EXHIBIT (g)(3)
AGREEMENT BETWEEN
XXXXX BROTHERS XXXXXXXX & CO.
AND
XXXXXXXX PARTNERS STRATEGY FUND, INC.
TABLE OF CONTENTS
1.Employment of Custodian 1
2. Powers and Duties of the Custodian with respect to
Property of the Fund held by the Custodian 1
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 3
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 5
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 7
L. Demand Deposit Bank Accounts 7
M. Interest Bearing Call or Time Deposits 8
N. Foreign Exchange Transactions
and Futures Contracts 9
O. Stock Loans 10
P. Collections 10
Q. Dividends, Distributions and Redemptions 11
R. Proxies, Notices, Etc. 12
S. Nondiscretionary Details 12
T. Bills 13
U. Deposit of Fund Assets in Securities Systems 13
V. Other Transfers 15
W. Investment Limitations 16
X. Proper Instructions 16
Y. Segregated Account 18
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 19
4. Assistance by the Custodian as to Certain Matters 26
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent 26
A. Records 26
B. Accounts 27
C. Access to Records 27
D. Disbursements 27
6. Reporting Responsibilities 27
7. Standard of Care and Related Matters 28
A. Liability of the Custodian with Respect to Proper
Instructions; Evidence of Authority; Etc. 28
B. Liability of the Custodian with
Respect to Use of Securities System 29
C. Liability of the Custodian with respect to
Subcustodians 30
D. Standard of Care; Liability;
Indemnification 31
E. Reimbursement of Advances 33
F. Security for Obligations to Custodian 33
G. Appointment of Agents 34
X. Xxxxxx of Attorney 34
8. Compensation of the Custodian 34
9. Termination; Successor Custodian 35
10. Amendment 35
11. Governing Law 36
12. Notices 36
13. Binding Effect 37
14. Amendment and Restatement of Existing Custodian Agreement 37
15. Counterparts 37
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AMENDED AND RESTATED CUSTODIAN AGREEMENT
AGREEMENT made this ______ day of ________, 1991, between XXXXXXXX
PARTNERS STRATEGY FUND, INC., a Maryland corporation (the "Fund") and Xxxxx
Brothers Xxxxxxxx & Co. a New York limited partnership (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians appointed pursuant to the provisions of Section 3 hereof, the
Custodian shall have and perform the following powers and duties:
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A. Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund, from
time to time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2U) or a foreign
securities depository utilized directly by the Custodian as permitted by Section
3. The Custodian shall segregate, keep and maintain the assets of the Fund
separate and apart from the assets of the Custodian. The Custodian shall
maintain complete and accurate records identifying all securities held by it on
behalf of the Fund.
C. Registered Name; Nominee - To hold registered securities of the Fund
(1) in the name or any nominee name of the Custodian or the Fund, or in the name
or any nominee name of any Agent appointed pursuant to Section 7G, or (2) in
street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity, provided that securities are held in an
account of the Custodian containing only assets of the Fund or only assets held
as fiduciary or custodian for customers.
D. Purchases - Upon receipt of proper instructions, as defined in
Section 2X, insofar as funds are available for the
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purpose, to pay for and receive securities purchased for the account of the
Fund, payment being made only upon receipt of the securities; provided, however,
that the Custodian may make payment, which may be prior to receipt of
securities, and may accept delivery of securities, including the form of
securities received, in accordance with governmental regulations, or the rules
of Securities Systems or other U.S. or, subject to compliance by BBH to the
provisions of the last sentence of the fifth paragraph of Section 3, foreign
securities depositories and clearing agencies, or generally accepted trade
practice in the applicable U.S. or, subject to compliance by BBH to the last
sentence of the fifth paragraph of Section 3, foreign market, or the terms of
the instrument representing the security. Receipt of securities on behalf of the
Fund shall be by the Custodian or a Subcustodian or by credit to an account
which one of them may have with a bank, Securities System, other U.S. or,
subject to compliance by BBH to the provisions of the last sentence of the fifth
paragraph of Section 3, foreign securities depositary or clearing agency, or
other financial institution approved by the Fund.
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the
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issuer of such securities and to deposit any such securities in accordance with
the terms of any reorganization or protective plan. Without proper instructions,
the Custodian may surrender securities in temporary form for definitive
securities, may surrender securities for transfer into a name or nominee name as
permitted in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund but only
against payment therefor; provided, however, that the Custodian may make
delivery, which may be prior to receipt of payment, and may accept payment,
including the form of payment received, in accordance with governmental
regulations, or the rules of Securities Systems or other U.S. or, subject to
compliance by BBH to the provisions of the last sentence of the fifth paragraph
of Section 3, foreign securities depositories and clearing agencies, or
generally accepted trade practice in the applicable U.S. or, subject to
compliance by BBH to the provisions of the last sentence of the fifth paragraph
of Section 3, foreign market, or the terms of the instrument representing the
security. Receipt of payment on behalf of the Fund shall be by the Custodian or
a Subcustodian or
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by credit to an account which one of them may have with a bank, Securities
System, other U.S. or foreign securities depositary or clearing agency, or other
financial institution approved by the Fund.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
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 Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
Upon receipt of proper instructions, to 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 depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee
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thereof, or to the agent of either, warrants, puts, calls, rights or similar
securities for the purpose of being exercised or sold, provided that the new
securities and cash, if any, acquired by such action are to be delivered to the
Custodian, and, upon receipt of proper instructions, to deposit securities upon
invitations for tenders of securities, provided that the consideration is to be
paid or delivered or the tendered securities are to be returned to the
Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase of writing of an option
on a security or securities index by the Fund, to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System or
foreign securities depository utilized directly by the Custodian, securities
subject to a covered call option written by the Fund; and to release and/or
transfer such securities or other assets only in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer relating to
such securities or other assets a notice or other communication evidencing the
expiration, termination or exercise of such covered option furnished by The
Options Clearing Corporation, the
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securities or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options
transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate a separate
account or accounts in the name of the Fund on the Custodian's books subject
only to draft or order by the Custodian. All funds received by the Custodian
from or for the account of the Fund shall be deposited in said account(s). The
responsibilities of the Custodian to the Fund for deposits accepted on the
Custodian's books shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) (hereinafter collectively referred
to as "demand deposit bank accounts") shall be in the name of the Custodian for
account of the Fund and subject only to the Custodian's draft or order. Such
demand deposit accounts may be
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opened with Banking Institutions in the United States and in other countries and
may be denominated in either U. S. Dollars or other currencies as the Fund may
determine. All such deposits shall be deemed to be portfolio securities of the
Fund and accordingly the responsibility of the Custodian therefore shall be the
same as and no greater than the Custodian's responsibility in respect of other
portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed, as the
Fund may determine, with the Custodian or with Subcustodians or other Banking
Institutions. Deposits may be denominated in U. S. Dollars or other currencies
and need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that 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, other than those placed with the Custodian, shall be
deemed portfolio securities of the Fund and the responsibilities of the
Custodian therefor shall be the same as those for other portfolio securities of
the Fund. The responsibility of the
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Custodian for such deposits accepted on the Custodian's books shall be that of
a U. S. bank for a similar deposit.
N. Foreign Exchange Transactions and Futures Contracts - Pursuant to
proper instructions, to enter into foreign exchange contracts 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 with such Banking Institutions, including the Custodian and
Subcustodian(s) as principals, as approved and authorized by the Fund. Foreign
exchange contracts and options other than those executed with the Custodian,
shall be deemed to be portfolio securities of the Fund and the responsibilities
of the Custodian therefor shall be the same as those for other portfolio
securities of the Fund. Upon receipt of proper instructions to receive and
retain confirmations evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; to deposit and maintain in a
segregated account, for the benefit of any futures commission merchant or to pay
to such futures commission merchant, assets designated by the fund as initial,
maintenance or variation "margin" deposits intended to secure the Fund's
performance of its obligations under any futures contracts purchased or sold or
any options on futures contracts written by the Fund, in accordance with the
provisions of any agreement or agreements among any of the Fund, the Custodian
and such futures commission merchant, designated to
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comply with the rules of the Commodity Futures Trading Commission and/or any
contract market, or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such margin accounts
only in accordance with any such agreements or rules.
O. Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to the Securities System or foreign securities
depository utilized directly by the Custodian require that such Securities
System or foreign securities depository may deliver the securities to the
borrower thereof only upon receipt of the collateral for such borrowing.
P. Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder, and
in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when securities
are called, redeemed, retired, mature or otherwise become payable; provided that
the payment is to be made in such form and at such time, as is in accordance
with the terms of the agreement relating to the security, or such proper
instructions as the Custodian may receive, or governmental regulations, the
rules of Securities
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Systems or other U.S. or, subject to compliance by BBH to the provisions of the
last sentence of the fifth paragraph of Section 3, foreign securities
depositories and clearing agencies, or generally accepted trade practice in the
applicable U.S. or, subject to compliance by BBH to the provisions of the last
sentence of the fifth paragraph of Section 3, foreign market; (ii) to execute
ownership and other certificates and affidavits for all federal and state or
foreign tax purposes in connection with receipt of income, principal or other
payments with respect to securities of the Fund or in connection with transfer
of securities; and (iii) pursuant to proper instructions to take such other
actions with respect to the collection or receipt of funds or transfer of
securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from
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the Shareholder Servicing Agent (given by such person or persons and in such
manner on behalf of the Shareholder Servicing Agent as the Fund shall have
authorized), the Custodian shall release funds or securities, insofar as
available, to the Shareholder Servicing Agent or as such Agent shall otherwise
instruct for payment to Fund shareholders who have delivered to such Agent a
request for repurchase or redemption of their shares of capital stock of the
Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to 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 such 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.
S. Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Portfolio held by the
Custodian except as otherwise directed from time to time by the
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Directors or Trustees of the Fund, and (2) to make payments to itself or others
for minor expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
T. Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart O, or (iii)
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 and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents (as
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said term is defined in Section 7G) appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the Investment Company Act of 1940 and the rules and regulations thereunder), in
a Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) 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;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an 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 upon (i) receipt of 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 advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by
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the Custodian or an Agent as referred to above, and be provided to the Fund at
its request. The Custodian shall furnish the Fund confirmation of each transfer
to or from the account of the Fund in the form of a written advice or notice 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;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
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provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - 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 assume unless and until
notified in writing to the contrary that proper instructions received by it are
not in conflict with or in any way contrary to any provisions of the Fund's
Declaration of Trust or Certificate of Incorporation or By-Laws (or comparable
documents) or votes or proceedings of the shareholders or Directors of the Fund.
The Custodian shall in no event be liable to the Fund and shall be indemnified
by the Fund for any violation which occurs as a result of carrying out
instructions given by the Fund of any investment limitations to which the Fund
is subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
X. Proper Instructions - Proper instructions shall mean a tested telex
from the Fund, or a telecopy from the Fund by which the receiver is able to
verify by codes or otherwise with a reasonable degree of certainty that the Fund
is the sender of the telecopy, or a written request, direction, instruction or
certification signed or initialled on behalf of the Fund by one
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or more person or persons as the Board of Directors or Trustees of the Fund
shall have from time to time authorized, provided, however, that no such
instructions directing the delivery of securities or the payment of funds to an
authorized signatory of the Fund shall be signed by such person. Those persons
authorized to give proper instructions may be identified by the Board of
Directors or Trustees by name, title or position and will include at least one
officer empowered by the Board to name other individuals who are authorized to
give proper instructions on behalf of the Fund. Telephonic or other oral
instructions given by any one of the above persons will be considered proper
instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. Oral instructions will be confirmed by tested telex or in writing in
the manner set forth above but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian by or on behalf of
the Fund (including any of its officers, Directors, Trustees, employees or
agents) and will deliver to the Custodian a similar authorization from any
investment manager or adviser or person or entity with similar reponsibilities
which is authorized to give proper instructions on behalf of the Fund to the
Custodian. Proper instructions may
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relate to specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of such
device or system.
Y. Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2U hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. (or any futures commission
merchant registered under the Commodity Exchange Act) relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the
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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)
as mutually agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment
of Subcustodians: Securities, funds and other property of the Fund may be held
by subcustodians and secondary subcustodians appointed pursuant to the
provisions of this Section 3. The Custodian may, at any time and from time to
time, appoint any bank or trust company (meeting the requirements of a custodian
or an "eligible foreign custodian" under the Investment Company Act of 1940 as
amended (The "1940 Act") and the rules and regulations thereunder) to act as a
subcustodian for the Fund, and any such Subcustodian may, at any time and from
time to time, appoint any bank or trust company (meeting the requirements of a
custodian or an "eligible foreign custodian" under the 1940 Act and the rules
and regulations thereunder) to act as a secondary subcustodian for the Fund (any
such subcustodian or secondary subcustodian being herein referred to as a
"Subcustodian"); and the Custodian may also utilize directly and any
Subcustodian may utilize such securities depositories located outside the United
States (as shall be approved in writing by Fund) and as meet the requirements of
an "eligible foreign custodian" as aforesaid;
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provided that the Fund shall have approved in writing (1) any such bank or trust
company (including any secondary Subcustodian) and the subcustodian agreement to
be entered into between such bank or trust company and the Custodian or, in the
case of a secondary Subcustodian, the subcustodian agreement to be entered into
between the Subcustodian and the secondary Subcustodian, and (2) if the
Subcustodian is a bank organized under the laws of a country other than the
United States, the country or countries in which the Subcustodian is authorized
to hold securities, cash and other property of the Fund, and (3) the securities
depositories, if any, through which the Subcustodian or the Custodian is
authorized to hold securities, cash and other property of the Fund. Upon such
approval by the Fund, the Custodian is authorized on behalf of the Fund to
notify each Subcustodian of its appointment as such.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or securities depositories are changed,
added or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
for the
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Fund to give the approval required by the preceding paragraph and for the
Custodian to put the appropriate arrangements in place with such Subcustodian,
including negotiation of a subcustodian agreement and submission of such
subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
The Fund hereby directs the Custodian and each approved Subcustodian,
until instructed to the contrary by proper instructions, to deposit in non-U.S.
securities depositories that have been approved by the Fund all securities of
the Fund that are eligible for deposit therein and to utilize such securities
depositories to the extent possible in connection with settlements of purchases
and sales of securities and other deliveries and returns of securities. Where
securities are deposited by the Custodian or an approved Subcustodian in a
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securities depository, the Custodian or Subcustodian, as the case may be, shall
identify as belonging to such Custodian or Subcustodian as agent for the Fund a
quantity of securities in a fungible bulk of securities shown in such
Custodian's or Subcustodian's account on the books of such securities
depository. Securities and moneys deposited in a securities depository will be
represented in accounts which include only assets held by the Custodian or
Subcustodians for customers, including but not limited to, accounts in which the
Custodian or Subcustodians act in a fiduciary or agency capacity. The Custodian
and each Subcustodian shall hold securities of the Fund which are not held in a
securities depository physically segregated at all times from those of the
Custodian or such Subcustodian.
With respect to securities and funds held by the Custodian or a
Subcustodian, either directly, or indirectly by a securities depository or
clearing agency approved by the Fund, notwithstanding any provision of this
Agreement to the contrary, the Custodian or such Subcustodian may act in
accordance with the prevailing customs and practices and the governmental
regulations of, or the rules of securities depositories and clearing agencies
located in, jurisdictions where custodial or subcustodial services are provided
hereunder in connection with securities and custody transactions, including, but
not limited to, settlements of securities transactions (such as with respect to
the form in
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which securities or payment may be received and whether payment for securities
purchased and delivery of securities sold may be made prior to receipt of the
securities or payment, respectively). The Custodian agrees periodically to
advise the Fund of the nature of such customs, practices, regulations and rules
and periodically to update such information, including by means of the
Custodian's Country Practices Settlement Manual or other communication sent to
clients from time to time and to notify the Fund as promptly as practicable of
any change in such customs, practices, rules or regulations, provided, that if
prior notice is not practicable, the Custodian and any Subcustodian may act in
accordance with such customs, practices, rules and regulations prior to advising
the Fund of such change.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations and shall
notify the Fund as promptly as practicable of any failure of a Subcustodian to
perform its obligations in any material respect. In the event that the Custodian
is unable promptly to cause such Subcustodian to perform fully its obligations
thereunder, the Custodian shall forthwith upon the Fund's request terminate such
Subcustodian in accordance with the termination provisions under the applicable
subcustodian agreement and, if necessary or
-25-
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
At the written request of the Fund, the Custodian will terminate any
subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may (a) in its discretion, remove any Subcustodian not
holding assets of the Fund, directly or indirectly, and (b) remove any
Subcustodian holding assets of the Fund if the Custodian determines in good
faith that prompt removal of such Subcustodian is required to protect the assets
of the Fund, provided that in either case the Custodian will so notify the Fund
as promptly as practicable following the Custodian's decision to so terminate a
Subcustodian. The Custodian may otherwise, in its discretion, remove any
Subcustodian if the Custodian advises the Fund of its desire to remove such
Subcustodian and, upon the Fund's request, the Custodian appoints a successor
subcustodian approved by the Fund,
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such removal not to take effect, if the Fund has requested a successor, until
the appointment and approval of such successor.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment to a Subcustodian in respect of a valid claim for
indemnification arising out of such Subcustodian's acting as a custodian of the
Fund's assets pursuant to a Subcustodian agreement approved by the Fund, the
Fund will reimburse the Custodian the amount of such payment except in respect
of any negligence or misconduct of the Custodian.
The Custodian represents and warrants that each Subcustodian is as of
the date hereof either a bank as defined in Section 2(a)(5) of the 1940 Act or
an "Eligible Foreign Sub-Custodian" as defined in Rule 17f-5 under the 1940 Act
or as granted by an exemption pursuant to Section 6(c) under the 1940 Act.
The Custodian agrees to furnish to the Fund such information which the
Custodian shall be able to obtain with reasonably diligent efforts with respect
to each Subcustodian and which the Custodian believes is reasonably required to
enable the Fund and its directors to fulfill their obligations as set forth in
Rule 17f-5 under the 1940 Act or, in the event the Custodian is unable to obtain
such information with reasonably diligent efforts, the Custodian shall promptly
go notify the Fund.
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The Custodian shall monitor the foreign custodial arrangements
involving each Subcustodian to determine compliance with the requirements of
Rule 17f-5 under the 1940 Act and agrees as promptly as practicable to inform
the Fund of any failure of such arrangements to comply with rule 17f-5 under the
1940 Act and any failure of such arrangements to comply with rule 17f-5 under
the 1940 Act and of any material changes of which the Custodian shall become
aware adversely affecting the ability of the Subcustodian to so comply.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the Fund's
financial agent. With respect to the appointment as financial agent, the
Custodian shall have and perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor Custodian.
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B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the
Custodian pursuant to Sections 5A and 5B shall at all times during the
Custodian's regular business hours be open to inspection and audit by officers
of, agents of, attorneys for and auditors employed by the Fund and by employees
and agents of the Securities and Exchange Commission, provided that all such
individuals shall observe all security requirements of the Custodian applicable
to its own employees having access to similar records within the Custodian and
such regulations as may be reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or cause
to be paid, insofar as funds are available for the purpose, bills, statements
and other obligations of the Fund (including but not limited to interest
charges, taxes, management fees, compensation to Fund officers and employees,
and other operating expenses of the Fund).
6. Reporting Responsibilities - The Custodian shall furnish the Fund or
its designee, on each business day in Boston, Massachusetts and New York, New
York, confirmations and a summary of all transactions and entries for the Fund
from the prior business day involving the Custodian or any Subcustodian or any
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arrangements implemented by the Custodian or any Subcustodian involving a
Securities System, Banking Institution, securities depository or clearing
agency, specifying the Custodian or Subcustodian responsible for such
transactions and entries; and the Custodian shall, at least monthly and from
time to time, deliver to the Fund or its designee a detailed statement of the
securities and monies held for the Fund by the Custodian and each Subcustodian
(whether held directly or indirectly by a Securities System, Banking
Institution, securities depository or clearing agency), specifying the Custodian
or Subcustodian holding such securities or moneys.
7. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of
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the Shareholder Servicing Agent, and any resolutions, votes, instructions or
directions of the Fund's Board of Directors or Trustees or shareholders. Such
certificate may be accepted and relied upon by the Custodian as conclusive
evidence of the facts set forth therein and may be considered in full force and
effect until receipt of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of (i) counsel regularly retained by the Custodian in
respect of custodian matters, (ii) counsel for the Fund, subject to the
following sentence, or (iii) such other counsel as the Fund and the Custodian
may agree upon, with respect to all legal matters, and the Custodian shall be
without liability for any action reasonably taken or omitted pursuant to such
advice. The Custodian shall be entitled, at the expense of the Fund, to receive
advice of counsel for the Fund only upon the approval of an officer of the Fund,
which approval shall not be unreasonably withheld.
B. Liability of the Custodian with Respect to Use of Securities System
- With respect to the portfolio securities, cash and other property of the Fund
held by a Securities System,
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the Custodian shall be liable to the Fund only for any loss or damage to the
Fund resulting from use of the Securities System if caused by any negligence,
misfeasance or misconduct of the Custodian or any of its agents or of any of its
or their employees or from any failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the Securities System. 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 to the Fund if and to the extent that the Fund has not been made whole
for any such loss or damage.
C. Liability of the Custodian with Respect to Subcustodians The
Custodian shall indemnify against and hold harmless the Fund from any losses,
actions, claims, demands, expenses and proceedings, including counsel fees,
arising out of or resulting from the acts or omissions of any Subcustodian to
the extent that under the terms set forth in the subcustodian agreement between
the Custodian and the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary
Subcustodian) has failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement as determined in accordance with the
law which is adjudicated to govern such agreement and in accordance with any
determination of any court as to the duties
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of said Subcustodian pursuant to said agreement. The Custodian shall also be
liable to the Fund for its own negligence in transmitting any instructions
received by it from the Fund and for its own negligence in connection with the
delivery of any securities or funds held by it to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The Custodian shall
be held only to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, provided that the Custodian shall not thereby
be required to take any action which is in contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its nominees
from any losses, actions, claims, demands, expenses and proceedings including
counsel fees, incurred or assessed against it or its nominees in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's breach of the relevant standard of conduct set forth in this
Agreement. Without limiting the foregoing indemnification obligation of the
Fund, the Fund agrees to indemnify the Custodian and any nominee in whose name
portfolio securities or other property of the Fund is registered against any
liability the Custodian or such nominee may incur by reason of taxes assessed to
the Custodian or such nominee or other costs, liability or expense incurred by
the Custodian or such nominee resulting directly or indirectly from the fact
that portfolio securities or other property of the Fund is registered in the
name of the Custodian or such nominee.
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It is understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, a securities depository, an agent of
the Custodian or a Subcustodian, a Securities System, or a Banking Institution,
or for any loss arising from a foreign currency transaction or contract, where
the loss results from a Sovereign Risk or where the entity maintaining such
securities, currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the Custodian or
a Subcustodian, a Securities System or a Banking Institution, has exercised
reasonable care maintaining such property or in connection with the transaction
involving such property. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions exchange controls, taxes, levies
or other charges affecting the Fund's property; or acts of war, terrorism,
insurrection or revolution; or any other act or event beyond the Custodian's
control.
The Custodian shall indemnify against and hold harmless the Fund from
any losses, actions, claims, demands, expenses and proceedings, including
counsel fees, arising out of the
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negligence, misfeasance or misconduct of the Custodian with respect to the
safekeeping of the securities and assets of the Fund and the performance of its
duties under this Agreement.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
8, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Fund's property,
including securities, to the extent necessary to obtain reimbursement or
indemnification.
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G. Appointment of Agents - The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company as its agent (an "Agent") to carry out such of the provisions of this
Agreement as the Custodian may from time to time direct, the action of any Agent
to be deemed the action of the Custodian for all purposes of this Agreement,
provided, however, that the appointment of such Agent (other than an Agent
appointed pursuant to the third paragraph of Section 3) shall not relieve the
Custodian of any of its responsibilities under this Agreement, and provided
further, that the Custodian shall not appoint any Agent to hold securities
outside of the United States without the Fund's prior consent, except as
otherwise permitted in the third paragraph of Section 3.
X. Xxxxxx of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by the
Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
8. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 7E, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
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9. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until 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 seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 7E and 8, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
10. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the
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Custodian and the Fund may agree in writing from time to time on such provisions
interpretative 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. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
11. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
12. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Chairman of the Board or to such other address as the Fund may
have designated to the Custodian in writing, or to the Custodian at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Manager, Securities Department,
or to such other address as the Custodian may have designated to the Fund in
writing, shall be deemed to have been properly delivered or given hereunder to
the respective addressee.
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13. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
14. Amendment and Restatement of Existing Custodian Agreement: This
Agreement amends and restates the existing Custodian Agreement, dated as of
August 21, 1991 between the Fund and the Custodian (the "Existing Custodian
Agreement"), and the Existing Custodian Agreement as restated herein shall
continue hereunder, effective as of the date of the Exisiting Custodian
Agreement.
15. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
XXXXXXXX PARTNERS XXXXX BROTHERS XXXXXXXX & CO.
STRATEGY FUND, INC.
By per pro
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