrawal
would require liquidation of any Foreign Assets or would materially and
adversely impair the liquidity, value or other investment
characteristic of any Foreign Assets, the Foreign Custody Manager shall
immediately provide information regarding the particular circumstances
to the Adviser and to the Board and shall act in accordance with
instructions received from an Authorized Officer, with respect to the
liquidation or other withdrawal.
J. Guidelines for the Exercise of Delegated Authority and Provision of
Information Regarding Country Risk Nothing in this Article 3 shall
require the Foreign Custody Manager to consider Country Risk as part of
its delegated responsibilities under subsection D of Article 3. The
Fund and the Custodian each expressly acknowledge that the Foreign
Custody Manager shall not be responsible for, or liable for any loss in
connection with the placement of Foreign Assets with or withdrawal of
Foreign Assets from a Mandatory Securities Depository nor be delegated
any responsibilities under this Article 3 with respect to Mandatory
Securities Depositories other than those set forth below.
With respect to the countries listed in Schedule A, or added thereto,
the Foreign Custody Manager agrees to provide annually to the Board and
the Adviser, information relating to the Country Risks of holding
Foreign Assets in such countries, including but not limited to, the
Mandatory Securities Depositories, if any, operating in the country. In
addition, the Foreign Custody Manager shall use reasonable care in the
gathering of this information and with regard to, among other things,
the completeness and accuracy of this information. The information
furnished annually by the Foreign Custody Manager to the Board should
include but not be limited to the following, if available:
9
(i) Legal Opinion regarding whether applicable foreign law
would restrict the access of the Fund's independent public
accountants to the books and records of the foreign
custodian, whether applicable foreign law would restrict
the Fund's ability to recover its assets in the event of
bankruptcy of the foreign custodian, whether applicable
foreign law would restrict the Fund's ability to recover
assets lost while under the foreign custodian's control,
the likelihood of expropriation, nationalization, freezes
or confiscation of the Fund's assets and whether there are
reasonably foreseeable difficulties in converting the
Fund's cash into U.S. dollars, or such other form of Legal
Opinion as is customary in association with Rule 17f-5
from time to time,
(ii) audit report of the Foreign Custody Manager,
(iii) copy of balance sheet from annual report of the
custodian,
(iv) summary of Central Depository Information,
(v) country profile materials containing
market practice for: delivery versus payment,
settlement method, currency restrictions, buy-in
practice, Foreign ownership limits and unique market
arrangements,
(vi) The Foreign Custody Manager shall also provide such
other information as may be reasonably available relating
to Mandatory Securities Depositories, and, in accordance
with applicable requirements promulgated by the SEC from
time to time, to the criteria as set forth on Appendix B
hereto, as such Appendix may be revised by the parties
hereto from time to time; and,
(vii) such other materials as the Board may reasonably
request from time to time, including copies of contracts
with the subcustodians.
K. Most Favored Client If at any time the Foreign Custody Manager shall
be a party to an agreement, to serve as a Foreign Custody Manager to an
investment company, that provides for either (a) a standard of care
with respect to the selection of Eligible Foreign Custodians in any
jurisdiction higher than that set forth in paragraph 1 of subsection D
of Article 3 of this Agreement or (b) a standard of care with respect
to the exercise of the Foreign Custody Manager's duties other than that
set forth in subsection F of Article 3 of this Agreement, the Foreign
Custody Manager agrees to notify the Fund of this fact and to raise the
applicable standard of care hereunder to the standard specified in the
other agreement. In the event that the Foreign Custody Manager shall in
the future offer review or information services with respect to
Mandatory Securities Depositories in addition to any services provided
hereunder, the Foreign Custody Manager agrees that it shall notify the
Fund of this fact and shall offer these services to the Fund.
10
L. Direction as to Eligible Foreign Custodians Notwithstanding Article
3 of this Agreement, the Fund or the Adviser may direct the Custodian
to place and maintain Foreign Assets with a particular Eligible Foreign
Custodian acceptable to the Foreign Custody Manager. In such event, the
Custodian shall be entitled to rely on any instruction as a Proper
Instruction and may limit its duties under this Article 3 of the
Agreement with respect to such arrangements by describing any
limitations in writing with respect to each instance.
4. 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
11
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 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 to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
12
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
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 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 of the Fund. 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.
14
The Custodian may, on behalf of any Fund, open and cause to be
maintained outside the United States a bank account with (a) an
Eligible Foreign Custodian (as defined in Article 3) or (b) any person
with whom property of the Fund may be placed and maintained outside of
the United States under (i) ss.17(f) or 26(a) of the 1940 Act, without
regard to Rule 17f-5 or (ii) an order of the U.S. Securities and
Exchange Commission (a "permissible Foreign Custodian"). Such
account(s) shall be subject only to draft or order by the Custodian or
Eligible Foreign Custodian or Permissible Foreign Custodian acting
pursuant to the terms of this Agreement to hold cash received by or
from or for the account of the Fund.
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;
15
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.
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 Paragrap
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
16
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
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
17
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 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. With respect to securities
and funds held by a subcustodian, either directly or indirectly
(including by a Securities Depository or clearing corporation),
notwithstanding any provisions of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be
made prior to receipt of securities or payment respectively, and
securities or payment may be received in a form in accordance with (a)
governmental regulations, (b) rules of Securities Depositories and
clearing agencies, (c) generally accepted trade practice in the
applicable local market, (d) the terms and characteristics of the
particular investment, or (e) the terms of instructions.
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 or
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.
18
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.
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 a Securities Depository (as defined in Article 3).
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.
19
(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
recordkeeping 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 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 Fund'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 officer of the Fund that the Board
has approved the use of a particular Securities System; the Custodian
shall also obtain appropriate assurance from the officers of the Fund
20
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.
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
21
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 recordkeeping 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 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.
22
(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 the officers of the
Fund 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.
(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 the 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 the 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
23
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 foreign,
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.
P. ProxiesThe 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.
24
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 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.
25
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, 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 for 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 other organization as may be
responsible for handling such options transactions. The
Custodian and the broker-dealer shall be responsible for the
sufficiency of assets held in each Fund's segregated account
in compliance with applicable margin maintenance requirements.
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
26
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. The Custodian
and the futures commission merchant shall be responsible for
the sufficiency of assets held in the segregated account in
compliance with the applicable margin maintenance and
xxxx-to-market payment requirements.
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 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, the Custodian may, and insofar as
funds are made available to the Custodian for the purpose, (if
determined necessary by the Custodian to consummate a
27
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 9.
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.
5. 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 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
28
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.
6. 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 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.
7. 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.
8. Compensation and Expenses of Bank
29
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 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.
9. 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, 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 county 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.
30
Except as may arise from the Custodian's own negligence or bad faith,
the Custodian shall be without liability to any Fund for any loss,
liability, claim or expense resulting from or caused by anything which
is (a) part of Country Risk or (b) part of the "prevailing country
risk" of the Fund, as that term is used in SEC Release Nos. IC-22658;
IS-1080 (May 12, 1997) or as that term is now or in the future
interpreted by the U.S. Securities and Exchange Commission or by the
staff of the Division of Investment Management of the Commission.
10. 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.
(iii) Nothing in this Section 9 shall prohibit any 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.
11. 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.
31
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 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.
12. 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.
13. Certification as to Authorized Officers
32
The Secretary of the Fund shall at all times maintain on file with the
Bank his/her 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 occurence 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 ommitted names or signatures. The Bank shall be entitled to rely and
act upon any officers named in the most recent certification.
14. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to Xxxxx 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
Attn: Manager, Securities Department, Xxxxx Brothers Xxxxxxxx &
Company, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000 shall be deemed to have been
properly delivered or given hereunder to the respective addressees.
15. 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 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.
16. 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.
* * *
33
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
By:________________________________________
Xxxxxx Xxxx
Senior Vice President and Chief Financial Officer
Attest:
Xxxxx Brothers Xxxxxxxx & Company
By:_____________________________
Attest:
s:\agrcont\agreement\custodia\bbh amended with delegation.doc
34
APPENDIX A
----------
Xxxxx Brothers Xxxxxxxx & Company
[EFFECTIVE AUGUST 28, 2000]
Xxxx Xxxxxxx Equity Trust
Xxxx Xxxxxxx Growth Trends Fund
Xxxx Xxxxxxx Series Trust
Xxxx Xxxxxxx Real Estate Fund
B-1
Appendix B
----------
Additional Information Relating to Mandatory Securities Depositories
The Foreign Custody Manager shall furnish annually to the Board such
information as may be reasonably available relating to the proposed
"safeharbor" criteria with respect to Mandatory Securities Depositories
as set forth below:
(a) whether an Eligible Foreign Custodian or a U.S. bank
holding assets at the depository undertakes to adhere to the rules,
practices and procedures of the depository;
(b) whether a regulatory authority with oversight responsibility for
the depository has issued a public notice that the depository is not in
compliance with any material capital, solvency, insurance, or other
similar financial strength requirements imposed by such authority, or,
in the case of such a notice having been issued, that such notice has
been withdrawn or the remedy of such noncompliance has been publicly
announced by the depository;
(c) whether a regulatory authority with oversight responsibility over
the depository has issued a public notice that the depository is not in
compliance with any material internal controls requirement imposed by
such authority, or, in the case of such notice having been issued, that
such notice has been withdrawn or the remedy of such noncompliance has
been publicly announced by the depository;
(d) whether the depository maintains the assets of the Fund's depositor
under no less favorable safekeeping conditions than those that apply
generally to depositors;
(e) whether the depository maintains records that segregate the
depository's own assets from the assets of depositors;
(f) whether the depository maintains records that identify the
assets of each of its depositors;
(g) whether the depository provides periodic reports to its depositors
with respect to the safekeeping of assets maintained by the depository,
including, but not limited to, notification of any transfer to or from
a depositor's account; and
(h) whether the depository is subject to periodic review, such as
audits by independent accountants or inspections by regulatory
authorities.
B-1
