EXHIBIT 8
CUSTODY AGREEMENT
BETWEEN
BATTERY PARK FUNDS, INC.
AND
THE BANK OF NEW YORK
Agreement made as of this first day of October, 1996, between BATTERY PARK
FUNDS, INC., a Maryland Corporation organized and existing under the laws of
the State of Maryland, having its principal office and place of business at 2
World Financial Xxxxxx, Xxxxxxxx X, 00xx Xxxxx, Xxx Xxxx, XX, 00000-0000
(hereinafter called the "Corporation"), and THE BANK OF NEW YORK, a New York
corporation authorized to do a banking business, having its principal office
and place of business at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter called the "Custodian").
W I T N E S S E T H :
That for and in consideration of the mutual promises hereinafter set forth,
the Corporation and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
1. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
2. "Call Option" shall mean an over the counter or exchange traded option
with respect to Securities other than Stock Index Options, Futures
Contracts, and Futures Contract Options entitling the holder, upon
timely exercise and payment of the exercise price, as specified therein,
to purchase from the writer thereof the specified underlying Securities.
3. "Clearing Member" shall mean a registered broker-dealer which is a
clearing member under the rules of O.C.C. and a member of a national
securities exchange qualified to act as a custodian for an investment
company, or any broker-dealer reasonably believed by the Custodian to be
such a clearing member.
4. "Collateral Account" shall mean an account maintained and specifically
allocated to a Series under the terms of this Agreement as a segregated
account, by recordation or otherwise, within the custody account in
which certain Securities and/or other assets of the Corporation
specifically allocated to such Series shall be deposited and withdrawn
from time to time in
accordance with Proper Instructions received by the Custodian in
connection with such transactions as the Corporation may from time to
time determine.
5. "Covered Call Option" shall mean an exchange traded option entitling the
holder, upon timely exercise and payment of the exercise price, as
specified therein, to purchase from the writer thereof the specified
underlying Securities (excluding Futures Contracts) which are owned by
the writer thereof and subject to appropriate restrictions.
6. "Depository" shall mean The Depository Corporation Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission,
its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized
to act as a depository under the Investment Company Act of 1940, its
successor or successors and its nominee or nominees, specifically
identified in a certified copy of a resolution of the Corporation's
Board of Directors specifically approving deposits therein by the
Custodian and those book-entry systems approved pursuant to Rule 17f-4
under the Investment Company Act of 1940, by the Corporation's Board of
Directors.
7. "Derivative" shall mean puts, calls, straddles, futures, forwards,
interest rate swaps, caps, collars, ceilings and floors and other
interest rate protection instruments and any related options, and
currency swaps.
8. "Financial Futures Contract" shall mean the firm commitment to buy or
sell fixed income securities including, without limitation, U.S.
Treasury Bills, U.S. Treasury Notes, U.S. Treasury Bonds, domestic
bank certificates of deposit, and Eurodollar certificates of deposit,
during a specified month at an agreed upon price.
9. "Futures Contract" shall mean a Financial Futures Contract and/or Stock
Index Futures Contracts.
10. "Futures Contract Option" shall mean an option with respect to a Futures
Contract.
11. "Margin Account" shall mean a segregated account in the name of a
broker, dealer, futures commission merchant, or a Clearing Member, or in
the name of the Corporation for the benefit of a broker, dealer, futures
commission merchant, or Clearing Member, or otherwise, in accordance
with an agreement between the Corporation, the Custodian and a broker,
dealer, futures commission merchant or a Clearing Member (a "Margin
Account Agreement"), separate and distinct from the custody account, in
which certain Securities and/or money of the Corporation shall be
deposited and withdrawn from time to time in connection with such
transactions as the Corporation may from time to time determine.
Securities held in the Book-Entry System or the Depository shall be
deemed to have been deposited in, or withdrawn from, a Margin Account
upon the Custodian's effecting an appropriate entry in its books and
records.
12. "Money Market Security" shall be deemed to include, without limitation,
certain Reverse Repurchase Agreements, debt obligations issued or
guaranteed as to interest and principal by the government of the United
States or agencies or instrumentalities thereof, any tax, bond or
revenue anticipation note issued by any state or municipal government or
public authority, commercial paper, certificates of deposit and bankers'
acceptances, repurchase agreements with respect to the same and bank
time deposits, and such other instruments and agreements where the
purchase and sale of such securities and instruments normally requires
settlement in federal funds on the same day as such purchase or sale.
13. "O.C.C." shall mean the Options Clearing Corporation, a clearing agency
registered under Section17A of the Securities Exchange Act of 1934, its
successor or successors, and its nominee or nominees.
14. "Officers" shall be deemed to include the President, any Vice President,
the Secretary, the Treasurer, the Controller, any Assistant Secretary,
any Assistant Treasurer, and any other person or persons, whether or not
any such other person is an officer of the Corporation, duly authorized
by the Board of Directors of the Corporation to execute any Proper
Instruction, instruction, notice or other instrument on behalf of the
Corporation and listed in the Authorized and Proper Instructions annexed
hereto as Appendix A or such other Proper Instruction as may be received
by the Custodian from time to time.
15. "Option" shall mean a Call Option, Covered Call Option, Stock Index
Option and/or a Put Option.
16. "Proper Instruction" shall mean any oral or written notice, instruction,
or other instrument, authorized or required by this Agreement to be
given to the Custodian which is actually received by the Custodian and,
authorized on behalf of the Corporation by the kind and number of
Officers designated in the Corporation's Authorized and Proper
Instructions, and the term Proper Instruction shall also include
instructions by the Corporation to the Custodian communicated by a
Terminal Link.
17. "Put Option" shall mean an exchange traded option with respect to
Securities other than Stock Index Options, Futures Contracts, and
Futures Contract Options entitling the holder, upon timely exercise and
tender of the specified underlying Securities, to sell such Securities
to the writer thereof for the exercise price.
18. "Reverse Repurchase Agreement" shall mean an agreement pursuant to which
the Corporation sells Securities and agrees to repurchase such
Securities at a described or specified date and price.
19. "Security" shall be deemed to include, without limitation, Money Market
Securities, Derivatives, Call Options, Put Options, Stock Index Options,
Stock Index Futures Contracts, Stock Index Futures Contract Options,
Financial Futures Contracts, Financial Futures Contract Options, Reverse
Repurchase Agreements, common stocks and other securities having
characteristics similar to common stocks, preferred stocks, debt
obligations issued by state or municipal governments and by public
authorities, (including, without limitation, general obligation bonds,
revenue bonds, industrial bonds and industrial development bonds),
asset-backed securities and obligations, bonds, debentures, notes,
mortgages or other obligations, and any combination of any of the
foregoing to create "synthetic" securities or
otherwise and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for the
same, or evidencing or representing any other rights or interest
therein, or any property or assets.
20. "Series" shall mean the various portfolios, if any, of the Corporation
as described from time to time in the current and effective prospectus
for the Corporation.
21. "Shares" shall mean the shares of capital stock of the Corporation, each
of which is, in the case of a Corporation having Series, allocated to a
particular Series.
22. "Stock Index Futures Contract" shall mean a bilateral agreement pursuant
to which the parties agree to take or make delivery of an amount of cash
equal to a specified dollar amount times the difference between the
value of a particular stock index at the close of the last business day
of the contract and the price at which the futures contract is
originally struck.
23. "Stock Index Option" shall mean an exchange traded option entitling the
holder, upon timely exercise, to receive an amount of cash determined by
reference to the difference between the exercise price and the value of
the index on the date of exercise.
24. "Terminal Link" shall mean an electronic data transmission link between
the Corporation and the Custodian requiring in connection with each use
of the Terminal Link by or on behalf of the Corporation use of an
authorization code provided by the Custodian and at least two access
codes established by the Corporation.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Corporation hereby constitutes and appoints the Custodian as
custodian of the Securities and moneys at any time owned by the
Corporation during the period of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and agrees to
perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, the Corporation will deliver or cause to be delivered to
the Custodian all Securities and all moneys owned by it, at any time
during the period of this Agreement, and shall specify with respect to
such Securities and money the Series to which the same are specifically
allocated. The Custodian shall segregate, keep and maintain the assets
of each Series separate and apart from the other Series and from the
Custodian's own assets and assets it holds for others, regardless
of capacity, and shall maintain books and records adequate to reflect
the ownership of Securities and moneys held hereunder. The Custodian
will not be responsible for any Securities and moneys not actually
received by it. The Custodian will be entitled to reverse any credits
made to the Corporation's cash balance on the Corporation's behalf where
such credits have been previously made and moneys are not finally
collected. The Corporation shall deliver to the Custodian a certified
resolution of the Board of Directors of the Corporation, substantially
in the form of Exhibit A hereto, approving, authorizing and instructing
the Custodian on a continuous and on-going basis to deposit in the
Book-Entry System all Securities eligible for deposit therein,
regardless of the Series to which the same are specifically allocated
and to utilize the Book-Entry System to the extent possible in
connection with its performance hereunder, including, without
limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities and deliveries and returns of Securities
collateral. Prior to a deposit of Securities specifically allocated to
a Series in the Depository, the Corporation shall deliver to the
Custodian a certified resolution of the Board of Directors of the
Corporation, substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and ongoing
basis until instructed to the contrary by a Proper Instruction actually
received by the Custodian to deposit in the Depository all Securities
specifically allocated to such Series eligible for deposit therein, and
to utilize the Depository to the extent possible with respect to such
Securities in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and
sales of Securities, loans of Securities, and deliveries and returns of
Securities collateral. Securities and moneys deposited in either the
Book-Entry System or the Depository will be represented in accounts
which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian acts in a
fiduciary or representative capacity and will be specifically allocated
on the Custodian's books to the separate account for the applicable
Series. Recognizing that only a confirmation and not an actual security
is received when dealing with Options and Derivatives, prior to the
Custodian's accepting, utilizing and acting with respect to Clearing
Member confirmations for Options and Derivatives and transactions in
Options and Derivatives for a Series as provided in this Agreement, the
Custodian shall have received a Proper Instruction, substantially in the
form of Exhibit C hereto, approving, authorizing and instructing the
Custodian on a continuous and on-going basis, until instructed to the
contrary by a Proper Instruction actually received by the Custodian, to
accept, utilize and act in accordance with such confirmations as
provided in this Agreement with respect to such Series.
2. The Custodian shall establish and maintain separate accounts, in the
name of each Series, and shall credit to the separate account for each
Series all moneys received by it for the account of the Corporation with
respect to such Series. Money credited to a separate account for a
Series shall be disbursed by the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Proper Instructions setting forth the name and address
of the person to whom the payment is to be made, the Series account
from which payment is to be made and the purpose for which payment
is to be made; or
(c) In payment of the fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Series upon
invoice and instruction to pay.
3. Promptly after the close of business on each day, the Custodian shall
furnish the Corporation with confirmations and a summary, on a per
Series basis, of all transfers to or from the account of the Corporation
for a Series during said day, either hereunder or with any co-custodian
or sub-custodian appointed in accordance with this Agreement. Where
Securities are transferred to the account of the Corporation for a
Series, the Custodian shall also by book-entry or otherwise identify as
belonging to such Series a quantity of Securities in a fungible bulk of
Securities registered in the name of the Custodian (or its nominee) as
Custodian for the Corporation or shown on the Custodian's account on the
books of the Book-Entry System or the Depository. At least monthly and
from time to time, the Custodian shall furnish the Corporation with a
detailed statement, on a per Series basis, of the Securities and moneys
held by the Custodian for the Corporation.
4. Except as otherwise provided in paragraph 7 of this Article and in
Article VIII, all Securities held by the Custodian hereunder, which are
issued or issuable only in bearer form, except such Securities as are
held in the Book-Entry System, shall be held by the Custodian in that
form; all other Securities held hereunder may be registered in the name
of the Corporation or its nominee, in the name of any duly appointed
registered nominee of the Custodian, as Custodian for the Corporation,
as the Custodian may from time to time determine, or in the name of the
Book-Entry System or the Depository or their successor or successors, or
their nominee or nominees. The Corporation agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or the
Depository any Securities which it may hold hereunder and which may from
time to time be registered in the name of the Corporation or its
nominee. The Custodian shall hold all such Securities specifically
allocated to a Series which are not held in the Book-Entry System or in
the Depository in a separate account in the name of such Series
physically segregated at all times from those of any other person or
persons.
5. Except as otherwise provided in this Agreement and unless otherwise
instructed to the contrary by a Proper Instruction, the Custodian by
itself, or through the use of the Book-Entry System or the Depository
with respect to Securities held hereunder and therein deposited, shall
with respect to all Securities held for the Corporation hereunder in
accordance with preceding paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon such
Securities which are called, but only if either (i) the Custodian
receives a written notice of such call, or (ii) notice of such call
appears in one or more of the publications listed in Appendix B
annexed hereto, which may be amended at any time by the Custodian
without the prior notification or consent of the Corporation,
although the Custodian will give the Corporation notice as soon as
practical;
(c) Present for payment and collect the amount payable upon all
Securities which mature;
(d) Surrender Securities in temporary form for definitive Securities;
(e) Execute, as custodian, any necessary declarations or certificates
of ownership under the Federal Income Tax Laws or the laws or
regulations of any other taxing authority now or hereafter in
effect; and
(f) Hold directly, or through the Book-Entry System or the Depository
with respect to Securities therein deposited, for the account of a
Series, all rights and similar securities issued with respect to
any Securities held by the Custodian for such Series hereunder.
6. Upon receipt of a Proper Instruction and not otherwise, the Custodian,
directly or through the use of the Book-Entry System or the Depository,
shall:
(a) Execute and deliver to such persons as may be designated in such
Proper Instruction proxies, consents, authorizations, and any other
instruments whereby the authority of the Corporation as owner of
any Securities held by the Custodian hereunder for the Series
specified in such Proper Instruction may be exercised;
(b) Deliver any Securities held by the Custodian hereunder for the
Series specified in such Proper Instruction in exchange for other
Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any
conversion privilege and receive and hold hereunder specifically
allocated to such Series any cash or other Securities received in
exchange;
(c) Deliver any Securities held by the Custodian hereunder for the
Series specified in such Proper Instruction to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive
and hold hereunder specifically allocated to such Series such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Series
specified in such Proper Instruction, and take such other steps as
shall be stated in such Proper Instruction to be for the purpose of
effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Corporation; and
(e) Present for payment and collect the amount payable upon Securities
not described in preceding paragraph 5(b) of this Article which may
be called as specified in the Proper Instruction.
7. Notwithstanding any provision elsewhere contained herein, the Custodian
shall not be required to obtain possession of any instrument or
certificate representing any Derivative, Futures Contract, any Option,
or any Futures Contract Option until after it shall have determined, or
shall have received a Proper Instruction from the Corporation stating,
that any such instruments or certificates are available. The
Corporation shall deliver to the Custodian such a Proper Instruction no
later than the business day preceding the availability of any such
instrument or certificate. Prior to such availability, the Custodian
shall comply with Section 17(f) of the Investment Company Act of 1940,
as amended, in connection with the purchase, sale, settlement, closing
out or writing of Derivatives, Futures Contracts, Options, or Futures
Contract Options by making payments or deliveries specified in Proper
Instructions received by the Custodian in connection with any such
purchase, sale, writing, settlement or closing out upon its receipt from
a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by the Custodian to be in the form
customarily used by brokers, dealers, or future commission merchants
with respect to such Derivatives, Futures Contracts, Options, or Futures
Contract Options, as the case may be, confirming that such Security is
held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of the Custodian (or any
nominee of the Custodian) as custodian for the Corporation, provided,
however, that notwithstanding the foregoing, payments to or deliveries
from the Margin Account, and payments with respect to Securities to
which a Margin Account relates, shall be made in accordance with the
terms and conditions of the Margin Account Agreement. Whenever any such
instruments or certificates are available, the Custodian shall,
notwithstanding any provision in this Agreement to the contrary, make
payment for any Derivative, Futures Contract, Option, or Futures
Contract Option for which such instruments or such certificates are
available only against the delivery to the Custodian of such instrument
or such certificate, and deliver any Derivative, Futures Contract,
Option or Futures Contract Option for which such instruments or such
certificates are available only against receipt by the Custodian of
payment therefor. Any such instrument or certificate delivered to the
Custodian shall be held by the Custodian hereunder in accordance with,
and subject to, the provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Corporation, other
than a purchase of an Option, a Futures Contract, or a Futures Contract
Option, the Corporation shall deliver to the Custodian (a) the Series to
which such Securities are to be specifically allocated; (b) the name of
the issuer and the title of the Securities; (c) the number of shares or
the principal amount purchased and accrued interest, if any; (d) the
date of purchase and settlement; (e) the purchase price per unit; (f)
the total amount payable upon such purchase; (g) the name of the person
from whom or the broker through whom the purchase was made, and the name
of the clearing broker, if any; and (h) the name of the broker to whom
payment is to be made. The Custodian shall, upon receipt of Securities
purchased by or for the Corporation, pay to the broker specified in the
Proper Instruction out of the moneys held for the account of such Series
the total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such Proper
Instruction.
2. Promptly after each sale of Securities by the Corporation, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any
Reverse Repurchase Agreement, the Corporation shall deliver to the
Custodian (a) the Series to which such Securities were specifically
allocated; (b) the name of the issuer and the title of the Security; (c)
the number of shares or principal amount sold, and accrued interest, if
any; (d) the date of sale; (e) the sale price per unit; (f) the total
amount payable to the Corporation upon such sale; (g) the name of the
broker through whom or the person to whom the sale was made, and the
name of the clearing broker, if any; and (h) the name of the broker to
whom the Securities are to be delivered. The Custodian shall deliver
the Securities specifically allocated to such Series to the broker
specified in the Proper Instruction against payment of the total amount
payable to the Corporation upon such sale, provided that the same
conforms to the total amount payable as set forth in such Proper
Instruction.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the Corporation, the
Corporation shall deliver to the Custodian a Proper Instruction
specifying with respect to each Option purchased: (a) the Series to
which such Option is specifically allocated; (b) the type of Option (put
or call); (c) the name of the issuer and the title and number of shares
subject to such Option or, in the case of a Stock Index Option, the
stock index to which such Option relates and the number of Stock Index
Options purchased; (d) the expiration date; (e) the exercise price; (f)
the dates of purchase and settlement; (g) the total amount payable by
the Corporation in connection with such purchase; (h) the name of the
Clearing Member through whom such Option was purchased; and (i) the name
of the broker to whom payment is to be made. The Custodian shall pay,
upon receipt of a Clearing Member's statement confirming the purchase of
such Option held by such Clearing Member for the account of the
Custodian (or any duly appointed and registered nominee of the
Custodian) as custodian for the Corporation, out of moneys held for the
account of the Series to which such Option is to be specifically
allocated, the total amount payable upon such purchase to the Clearing
Member through whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in such Proper
Instruction.
2. Promptly after the sale of any Option purchased by the Corporation
pursuant to paragraph 1 hereof, the Corporation shall deliver to the
Custodian a Proper Instruction specifying with respect to each such
sale: (a) the Series to which such Option was specifically allocated;
(b) the type of Option (put or call); (c) the name of the issuer and the
title and number of shares subject to such Option or, in the case of a
Stock Index Option, the stock index to which such Option relates and the
number of Stock Index Options sold; (d) the date of sale; (e) the sale
price; (f) the date of settlement; (g) the total amount payable to the
Corporation upon such sale; and (h) the name of the Clearing Member
through whom the sale was made. The Custodian shall consent to the
delivery of the Option sold by the Clearing Member which previously
supplied the confirmation described in preceding paragraph 1 of this
Article with
respect to such Option against payment to the Custodian of the total
amount payable to the Corporation, provided that the same conforms to
the total amount payable as set forth in such Proper Instruction.
3. Promptly after the exercise by the Corporation of any Call Option
purchased by the Corporation pursuant to paragraph 1 hereof, the
Corporation shall deliver to the Custodian a Proper Instruction
specifying with respect to such Call Option: (a) the Series to which
such Call Option was specifically allocated; (b) the name of the issuer
and the title and number of shares subject to the Call Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid by the
Corporation upon such exercise; and (g) the name of the Clearing Member
through whom such Call Option was exercised. The Custodian shall, upon
receipt of the Securities underlying the Call Option which was
exercised, pay out of the moneys held for the account of the Series to
which such Call Option was specifically allocated the total amount
payable to the Clearing Member through whom the Call Option was
exercised, provided that the same conforms to the total amount payable
as set forth in such Proper Instruction.
4. Promptly after the exercise by the Corporation of any Put Option
purchased by the Corporation pursuant to paragraph 1 hereof, the
Corporation shall deliver to the Custodian a Proper Instruction
specifying with respect to such Put Option: (a) the Series to which such
Put Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid to the
Corporation upon such exercise; and (g) the name of the Clearing Member
through whom such Put Option was exercised. The Custodian shall, upon
receipt of the amount payable upon the exercise of the Put Option,
deliver or direct the Depository to deliver the Securities specifically
allocated to such Series, provided the same conforms to the amount
payable to the Corporation as set forth in such Proper Instruction.
5. Promptly after the exercise by the Corporation of any Stock Index Option
purchased by the Corporation pursuant to paragraph 1 hereof, the
Corporation shall deliver to the Custodian a Proper Instruction
specifying with respect to such Stock Index Option: (a) the Series to
which such Stock Index Option was specifically allocated; (b) the type
of Stock Index Option (put or call); (c) the number of Options being
exercised; (d) the stock index to which such Option relates; (e) the
expiration date; (f) the exercise price; (g) the total amount to be
received by the Corporation in connection with such exercise; and (h)
the Clearing Member from whom such payment is to be received. The
Custodian shall remove such Stock Index Option from the Corporation's
listing of assets and credit the Corporation's cash account timely upon
receipt of such amount by the Custodian.
6. Whenever the Corporation writes a Covered Call Option, the Corporation
shall promptly deliver to the Custodian a Proper Instruction specifying
with respect to such Covered Call Option: (a) the Series for which such
Covered Call Option was written; (b) the name of the issuer and the
title and number of shares for which the Covered Call Option was written
and which underlie the same; (c) the expiration date; (d) the exercise
price; (e) the premium to be received by the Corporation; (f) the date
such Covered Call Option was written; and (g) the
name of the Clearing Member through whom the premium is to be received.
The Custodian shall deliver or cause to be delivered, in exchange for
receipt of the premium specified in the Proper Instruction with respect
to such Covered Call Option, such receipts as are required in accordance
with the customs prevailing among Clearing Members dealing in Covered
Call Options and shall impose, or direct the Depository to impose, upon
the underlying Securities specified in the Proper Instruction
specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the Custodian
has the right, upon prior written notification to the Corporation and in
order to maintain compliance with O.C.C. Rules limiting the amount of
receipts a bank can issue in relation to its capital, at any time to
refuse to issue any receipts for Securities in the possession of the
Custodian and not deposited with the Depository underlying a Covered
Call Option.
7. Whenever a Covered Call Option written by the Corporation and described
in the preceding paragraph of this Article is exercised, the Corporation
shall promptly deliver to the Custodian a Proper Instruction instructing
the Custodian to deliver, or to direct the Depository to deliver, the
Securities subject to such Covered Call Option and specifying: (a) the
Series for which such Covered Call Option was written; (b) the name of
the issuer and the title and number of shares subject to the Covered
Call Option; (c) the Clearing Member to whom the underlying Securities
are to be delivered; and (d) the total amount payable to the Corporation
upon such delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian shall
deliver, or direct the Depository to deliver, the underlying Securities
as specified in the Proper Instruction against payment of the amount to
be received as set forth in such Proper Instruction.
8. Whenever the Corporation writes a Put Option, the Corporation shall
promptly deliver to the Custodian a Proper Instruction specifying with
respect to such Put Option: (a) the Series for which such Put Option was
written; (b) the name of the issuer and the title and number of shares
for which the Put Option is written and which underlie the same; (c) the
expiration date; (d) the exercise price; (e) the premium to be received
by the Corporation; (f) the date such Put Option is written; (g) the
name of the Clearing Member through whom the premium is to be received
and to whom a Put Option guarantee letter is to be delivered; (h) the
amount of cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the Senior
Security Account for such Series; and (i) the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to
be deposited into the Collateral Account for such Series. The Custodian
shall, after making the deposits into the Collateral Account specified
in the Proper Instruction, issue a Put Option guarantee letter
substantially in the form utilized by the Custodian on the date hereof,
and deliver the same to the Clearing Member specified in the Proper
Instruction against receipt of the premium specified in said Proper
Instruction. Notwithstanding the foregoing, the Custodian shall be
under no obligation to issue any Put Option guarantee letter or similar
document if it is unable to make any of the representations contained
therein.
9. Whenever a Put Option written by the Corporation and described in the
preceding paragraph is exercised, the Corporation shall promptly deliver
to the Custodian a Proper Instruction specifying: (a) the Series to
which such Put Option was written; (b) the name of the issuer and title
and number of shares subject to the Put Option; (c) the Clearing Member
from whom the
underlying Securities are to be received; (d) the total amount payable
by the Corporation upon such delivery; (e) the amount of cash and/or the
amount and kind of Securities specifically allocated to such Series to
be withdrawn from the Collateral Account for such Series and (f) the
amount of cash and/or the amount and kind of Securities, specifically
allocated to such Series, if any, to be withdrawn from the Senior
Security Account. Upon the return and/or cancellation of any Put Option
guarantee letter or similar document issued by the Custodian in
connection with such Put Option, the Custodian shall pay out of the
moneys held for the account of the Series to which such Put Option was
specifically allocated the total amount payable to the Clearing Member
specified in the Proper Instruction as set forth in such Proper
Instruction against delivery of such Securities, and shall make the
withdrawals specified in such Proper Instruction.
10. Whenever the Corporation writes a Stock Index Option, the Corporation
shall promptly deliver to the Custodian a Proper Instruction specifying
with respect to such Stock Index Option: (a) the Series for which such
Stock Index Option was written; (b) whether such Stock Index Option is a
put or a call; (c) the number of options written; (d) the stock index to
which such Option relates; (e) the expiration date; (f) the exercise
price; (g) the Clearing Member through whom such Option was written; (h)
the premium to be received by the Corporation; (i) the amount of cash
and/or the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in the Collateral Account for such
Series; and (j) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be
deposited in a Margin Account, and the name in which such account is to
be or has been established. The Custodian shall, upon receipt of the
premium specified in the Proper Instruction, make the deposits, if any,
into the Collateral Account specified in the Proper Instruction, and
either (1) deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with the customs
prevailing among Clearing Members in Stock Index Options and make the
deposits into the Collateral Account specified in the Proper
Instruction, or (2) make the deposits into the Margin Account specified
in the Proper Instruction.
11. Whenever a Stock Index Option written by the Corporation and described
in the preceding paragraph of this Article is exercised, the Corporation
shall promptly deliver to the Custodian a Proper Instruction specifying
with respect to such Stock Index Option: (a) the Series for which such
Stock Index Option was written; (b) such information as may be necessary
to identify the Stock Index Option being exercised; (c) the Clearing
Member through whom such Stock Index Option is being exercised; (d) the
total amount payable upon such exercise, and whether such amount is to
be paid by or to the Corporation; (e) the amount of cash and/or amount
and kind of Securities, if any, to be withdrawn from the Margin Account;
and (f) the amount of cash and/or amount and kind of Securities, if any,
to be withdrawn from the Collateral Account for such Series. Upon the
return and/or cancellation of the receipt, if any, delivered pursuant to
the preceding paragraph of this Article, the Custodian shall pay out of
the moneys held for the account of the Series to which such Stock Index
Option was specifically allocated to the Clearing Member specified in
the Proper Instruction the total amount payable, if any, as specified
therein.
12. Whenever the Corporation purchases any Option identical to a previously
written Option described in paragraphs, 6, 8 or 10 of this Article in a
transaction expressly designated by the Corporation's adviser as
a"'Closing Purchase Transaction" in order to liquidate its position as a
writer of an Option, the Corporation shall promptly deliver to the
Custodian a Proper Instruction specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the Series for which the Option was written; (c) the
name of the issuer and the title and number of shares subject to the
Option, or, in the case of a Stock Index Option, the stock index to
which such Option relates and the number of Options held; (d) the
exercise price; (e) the premium to be paid by the Corporation; (f) the
expiration date; (g) the type of Option (put or call); (h) the date of
such purchase; (i) the name of the Clearing Member to whom the premium
is to be paid; and (j) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account, or a
specified Margin Account, for such Series. Upon the Custodian's payment
of the premium and the return and/or cancellation of any receipt issued
pursuant to paragraphs 6, 8 or 10 of this Article with respect to the
Option being liquidated through the Closing Purchase Transaction, the
Custodian shall remove, or direct the Depository to remove, the
previously imposed restrictions on the Securities underlying the Call
Option.
13. Upon the expiration, exercise or consummation of a Closing Purchase
Transaction with respect to any Option purchased or written by the
Corporation and described in this Article, the Custodian shall delete
such Option from the statements delivered to the Corporation pursuant to
paragraph 3 Article III herein, and upon the return and/or cancellation
of any receipts issued by the Custodian, shall make such withdrawals
from the Collateral Account, and the Margin Account as may be specified
in a Proper Instruction received in connection with such expiration,
exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Corporation shall enter into a Futures Contract, the
Corporation shall deliver to the Custodian a Proper Instruction
specifying with respect to such Futures Contract, (or with respect to
any number of identical Futures Contract(s)): (a) the Series for which
the Futures Contract is being entered; (b) the category of Futures
Contract (the name of the underlying stock index or financial
instrument); (c) the number of identical Futures Contracts entered into;
(d) the delivery or settlement date of the Futures Contract(s); (e) the
date the Futures Contract(s) was (were) entered into and the maturity
date; (f) whether the Corporation is buying (going long) or selling
(going short) on such Futures Contract(s); (g) the amount of cash and/or
the amount and kind of Securities, if any, to be deposited in the
Collateral Account for such Series; (h) the name of the broker, dealer,
or futures commission merchant through whom the Futures Contract was
entered into; and (i) the amount of fee or commission, if any, to be
paid and the name of the broker, dealer, or futures commission merchant
to whom such amount is to be paid. The Custodian shall make the
deposits, if any, to the Margin Account in accordance with the terms and
conditions of the Margin Account Agreement. The Custodian shall make
payment out of the moneys specifically allocated to
such Series of the fee or commission, if any, specified in the Proper
Instruction and deposit in the Collateral Account for such Series the
amount of cash and/or the amount and kind of Securities specified in
said Proper Instruction.
2. (a) Any variation margin payment or similar payment required to be made
by the Corporation to a broker, dealer, or futures commission
merchant with respect to an outstanding Futures Contract, shall be
made by the Custodian in accordance with the terms and conditions
of the Margin Account Agreement.
(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Corporation with
respect to an outstanding Futures Contract, shall be received and
dealt with by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian hereunder is retained
by the Corporation until delivery or settlement is made on such Futures
Contract, the Corporation shall deliver to the Custodian a Proper
Instruction specifying: (a) the Futures Contract and the Series to which
the same relates; (b) with respect to a Stock Index Futures Contract,
the total cash settlement amount to be paid or received, and with
respect to a Financial Futures Contract, the Securities and/or amount of
cash to be delivered or received; (c) the broker, dealer, or futures
commission merchant to or from whom payment or delivery is to be made or
received; and (d) the amount of cash and/or Securities to be withdrawn
from the Collateral Account for such Series. The Custodian shall make
the payment or delivery specified in the Proper Instruction, and delete
such Futures Contract from the statements delivered to the Corporation
pursuant to paragraph 3 of Article III herein.
4. Whenever the Corporation shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Corporation shall
deliver to the Custodian a Proper Instruction specifying: (a) the items
of information required in a Proper Instruction described in paragraph 1
of this Article, and (b) the Futures Contract being offset. The
Custodian shall make payment out of the money specifically allocated to
such Series of the fee or commission, if any, specified in the Proper
Instruction and delete the Futures Contract being offset from the
statements delivered to the Corporation pursuant to paragraph 3 of
Article III herein, and make such withdrawals from the Senior Security
Account for such Series as may be specified in such Proper Instruction.
The withdrawals, if any, to be made from the Margin Account shall be
made by the Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract Option by the
Corporation, the Corporation shall promptly deliver to the Custodian a
Proper Instruction specifying with respect to such Futures Contract
Option: (a) the Series to which such Option is specifically
allocated; (b) the type of Futures Contract Option (put or call); (c)
the type of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Contract Option purchased; (d) the expiration date; (e) the exercise
price; (f) the dates of purchase and settlement; (g) the amount of
premium to be paid by the Corporation upon such purchase; (h) the name
of the broker or futures commission merchant through whom such option
was purchased; and (i) the name of the broker, or futures commission
merchant, to whom payment is to be made. The Custodian shall pay out of
the moneys specifically allocated to such Series, the total amount to be
paid upon such purchase to the broker or futures commissions merchant
through whom the purchase was made, provided that the same conforms to
the amount set forth in such Proper Instruction.
2. Promptly after the sale of any Futures Contract Option purchased by the
Corporation pursuant to paragraph 1 hereof, the Corporation shall
promptly deliver to the Custodian a Proper Instruction specifying with
respect to each such sale: (a) Series to which such Futures Contract
Option was specifically allocated; (b) the type of Future Contract
Option (put or call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option; (d) the date of sale; (e) the
sale price; (f) the date of settlement; (g) the total amount payable to
the Corporation upon such sale; and (h) the name of the broker of
futures commission merchant through whom the sale was made. The
Custodian shall consent to the cancellation of the Futures Contract
Option being closed against payment to the Custodian of the total amount
payable to the Corporation, provided the same conforms to the total
amount payable as set forth in such Proper Instruction.
3. Whenever a Futures Contract Option purchased by the Corporation pursuant
to paragraph 1 is exercised by the Corporation, the Corporation shall
promptly deliver to the Custodian a Proper Instruction specifying: (a)
the Series to which such Futures Contract Option was specifically
allocated; (b) the particular Futures Contract Option (put or call)
being exercised; (c) the type of Futures Contract underlying the Futures
Contract Option; (d) the date of exercise; (e) the name of the broker or
futures commission merchant through whom the Futures Contract Option is
exercised; (f) the net total amount, if any, payable by the Corporation;
(g) the amount, if any, to be received by the Corporation; and (h) the
amount of cash and/or the amount and kind of Securities to be deposited
in the Collateral Account for such Series. The Custodian shall make,
out of the moneys and Securities specifically allocated to such Series,
the payments, if any, and the deposits, if any, into the Collateral
Accounts specified in the Proper Instruction. The deposits, if any, to
be made to the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
4. Whenever the Corporation writes a Futures Contract Option, the
Corporation shall promptly deliver to the Custodian a Proper Instruction
specifying with respect to such Futures Contract Option: (a) the Series
for which such Futures Contract Option was written; (b) the type of
Futures Contract Option (put or call); (c) the type of Futures Contract
and such other information as may be necessary to identify the Futures
Contract underlying the Futures Contract Option; (d) the expiration
date; (e) the exercise price; (f) the premium to be received by the
Corporation; (g) the name of the broker or futures commission merchant
through whom the premium is to be received; and (h) the amount of cash
and/or the amount and kind of
Securities, if any, to be deposited in the Collateral Account for such
Series. The Custodian shall, upon receipt of the premium specified in
the Proper Instruction, make out of the moneys and Securities
specifically allocated to such Series the deposits into the Collateral
Account, if any, as specified in the Proper Instruction. The deposits,
if any, to be made to the Margin Account shall be made by the Custodian
in accordance with the terms and conditions of the Margin Account
Agreement.
5. Whenever a Futures Contract Option written by the Corporation which is a
call is exercised, the Corporation shall promptly deliver to the
Custodian a Proper Instruction specifying: (a) the Series to which such
Futures Contract Option was specifically allocated; (b) the particular
Futures Contract Option exercised; (c) the type of Futures Contract
underlying the Futures Contract Option; (d) the name of the broker or
futures commission merchant through whom such Futures Contract Option
was exercised; (e) the net total amount, if any, payable to the
Corporation upon such exercise; (f) the net total amount, if any,
payable by the Corporation upon such exercise; and (g) the amount of
cash and/or the amount and kind of Securities to be deposited in the
Collateral Account for such Series. The Custodian shall, upon its
receipt of the net total amount payable to the Corporation, if any,
specified in such Proper Instruction make the payments, if any, and the
deposits, if any, into the Senior Security Account as specified in the
Proper Instruction. The deposits, if any, to be made to the Margin
Account shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written by the Corporation
and which is a put is exercised, the Corporation shall promptly deliver
to the Custodian a Proper Instruction specifying: (a) the Series to
which such Option was specifically allocated; (b) the particular Futures
Contract Option exercised; (c) the type of Futures Contract underlying
such Futures Contract Option; (d) the name of the broker or futures
commission merchant through whom such Futures Contract Option is
exercised; (e) the net total amount, if any, payable to the Corporation
upon such exercise; (f) the net total amount, if any, payable by the
Corporation upon such exercise; and (g) the amount and kind of
Securities and/or cash to be withdrawn from or deposited in, the
Collateral Account for such Series, if any. The Custodian shall, upon
its receipt of the net total amount payable to the Corporation, if any,
specified in the Proper Instruction, make out of the moneys and
Securities specifically allocated to such Series, the payments, if any,
and the deposits, if any, into the Senior Security Account as specified
in the Proper Instruction. The deposits to and/or withdrawals from the
Margin Account, if any, shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
7. Whenever the Corporation purchases any Futures Contract Option identical
to a previously written Futures Contract Option described in this
Article in order to liquidate its position as a writer of such Futures
Contract Option, the Corporation shall promptly deliver to the Custodian
a Proper Instruction specifying with respect to the Futures Contract
Option being purchased: (a) the Series to which such Option is
specifically allocated; (b) that the transaction is a closing
transaction; (c) the type of Future Contract and such other information
as may be necessary to identify the Futures Contract underlying the
Futures Option Contract; (d) the exercise price; (e) the premium to be
paid by the Corporation; (f) the expiration date; (g) the
name of the broker or futures commission merchant to whom the premium is
to be paid; and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account for such
Series. The Custodian shall effect the withdrawals from the Collateral
Account specified in the Proper Instruction. The withdrawals, if any,
to be made from the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
8. Upon the expiration, exercise, or consummation of a closing transaction
with respect to, any Futures Contract Option written or purchased by the
Corporation and described in this Article, the Custodian shall (a)
delete such Futures Contract Option from the statements delivered to the
Corporation pursuant to paragraph 3 of Article III herein and, (b) make
such withdrawals from and/or in the case of an exercise such deposits
into the Collateral Account as may be specified in a Proper Instruction.
The deposits to and/or withdrawals from the Margin Account, if any,
shall be made by the Custodian in accordance with the terms and
conditions of the Margin Account Agreement.
9. Futures Contracts acquired by the Corporation through the exercise of a
Futures Contract Option described in this Article shall be subject to
Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the Corporation, the
Corporation shall promptly deliver to the Custodian a Proper Instruction
specifying: (a) the Series for which such short sale was made; (b) the
name of the issuer and the title of the Security; (c) the number of
shares or principal amount sold, and accrued interest or dividends, if
any; (d) the dates of the sale and settlement; (e) the sale price per
unit; (f) the total amount credited to the Corporation upon such sale,
if any, (g) the amount of cash and/or the amount and kind of Securities,
if any, which are to be deposited in a Margin Account and the name in
which such Margin Account has been or is to be established; (h) the
amount of cash and/or the amount and kind of Securities, if any, to be
deposited in a Collateral Account, and (i) the name of the broker
through whom such short sale was made. The Custodian shall upon its
receipt of a statement from such broker confirming such sale and that
the total amount credited to the Corporation upon such sale, if any, as
specified in the Proper Instruction is held by such broker for the
account of the Custodian (or any nominee of the Custodian) as custodian
of the Corporation, issue a receipt or make the deposits into the Margin
Account and the Collateral Account specified in the Proper Instruction.
2. In connection with the closing-out of any short sale, the Corporation
shall promptly deliver to the Custodian a Proper Instruction specifying
with respect to each such closing out: (a) the Series for which such
transaction is being made; (b) the name of the issuer and the title of
the Security; (c) the number of shares or the principal amount, and
accrued interest or dividends, if any, required to effect such
closing-out to be delivered to the broker; (d) the dates of closing-out
and settlement; (e) the purchase price per unit; (f) the net total
amount payable to
the Corporation upon such closing-out; (g) the net total amount payable
to the broker upon such closing-out; (h) the amount of cash and the
amount and kind of Securities to be withdrawn, if any, from the Margin
Account; (i) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account; and (j)
the name of the broker through whom the Corporation is effecting such
closing-out. The Custodian shall, upon receipt of the net total amount
payable to the Corporation upon such closing-out, and the return and/or
cancellation of the receipts, if any, issued by the Custodian with
respect to the short sale being closed-out, pay out of the moneys held
for the account of the Corporation to the broker the net total amount
payable to the broker, and make the withdrawals from the Margin Account
and the Collateral Account, as the same are specified in the Proper
Instruction.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Corporation enters a Reverse Repurchase Agreement
with respect to Securities held by the Custodian hereunder, the
Corporation shall deliver to the Custodian a Proper Instruction, or in
the event such Reverse Repurchase Agreement is a Money Market Security,
a Proper Instruction specifying: (a) the Series for which the Reverse
Repurchase Agreement is entered; (b) the total amount payable to the
Corporation in connection with such Reverse Repurchase Agreement and
specifically allocated to such Series; (c) the names of the counterparty
and of the broker or dealer through or with whom the Reverse Repurchase
Agreement is entered; (d) the amount and kind of Securities to be
delivered by the Corporation to such broker or dealer; (e) the date of
such Reverse Repurchase Agreement; and (f) the amount of cash and/or the
amount and kind of Securities, if any, specifically allocated to such
Series to be deposited in a Senior Security Account for such Series in
connection with such Reverse Repurchase Agreement. The Custodian shall,
upon receipt of the total amount payable to the Corporation specified in
the Proper Instruction, make the delivery to the broker or dealer, and
the deposits, if any, to the Collateral Account, specified in such
Proper Instruction.
2. Upon the termination of a Reverse Repurchase Agreement described in
preceding paragraph 1 of this Article, the Corporation shall promptly
deliver a Proper Instruction or, in the event such Reverse Repurchase
Agreement is a Money Market Security, a Proper Instruction to the
Custodian specifying: (a) the Reverse Repurchase Agreement being
terminated and the Series for which same was entered; (b) the total
amount payable by the Corporation in connection with such termination;
(c) the amount and kind of Securities to be received by the Corporation
and specifically allocated to such Series in connection with such
termination; (d) the date of termination; (e) the names of the
counterparty and of the broker or dealer with or through whom the
Reverse Repurchase Agreement is to be terminated; and (f) the amount of
cash and/or the amount and kind of Securities to be withdrawn from the
Collateral Account for such Series. The Custodian shall, upon receipt
of the amount and kind of Securities to be received by the Corporation
specified in the Proper Instruction, make the payment to the
broker or dealer, and the withdrawals, if any, from the Collateral
Account, specified in such Proper Instruction.
ARTICLE X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities specifically allocated
to a Series held by the Custodian hereunder, the Corporation shall
deliver or cause to be delivered to the Custodian a Proper Instruction
specifying with respect to each such loan: (a) the Series to which the
loaned Securities are specifically allocated; (b) the name of the issuer
and the title of the Securities, (c) the number of shares or the
principal amount loaned, (d) the date of loan and delivery, (e) the
total amount to be delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the premium, if
any, separately identified, and (f) the name of the broker, dealer, or
financial institution to which the loan was made. The Custodian shall
deliver the Securities thus designated to the broker, dealer or
financial institution to which the loan was made upon receipt of the
total amount designated as to be delivered against the loan of
Securities. The Custodian may accept payment in connection with a
delivery otherwise than through the Book-Entry System or Depository only
in the form of a certified or bank cashier's check payable to the order
of the Corporation or the Custodian drawn on New York Clearing House
funds and may deliver Securities in accordance with the customs
prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by the
Corporation, the Corporation shall deliver or cause to be delivered to
the Custodian a Proper Instruction specifying with respect to each such
loan termination and return of Securities: (a) the Series to which the
loaned Securities are specifically allocated; (b) the name of the issuer
and the title of the Securities to be returned, (c) the number of shares
or the principal amount to be returned, (d) the date of termination, (e)
the total amount to be delivered by the Custodian (including the cash
collateral for such Securities minus any offsetting credits as described
in said Proper Instruction), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker, dealer,
or financial institution to which such Securities were loaned and upon
receipt thereof shall pay, out of the moneys held for the account of the
Corporation, the total amount payable upon such return of Securities as
set forth in the Proper Instruction.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall make deliveries or payments from a Margin Account to
the broker, dealer, futures commission merchant or Clearing Member in
whose name, or for whose benefit, the account was established as
specified in the Margin Account Agreement.
2. Amounts received by the Custodian as payments or distributions with
respect to Securities deposited in any Margin Account shall be dealt
with in accordance with the terms and conditions of the related Margin
Account Agreement.
3. The Custodian shall have a continuing lien and security interest in and
to any property at any time held by the Custodian in any Collateral
Account described herein. In accordance with applicable law, including
limitations under the 1940 Act and the Corporation's Prospectus, the
Custodian may enforce its lien and realize on any such property whenever
the Custodian has made payment or delivery pursuant to any Put Option
guarantee letter or similar document or any receipt issued hereunder by
the Custodian. In the event the Custodian should realize on any such
property net proceeds which are less than the Custodian's obligations
under any Put Option guarantee letter or similar document or any
receipt, such deficiency shall be a debt owed the Custodian by the
Corporation within the scope of Article XIV herein.
4. On each business day the Custodian shall furnish the Corporation with a
statement with respect to each Margin Account in which money or
Securities are held specifying as of the close of business on the
previous business day: (a) the name of the Margin Account; (b) the
amount and kind of Securities held therein; and (c) the amount of money
held therein. The Custodian shall make available upon request to any
broker, dealer, or futures commission merchant specified in the name of
a Margin Account a copy of the statement furnished the Corporation with
respect to such Margin Account.
5. Promptly after the close of business on each business day in which cash
and/or Securities are maintained in a Collateral Account for any Series,
the Custodian shall furnish the Corporation with a statement with
respect to such Collateral Account specifying the amount of cash and/or
the amount and kind of Securities held therein. No later than the close
of business next succeeding the delivery to the Corporation of such
statement, the Corporation shall furnish to the Custodian a Proper
Instruction or Written Instructions specifying the then market value of
the Securities described in such statement. In the event such then
market value is indicated to be less than the Custodian's obligation
with respect to any outstanding Put Option guarantee letter or similar
document, the Corporation shall promptly specify in a Proper Instruction
the additional cash and/or Securities to be deposited in such Collateral
Account to eliminate such deficiency.
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Corporation shall furnish to the Custodian a copy of the resolution
of the Board of Directors of the Corporation, certified by the Secretary
or any Assistant Secretary, either (i) setting forth with respect to the
Series specified therein the date of the declaration of a dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable
per Share of such Series to the shareholders of record as of that date
and the total amount payable to the Dividend Agent and any sub-dividend
agent or co-dividend agent of the Corporation on the payment date, or (ii)
authorizing with respect to the Series specified therein the declaration
of dividends and distributions on a daily basis and authorizing the
Custodian to rely on a Proper Instruction setting forth the date of the
declaration of such dividend or distribution, the date of payment
thereof, the record date as of which shareholders entitled to payment
shall be determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount payable to
the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution, Proper Instruction,
as the case may be, the Custodian shall pay out of the moneys held for
the account of each Series the total amount payable to the Dividend
Agent and any sub-dividend agent or co-dividend agent of the Corporation
with respect to such Series.
ARTICLE XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Corporation shall sell any Shares, it shall deliver to the
Custodian a Proper Instruction duly specifying the amount of money to be
received by the Custodian for the sale of such Shares and specifically
allocated to the separate account in the name of such Series.
2. Upon receipt of such money from the Transfer Agent, the Custodian shall
credit such money to the separate account in the name of the Series for
which such money was received.
3. Upon issuance of any Shares of any Series described in the foregoing
provisions of this Article, the Custodian shall pay, out of the money
held for the account of such Series, all original issue or other taxes
required to be paid by the Corporation in connection with such issuance
upon the receipt of a Proper Instruction specifying the amount to be
paid.
4. Except as provided hereinafter, whenever the Corporation desires the
Custodian to make payment out of the money held by the Custodian
hereunder in connection with a redemption of any Shares, it shall
furnish to the Custodian a Proper Instruction specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice setting forth the
Series and number of Shares received by the Transfer Agent for
redemption and that such Shares are in good form for redemption, the
Custodian shall make payment to the Transfer Agent or to another account
of the Corporation at the Custodian out of the moneys held in the
separate account in the name of the Series the total amount specified in
the Proper Instruction issued pursuant to the foregoing paragraph 4 of
this Article.
6. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check
redemption privilege which may from time to time
be offered by the Corporation, the Custodian, unless otherwise
instructed by a Proper Instruction, shall, upon receipt of an advice
from the Corporation or its agent setting forth that the redemption is
in good form for redemption in accordance with the check redemption
procedure, honor the check presented as part of such check redemption
privilege out of the moneys held in the separate account of the Series
of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion advance funds on behalf
of any Series which results in an overdraft because the moneys held by
the Custodian in the separate account for such Series shall be
insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a
Proper Instruction, or which results in an overdraft in the separate
account of such Series for some other reason, or if the Corporation is
for any other reason indebted to the Custodian with respect to a Series
(except a borrowing for investment or for temporary or emergency
purposes using Securities as collateral pursuant to a separate agreement
and subject to the provisions of paragraph 2 of this Article), such
overdraft or indebtedness shall be deemed to be a loan made by the
Custodian to the Corporation for such Series payable on demand and shall
bear interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to one-half
percent over Custodian's prime commercial lending rate, or
alternatively, such other rate, if any, as the Custodian and the
Corporation may agree to from time to time. In addition, the
Corporation hereby agrees that the Custodian shall have a continuing
lien and security interest in and to up to 5% of the net assets
specifically allocated to such Series, at any time held by it for the
benefit of such Series or in which the Corporation may have an interest
which is then in the Custodian's possession or control or in possession
or control of any third party acting in the Custodian's behalf. The
Corporation authorizes the Custodian, in its sole discretion, at any
time to charge any such overdraft or indebtedness together with interest
due thereon against any balance of account standing to such Series'
credit on the Custodian's books. In addition, the Corporation hereby
agrees that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party,
or which next succeeds a Business Day on which at the close of business
the Corporation had outstanding a Reverse Repurchase Agreement or such a
borrowing, it shall attempt prior to 9 a.m., New York City time, or as
soon as practicable, advise the Custodian, in writing, of each such
borrowing, shall specify the Series to which the same relates, and shall
not incur any indebtedness not so specified other than from the
Custodian.
2. The Corporation will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary
or emergency purposes using Securities held by the Custodian hereunder
as collateral for such borrowings, a notice or undertaking in the form
currently employed by any such bank setting forth the amount which such
bank will loan to the Corporation against delivery of a stated amount of
collateral. The Corporation shall promptly deliver to the Custodian a
Proper Instruction specifying with respect to each such borrowing:
(a) the Series to which such borrowing relates; (b) the name of the
bank, (c) the amount and terms of the borrowing, which may be set forth
by incorporating by reference an attached promissory note, duly endorsed
by the Corporation, or other loan agreement, (d) the time and date, if
known, on which the loan is to be entered into, (e) the date on which
the loan becomes due and payable, (f) the total amount payable to the
Corporation on the borrowing date, (g) the market value of Securities to
be delivered as collateral for such loan, including the name of the
issuer, the title and the number of shares or the principal amount of
any particular Securities, and (h) a statement specifying whether such
loan is for investment purposes or for temporary or emergency purposes
and that such loan is in conformance with the Investment Company Act of
1940 and the Corporation's prospectus. The Custodian shall deliver on
the borrowing date specified in a Proper Instruction the specified
collateral and the executed promissory note, if any, against delivery by
the lending bank of the total amount of the loan payable, provided that
the same conforms to the total amount payable as set forth in the Proper
Instruction. The Custodian may, at the option of the lending bank, keep
such collateral in its possession, but such collateral shall be subject
to all rights therein given the lending bank by virtue of any promissory
note or loan agreement. The Custodian shall deliver such Securities as
additional collateral as may be specified in a Proper Instruction to
collateralize further any transaction described in this paragraph. The
Corporation shall cause all Securities released from collateral status
to be returned directly to the Custodian, and the Custodian shall
receive from time to time such return of collateral as may be tendered
to it. In the event that the Corporation fails to specify in a Proper
Instruction the Series, the name of the issuer, the title and number of
shares or the principal amount of any particular Securities to be
delivered as collateral by the Custodian, the Custodian shall not be
under any obligation to deliver any Securities.
ARTICLE XV
TERMINAL LINK
1. At no time and under no circumstances shall the Corporation be obligated
to have or utilize the Terminal Link, and the provisions of this Article
shall apply if, but only if, the Corporation in its sole and absolute
discretion elects to utilize the Terminal Link to transmit Proper
Instructions to the Custodian.
2. The Terminal Link shall be utilized by the Corporation only for the
purpose of the Corporation providing Proper Instructions to the
Custodian with respect to transactions involving Securities or for the
transfer of money to be applied to the payment of dividends,
distributions or redemptions of Corporation Shares, and shall be
utilized by the Custodian only for the purpose of providing notices to
the Corporation. Such use shall commence only after the Corporation
shall have delivered to the Custodian a Proper Instruction substantially
in the form of Exhibit D and shall have established access codes. Each
use of the Terminal Link by the Corporation shall constitute a
representation and warranty that the Terminal Link is being used only
for the purposes permitted hereby, that at least two Officers have each
utilized an access code, that such safekeeping procedures have been
established by the Corporation, and
that such use does not contravene the Investment Company Act of 1940, as
amended, or the rules or regulations thereunder.
3. The Corporation shall obtain and maintain at its own cost and expense
all equipment and services, including, but not limited to communications
services, necessary for it to utilize the Terminal Link, and the
Custodian shall not be responsible for the reliability or availability
of any such equipment or services.
4. The Corporation acknowledges that any data bases made available as part
of, or through the Terminal Link and any proprietary data, software,
processes, information and documentation (other than any such which are
or become part of the public domain or are legally required to be made
available to the public) (collectively, the "Information"), are the
exclusive and confidential property of the Custodian. The Corporation
shall, and shall cause others to which it discloses the Information, to
keep the Information confidential by using the same care and discretion
it uses with respect to its own confidential property and trade secrets,
and shall neither make nor permit any disclosure without the express
prior written consent of the Custodian.
5. Upon termination of this Agreement for any reason, the Corporation shall
return to the Custodian any and all copies of the Information which are
in the Corporation's possession or under its control, or which the
Corporation distributed to third parties. The provisions of this
Article shall not affect the copyright status of any of the Information
which may be copyrighted and shall apply to all Information whether or
not copyrighted.
6. The Custodian reserves the right to modify the Terminal Link from time
to time without notice to the Corporation except that the Custodian
shall give the Corporation notice not less than 75 days in advance of
any modification which would materially adversely affect the
Corporation's operation, and the Corporation agrees that the Corporation
shall not modify or attempt to modify the Terminal Link without the
Custodian's prior written consent. The Corporation acknowledges that
any software or procedures provided the Corporation as part of the
Terminal Link are the property of the Custodian and, accordingly, the
Corporation agrees that any modifications to the Terminal Link, whether
by the Corporation, or by the Custodian and whether with or without the
Custodian's consent, shall become the property of the Custodian.
7. Neither the Custodian nor any manufacturers and suppliers it utilizes or
the Corporation utilizes in connection with the Terminal Link makes any
warranties or representations, express or implied, in fact or in law,
including but not limited to warranties of merchantability and fitness
for a particular purpose.
8. The Corporation will cause its Officers and employees to treat the
authorization codes and the access codes applicable to Terminal Link
with extreme care, and irrevocably authorizes the Custodian to act in
accordance with and rely on Proper Instructions received by it through
the Terminal Link. The Corporation acknowledges that it is its
responsibility to assure that only its Officers use the Terminal Link on
its behalf, and that a Custodian shall not be responsible nor liable for
use of the Terminal Link on the Corporation's behalf by persons other
than such
persons or Officers, or by only a single Officer, nor for any
alteration, omission, or failure to promptly forward.
9. (a) Except as otherwise specifically provided in Section 9(b) of this
Article, the Custodian shall have no liability for any losses,
damages, injuries, claims, costs or expenses arising out of or in
connection with any failure, malfunction or other problem relating
to the Terminal Link except for money damages suffered as the
direct result of the negligence of the Custodian in an amount not
exceeding for any incident $100,000 provided, however, that the
Custodian shall have no liability under this Section 9 if the
Corporation fails to comply with the provisions of Section 11.
(b) The Custodian shall be liable for any loss or damage arising out of
its own negligence or willful misconduct in executing or failing to
execute in accordance with a duly acknowledged Proper Instruction
received through Terminal Link.
10. Without limiting the generality of the foregoing, in no event shall the
Custodian or any manufacturer or supplier of its computer equipment,
software or services relating to the Terminal Link be responsible for
any special, indirect, incidental or consequential damages which the
Corporation may incur or experience by reason of its use of the Terminal
Link even if the Custodian or any manufacturer or supplier has been
advised of the possibility of such damages, nor with respect to the use
of the Terminal Link shall the Custodian or any such manufacturer or
supplier be liable for acts of God, or with respect to the following to
the extent beyond such person's reasonable control: machine or computer
breakdown or malfunction, interruption or malfunction of communication
facilities, labor difficulties or any other similar or dissimilar cause.
11. The Corporation shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, the Terminal Link as
promptly as practicable, and in any event within 24 hours after the
earliest of (i) discovery thereof, (ii) the Business Day on which
discovery should have occurred as a result of the need to use such
Terminal Link, and where, through the exercise of reasonable care such
omission, interruption, delay or unavailability, such problem would have
been discovered, and (iii) in the case of any error, the date of actual
receipt of the earliest notice which reflects such error, it being
agreed that discovery and receipt of notice may only occur on a business
day. The Custodian shall promptly advise the Corporation whenever the
Custodian learns of any errors, omissions or interruption in, or delay
or unavailability of, the Terminal Link.
12. The Custodian shall verify to the Corporation, by use of the Terminal
Link, receipt of each Proper Instruction the Custodian receives through
the Terminal Link. If the Custodian cannot, for some reason, verify
through Terminal Link, then it will verify by facsimile. In the absence
of such verification the Custodian shall not be liable for any failure
to act in accordance with such Certificate and the Corporation may not
claim that such Certificate was received by the Custodian. Such
verification, which may occur after the Custodian has acted upon such
Proper Instruction, shall be accomplished on the same day on which such
Proper Instruction is received.
ARTICLE XVI
RESERVED
ARTICLE XVII
CONCERNING THE CUSTODIAN
1. The Custodian shall be held to a standard of reasonable care in carrying
out the provisions of this Agreement. Except as hereinafter provided,
or as provided in Article XVI, neither the Custodian nor its nominee
shall be liable for any loss or damage, including counsel fees,
resulting from its action or omission to act or otherwise, either
hereunder or under any Margin Account Agreement, except for any such
loss or damage arising out of its own negligence or willful misconduct.
In no event shall the Custodian be liable to the Corporation or any
third party for special, indirect or consequential damages or lost
profits or loss of business, arising under or in connection with this
Agreement, even if previously informed of the possibility of such
damages and regardless of the form of action, unless such loss resulted
from the Custodian's willful misconduct. Negligence includes the
failure of the Custodian to comply with any law or regulation applicable
to the Custodian. The Custodian may, with respect to questions of law
arising hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Corporation or of its
own counsel, and the Corporation shall pay the reasonable expenses
thereof, and the Custodian shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such
advice or opinion. The Custodian shall be liable to the Corporation for
any loss or damage resulting from the use of the Book-Entry System or
any Depository arising by reason of any negligence or willful misconduct
on the part of the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased, sold, or
written by or for the Corporation, the legality of the purchase,
sale or writing thereof, or the propriety of the amount paid or
received therefor;
(b) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(c) The legality of the declaration or payment of any dividend by the
Corporation;
(d) The legality of any borrowing by the Corporation using Securities
as collateral;
(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to determine that any
cash collateral delivered to it by a broker,
dealer, or financial institution or held by it at any time as a
result of such loan of portfolio Securities of the Corporation is
adequate collateral for the Corporation against any loss it might
sustain as a result of such loan. The Custodian specifically, but
not by way of limitation, shall not be under any duty or obligation
periodically to check or notify the Corporation that the amount of
such cash collateral held by it for the Corporation is sufficient
collateral for the Corporation, but such duty or obligation shall
be the sole responsibility of the Corporation. In addition, the
Custodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio
Securities of the Corporation are lent pursuant to Article XIV of
this Agreement makes payment to it of any dividends or interest
which are payable to or for the account of the Corporation during
the period of such loan or at the termination of such loan,
provided, however, that the Custodian shall promptly notify the
Corporation in the event that such dividends or interest are not
paid and received when due and to fully cooperate (at the
Corporation's expense) with the Corporation in obtaining any such
dividends and/or interest; or
(f) The sufficiency or value of any amounts of money and/or Securities
held in any Margin Account, Senior Security Account or Collateral
Account in connection with transactions by the Corporation. In
addition, the Custodian shall be under no duty or obligation to see
that any broker, dealer, futures commission merchant or Clearing
Member makes payment to the Corporation of any variation margin
payment or similar payment which the Corporation may be entitled to
receive from such broker, dealer, futures commission merchant or
Clearing Member, to see that any payment received by the Custodian
from any broker, dealer, futures commission merchant or Clearing
Member is the amount the Corporation is entitled to receive, or to
notify the Corporation of the Custodian's receipt or non-receipt of
any such payment.
3. The Custodian shall not be liable for, or considered to be the Custodian
of, any money, whether or not represented by any check, draft, or other
instrument for the payment of money, received by it on behalf of the
Corporation until the Custodian actually receives and collects such
money directly or by the final crediting of the account representing the
Corporation's interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and shall not be liable for
ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to Securities
held in the Depository, unless the Custodian shall have actually
received timely notice thereof from. In no event shall the Custodian
have any responsibility or liability for the failure of the Depository
to collect, or for the late collection or late crediting by the
Depository or any other payor or issuer of any amount payable upon
Securities deposited in the Depository which may mature or be redeemed,
retired, called or otherwise become payable. However, upon receipt of a
Proper Instruction from the Corporation of an overdue amount on
Securities held in the Depository the Custodian shall make a claim
against the Depository on behalf of the Corporation, except that the
Custodian shall not be under any obligation to appear in, prosecute or
defend any action suit or proceeding in respect to any Securities held
by the Depository which in its opinion may involve it in expense or
liability,
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Corporation from the
Transfer Agent of the Corporation nor to take any action to effect
payment or distribution by the Transfer Agent of the Corporation of any
amount paid by the Custodian to the Transfer Agent of the Corporation in
accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount, if the Securities upon which such
amount is payable are in default, or if payment is refused after due
demand or presentation, unless and until (i) it shall be directed to
take such action by a Proper Instruction and (ii) it shall be assured to
its satisfaction of reimbursement of its costs and expenses in
connection with any such action.
7. The Custodian may appoint one or more banking institutions as Depository
or Depositories, as Sub-Custodian or Sub-Custodians, or as Co-Custodian
or Co-Custodians, of Securities and moneys at any time owned by the
Corporation, upon such terms and conditions as may be approved in a
Proper Instruction or contained in an agreement executed by the
Custodian, the Corporation and the appointed institution.
8. The Custodian shall not be under any duty or obligation (a) to ascertain
whether any Securities at any time delivered to, or held by it or by any
Foreign Sub-Custodian, for the account of the Corporation and
specifically allocated to a Series are such as properly may be held by
the Corporation or such Series under the provisions of its then current
prospectus, or (b) to ascertain whether any transactions by the
Corporation, whether or not involving the Custodian, are such
transactions as may properly be engaged in by the Corporation.
9. The Custodian shall be entitled to receive and the Corporation agrees to
pay to the Custodian all reasonable out-of-pocket expenses and such
compensation as may be agreed upon from time to time between the
Custodian and the Corporation. The Custodian may charge such
compensation and any such reasonable expenses with respect to a Series
incurred by the Custodian in the performance of its duties pursuant to
such agreement against any money specifically allocated to such Series.
Unless and until the Corporation instructs the Custodian by a Proper
Instruction to apportion any loss, damage, liability or expense among
the Series in a specified manner, the Custodian shall also be entitled
to invoice a Series such Series' pro rata share (based on such Series
net asset value at the time of the charge to the aggregate net asset
value of all Series at that time) of the amount of any loss, damage,
liability or expense, including reasonable fees of counsel not of
salaried employees of the Custodian, for which it shall be entitled to
reimbursement under the provisions of this Agreement.
10. The Custodian shall be entitled to rely upon any Proper Instruction,
notice or other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be a Proper Instruction. The
Custodian shall be entitled to rely upon any Proper Instruction orally
given and actually received by the Custodian hereinabove provided for,
provided such instructions reasonably appear to have been received from
an Officer. The Corporation agrees to confirm
to the Custodian such a Proper Instruction by facsimile or otherwise, by
the close of business of the same day that such Instructions are given
to the Custodian. The Corporation agrees that the fact that such
confirming instructions are not received by the Custodian shall in no
way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Corporation. The Corporation
agrees that the Custodian shall incur no liability to the Corporation in
acting upon Proper Instructions orally given to the Custodian hereunder
concerning such transactions provided such instructions reasonably
appear to have been received from an Officer.
11. The Custodian shall be entitled to rely upon any instrument, instruction
or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any
Margin Account Agreement. Without limiting the generality of the
foregoing, the Custodian shall be under no duty to inquire into, and
shall not be liable for, the accuracy of any statements or
representations contained in any such instrument or other notice
including, without limitation, any specification of any amount to be
paid to a broker, dealer, futures commission merchant or Clearing
Member.
12. The books and records pertaining to the Corporation which are in the
possession of the Custodian shall be the property of the Corporation.
Such books and records shall be prepared and maintained as required by
the 1940 Act, as amended, and other applicable securities laws and rules
and regulations. The Corporation, or the Corporation's authorized
representatives, shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request of the
Corporation, copies of any such books and records shall be provided by
the Custodian to the Corporation or the Corporation's authorized
representative, and the Corporation shall reimburse the Custodian its
reasonable expenses of providing such copies. Upon reasonable request
of the Corporation, the Custodian shall provide in hard copy or on
microfilm computer disc or other electronic means, whichever the
Custodian elects, any records included in any such delivery which are
maintained by the Custodian on a computer disc, or are similarly
maintained, and the Corporation shall reimburse the Custodian for its
reasonable expenses of providing such hard copy or microfilm.
13. The Custodian shall provide the Corporation with any report obtained by
the Custodian on the system of internal accounting control of the
Book-Entry System, the Depository or O.C.C., including any report of
such entities the Custodian receives from any banking regulator, and
with such reports on its own systems of internal accounting control as
the Corporation may reasonably request from time to time.
14. The Corporation agrees to indemnify the Custodian against and save the
Custodian harmless from all liability, claims, losses and demands
whatsoever, including reasonable attorneys' fees, howsoever arising or
incurred because of or in connection with this Agreement, including the
Custodian's payment or non-payment of checks pursuant to paragraph 6 of
Article XIII as part of any check redemption privilege program of the
Corporation, except for any such liability, claim, loss and demand
arising out of the Custodian's own or its agents negligence or willful
misconduct or breach of the terms of this Agreement.
15. Subject to the foregoing provisions of this Agreement, including,
without limitation, those contained in Article XVI, the Custodian may
deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the
Custodian in accordance with the rules of any Depository or Book-Entry
System or O.C.C. and with respect to physicals not delivered to one of
the foregoing, in accordance with the customs and practices prevailing
among brokers and dealers in such securities on the date of execution of
this Agreement, or in accordance with such lesser customs, if any, as
may be approved by the Corporation in Proper Instructions. The
Custodian will immediately inform the Corporation and await a specific
Proper Instruction and/or a resolution of the Executive Committee of the
Board of Directors before permitting the release of securities or cash
which is not against delivery of the counteritem, except for deliveries
described in the preceding sentence. The Corporation assumes all
responsibility and liability for all credit risks involved in connection
with the Custodian's delivery of Securities pursuant to such Proper
Instructions or Executive Committee Resolution of the Corporation, which
responsibility and liability shall continue until final payment in full
has been received by the Custodian.
16. The Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this
Agreement against the Custodian.
ARTICLE XVIII
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the
date of giving of such notice. In the event such notice is given by the
Corporation, it shall be accompanied by a copy of a resolution of the
Board of Directors of the Corporation, certified by the Secretary or any
Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians, each of which shall be
a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. In the event such notice is
given by the Custodian, the Corporation shall, on or before the
termination date, deliver to the Custodian a copy of a resolution of the
Board of Directors of the Corporation, certified by the Secretary or any
Assistant Secretary, designating a successor custodian or custodians.
In the absence of such designation by the Corporation, the Custodian may
designate a successor custodian which shall be a bank or trust company
having not less than $2,000,000 aggregate capital, surplus and undivided
profits. Upon the date set forth in such notice this Agreement shall
terminate, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and moneys then owned by the
Corporation and held by it as Custodian, after deducting all fees,
reasonable expenses and other amounts for the payment or reimbursement
of which it shall then be entitled.
2. If a successor custodian is not designated by the Corporation or the
Custodian in accordance with the preceding paragraph, the Corporation
shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by the Custodian of
all Securities (other than Securities held in the Book-Entry System
which cannot be delivered to the Corporation) and moneys then owned by
the Corporation be deemed to be its own custodian and the Custodian
shall thereby be relieved of all duties and responsibilities pursuant to
this Agreement, other than the duty with respect to Securities held in
the Book Entry System which cannot be delivered to the Corporation to
hold such Securities hereunder in accordance with this Agreement.
ARTICLE XIX
MISCELLANEOUS
1. Annexed hereto as Appendix A are the Authorized and Proper Instructions
signed by present Officers of the Corporation under its corporate seal,
setting forth the names and the signatures of the present Officers of
the Corporation. The Corporation agrees to furnish to the Custodian a
new Authorized and Proper Instructions in similar form in the event any
such present Officer ceases to be an Officer of the Corporation, or in
the event that other or additional Officers are elected or appointed.
Until such new Authorized and Proper Instructions shall be received, the
Custodian shall be fully protected in acting under the provisions of
this Agreement upon the signatures of the Officers as set forth in the
last delivered Authorized and Proper Instructions.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given
if addressed to the Custodian and mailed, sent by reliable overnight
delivery service or delivered to it at its offices at 000 Xxxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or sent by facsimile to
(000) 000-0000 or at such other place as the Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Corporation shall be sufficiently
given if addressed to the Corporation and mailed, sent by reliable
overnight delivery service or delivered to it at its office at the
address for the Corporation first above written, or at such other place
or facsimile number as the Corporation may from time to time designate
in writing.
4. This Agreement may not be amended except by a written agreement executed
by both parties with the same formality as this Agreement and approved
by a resolution of the Board of Directors of the Corporation. However,
in connection with the operation of the Agreement, the Custodian and the
Corporation may from time to time agree in writing 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, which provisions will not be deemed to be amendments.
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Corporation without
the written consent of the Custodian, or by the
Custodian without the written consent of the Corporation, authorized or
approved by a resolution of the Corporation's Board of Directors.
6. This Agreement shall be construed in accordance with the laws of the
State of New York without giving effect to conflict of laws principles
thereof. Each party hereby consents to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any
dispute arising hereunder and hereby waives its right to trial by jury.
7. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one and the same instrument.
8. A copy of the Articles of Incorporation of the Corporation is on file
with the office of the State Department of Assessments and Taxation of
the State of Maryland, and notice is hereby given that this instrument
is executed on behalf of the Board of Directors of the Corporation and
not individually and that the obligations of this instrument are not
binding upon any of the Directors or shareholders individually but are
binding only upon the assets and property of the Corporation; provided,
however, that the Articles of Incorporation provide that the assets of a
particular Series of the Corporation shall under no circumstances be
charged with liabilities attributable to any other Series of the
Corporation and that all persons extending credit to, or contracting
with or having any claim against a particular Series of the Corporation
shall look only to the assets of that particular Series for payment of
such credit, contract or claim. The Custodian acknowledges that it has
read and understands the exculpation and limitation of liability
provisions of the Corporation, Article XI, Section3.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate Officers, thereunto duly authorized
and their respective corporate seals to be hereunto affixed, as of the day
and year first above written.
Attest: BATTERY PARK FUNDS, INC.
____________________ ____________________
Xxxxxxx X. Xxxxxxx Xxxxxx Xxxxxx
Secretary President
Attest THE BANK OF NEW YORK
____________________ ____________________
Xxx X. Xxxxxx Xxxxxxx X. Grunston
Vice President Vice President
APPENDIX A
Custodian Contract
Authorization and Proper Instructions
I. Pursuant to Article III, Section3; Article XI, Section5, Section6;
Article XVII, Xxxxxxx0, Xxxxxxx0, Xxxxxxx0, Section4, Section5,
Section6, Section12, Section14; Article XVIII, Section1, Section6; and
Article XIV, Section1, of the Custodian Contract (the "Contract")
between Battery Park Corporations, Inc. (the "Corporation") and The
Bank of New York (the "Custodian"), this shall constitute the
authorization of the persons named herein to issue Proper Instructions
on behalf of the Corporation, in the form and on the basis set forth in
the Authorizations and Proper Instructions. The meaning of all terms
used herein shall be the same as the meaning of those respective terms
in the Contract.
II. Oral instructions shall be authorized only as specified herein and shall
be subject to any security measures as shall hereafter be directed by
each Corporation in writing.
III. The following Corporation officers, INSERT OFFICERS' NAMES, shall be
authorized to sign Proper Instructions issued under SectionII, 1;
SectionIII, 1 and 5(e) of the Contract, and to perform all functions set
forth hereafter.
IV. Standing instructions, which shall be in writing, shall be authorized
only as specified herein and shall continue until such instructions are
revoked directly or by the transmittal of new instructions by the
Corporation. Standing instructions may be issued with respect to the
following subsections of the Contract by persons as designated in the
subsequent sections of this API:
A. Article III, Section5(b), (c), (d), Section6(b), (c), (d), (e);
Article V, Section7, Section9, Section11; Article VI, Xxxxxxx0,
Xxxxxxx0, Xxxxxxx0; Article VII, Section3, Section4, Section5,
Section6, Section8; Article VIII, Section1, Section2; Article X,
Section1; and Article XX, Xxxxxxx0, Xxxxxxx0 of the Contract.
B. Article III, Section2(b), (c); Article V, Section8, Section10,
Section11; Article VI, Section1; Article VII, Section4, Section5,
Section8; Article VIII, Section1, Section2; Article XI, Section1,
Section2; Article XII, Section2; Article XIII, Section5; and
Article XIV, Section2 of the Contract.
V. Proper Instructions issued under the following Sections of the Contract
as described in this Article V shall be given orally, electronically, by
telefacsimile or in writing by any one of the persons designated in
Attachment A under SECTION 4. TRADING, TRADING SUPPORT STAFF OR
RESEARCH PERSONNEL:
A. With regard to the Delivery of Securities, Article III,
Section5(b), (c) (d), Section6(b), (c), (d), (e); Article IV,
Section2; Article V, Section2, Section4, Section7, Section8,
Section9, Section10, Section11; Article VI, Xxxxxxx0, Xxxxxxx0,
Xxxxxxx0; Article VII, Section3, Section4, Section5, Section6,
Section8; Article VIII, Section2; Article IX, Section1; Article XX,
Xxxxxxx0, Xxxxxxx0; and Article XVII, Section15.
B. With regard to the Payment of Corporation Moneys, Article IV,
Section1; Article V, Section1, Section3, Section9; Article VI,
Xxxxxxx0, 0, Xxxxxxx0, Xxxxxxx0; Article VII, Section1, Section3,
Section6, Section8; Article IX, Section1; and Article XI, Section1,
Section2.
C. With regard to Article IX of the Contract: Reverse Repurchase
Agreements.
D. With regard to Article XIV, Section1 and Article XVII, Xxxxxxx0,
Xxxxxxx0, Xxxxxxx0, Section4, Section5, Section6 and Section14 of
the Contract:
1. Designations of Corporation securities subject to a security
interest of the Custodian made pursuant to this Section of the
Contract;
2. These designations shall be standing.
Confirmation of such oral or fax Proper Instructions shall be given in
writing by any two of the persons designated in Attachment A under SECTION 2.
CORPORATE RECORDS OR SECTION 4. TRADING, TRADING SUPPORT STAFF OR RESEARCH
PERSONNEL.
VI. Article VIII, Section1 and Article XI of the Contract:
Proper Instructions issued under the above subsections of the Contract
as described in this Article shall be signed by CHIEF INVESTMENT OFFICER
OF NOMURA.
VII. Article III, Section2 and Section4 of the Contract (Segregated Account):
Proper Instructions issued under the above subsections of the Contract as
described in this Article shall be signed by any one of the persons
designated in Attachment A under SECTION 4. TRADING, TRADING SUPPORT STAFF
OR RESEARCH PERSONNEL.
VIII. Article V, Section8, Section10, Section11; VII, Xxxxxxx0, Xxxxxxx0,
Xxxxxxx0; Article VIII, Section1 and Section2; Article XI, Section1
and Section2; Article XII, Section2; and Article XIV, Section2 of
the Contract:
Proper Instructions issued under the above subsections of the
Contract as described in this Article VIII shall be signed by any
one of the persons designated in Attachment A under SECTION 3. FINANCE.
IX. Article III, Section2(c); and Article IV, Section1 of the Contract:
Proper Instructions issued under the above Subsection of the Contract as
described in this Article IX shall be signed by any one of the persons
designated in Attachment A under SECTIONS 1. PRODUCT ADMINISTRATION OR 3.
FINANCE.
X. With regard to Article XVII of the Contract: Concerning the Custodian:
A. The Custodian is hereby directed to keep the books of account of
this Corporation and to compute the net asset value per share,
based upon portfolio securities prices to be obtained from the
authorized Corporation pricing agent, subject to price corrections
or accounting entries which shall be furnished orally by those
persons designated in Attachment A under SECTION 3. FINANCE.
B. The Custodian is hereby directed to calculate daily the net income
of this Corporation and to advise the Corporation's Transfer Agent
of the division of net income among its various components.
C. The Corporate Calendar serves as the standing instruction to
release dividends.
ATTACHMENT A
to the
Authorization & Proper Instructions
to the Custodian Contract
for BATTERY PARK FUNDS, INC.
SECTION 1 SECTION 3
--------- ---------
PRODUCT ADMINISTRATION FINANCE
(authorized to sign for (authorized to perform
operating expenses) accounting entries, etc.)
Xxxxx X. Xxxxx Xxxxx X. Xxxxx
R. Xxxxxxx Xxxx Xxxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxx Xxxxxx X. Del Xxxxxxx
Xxxxxx X. Xxxxx, Xx.
Xxxx X. Germ
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxx
SECTION 2 Xxxx Xxxx Xxxxxxxxxx
--------- Xxxxxxx X. Xxxxxx
CORPORATE RECORDS Xxxxxxx X. Xxxxxx
(authorized to co-sign Xxxxxxx X. Xxxxxxxxx
confirmations) Xxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxx Xxxxxx Xxxxx X. Xxxxxx
Xxxxxxxxx X. Nettorur Xxxxx Xxxxxxxxx
SECTION 4
--------- SECTION 6
TRADING ---------
(authorized to give oral RESEARCH PERSONNEL
and FAX instructions) (authorized to sign
instructions and issue
standing instructions)
Xxxxxxx Xxxx
Xxxx Xxxxxxxxxx
Yahyin Xxxxx Xxxxxxx Xxxx
Xxxxx Xxxxx Xxxx Xxxxxxxxxx
Xxxx Xxxxxx Yahyin Xxxxx
Xxxxxx Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx Xxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxx
SECTION 5
---------
TRADING SUPPORT STAFF
(authorized to co-sign
confirmation of oral
instructions)
Xxxxxxx Xxxx
Xxxx Xxxxxxxxxx
Yahyin Xxxxx
Xxxxx Xxxxx
Xxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxx
SECTION 6
---------
RESEARCH PERSONNEL
(authorized to sign
instructions and issue
standing instructions)
APPENDIX B
I, Xxx X. Xxxxxx, a Vice President with THE BANK OF NEW YORK do hereby
designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
EXHIBIT A
BATTERY PARK FUNDS, INC.
C E R T I F I C A T I O N
-------------------------
The undersigned, Assistant Secretary of Battery Park Funds, Inc. (the
"Corporation"), hereby certifies that the following resolutions were duly
adopted by the Board of Directors of the Corporation on September 30, 1996,
substantially and materially as follows and that said resolutions have not
been amended or rescinded:
RESOLVED, that the Board hereby approves the use of the following
book-entry systems for the Corporation, as specified in the
Custodian Contract between the Custodian and the Corporation:
The Bank of New York;
Bankers Trust Company;
The Chase Manhattan Corporation;
Xxxxxx Guaranty Trust Company of New York;
NationsBank of North Carolina;
NationsBank of Virginia; and
PNC Bank
WITNESS the due execution hereof this 1st day of October, 1996.
---------------------------------------
Xxxx Xxxxxx
Assistant Secretary
EXHIBIT B
BATTERY PARK FUNDS, INC.
C E R T I F I C A T I O N
-------------------------
The undersigned, Assistant Secretary of Battery Park Funds, Inc. (the
"Corporation"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Corporation on September 30, 1996,
substantially and materially as follows and that said resolution has not been
amended or rescinded:
RESOLVED, that the Board hereby authorizes and approves the use by the
Custodian of Depository Trust Company the Federal Reserve
Book-Entry System as securities depositories for the
Corporation and the use of Participants Trust Company as a
securities depository for the Corporation, as specified in the
Custodian Contract between the Custodian and the Corporation.
WITNESS the due execution hereof this 1st day of October, 1996.
---------------------------------------
Xxxx Xxxxxx
Assistant Secretary
EXHIBIT C
BATTERY PARK FUNDS, INC.
C E R T I F I C A T I O N
-------------------------
The undersigned, Assistant Secretary of Battery Park Funds, Inc. (the
"Corporation"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Corporation on September 30, 1996,
substantially and materially as follows and that said resolution has not been
amended or rescinded:
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the
Corporation dated as of September 1, 1996, (the "Custody
Agreement") is authorized and instructed on a continuous and
ongoing basis until such time as it receives a Proper
Instruction, as defined in the Custody Agreement, to the
contrary, to accept, utilize and act with respect to Clearing
Member confirmations for Derivatives and Options and
transactions in Derivations and Options, regardless of the
Series to which the same are specifically allocated, as such
terms are defined in the Custody Agreement, as provided in the
Custody Agreement.
WITNESS the due execution hereof this 1st day of October, 1996.
----------------------------------
Xxxx Xxxxxx
Assistant Secretary
EXHIBIT D
BATTERY PARK FUNDS, INC.
C E R T I F I C A T I O N
-------------------------
The undersigned, Assistant Secretary of Battery Park Funds, Inc. (the
"Corporation"), hereby certifies that the following resolutions were duly
adopted by the Board of Directors of the Corporation on, September 30, 1996,
substantially and materially as follows and that said resolutions have not
been amended or rescinded:
RESOLVED, that The Bank of New York, as Custodian pursuant to a
Custody Agreement between The Bank of New York and the
Corporation dated as of October 1, 1996, (the "Custody
Agreement") is authorized and instructed on a continuous and
ongoing basis to act in accordance with, and to rely on Proper
Instructions (as defined in the Custody Agreement) given by
the Corporation to the Custodian by a Terminal Link (as
defined in the Custody Agreement).
RESOLVED, that the Corporation shall establish access codes and grant
use of such access codes only to Officers of the Corporation
as defined in the Custody Agreement, shall establish internal
safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes, shall
limit its use of the Terminal Link to those purposes permitted
by the Custody Agreement, shall require at least two such
Officers to utilize their respective access codes in
connection with each such Proper Instruction, and shall use
the Terminal Link only in a manner that does not contravene
the Investment Company Act of 1940, as amended, or the rules
and regulations thereunder.
RESOLVED, that Officers of the Corporation shall, following the
establishment of such access codes and such internal
safekeeping procedures, advise the Custodian that the same
have been established by delivering a Proper Instruction, as
defined in the Custody Agreement, and the Custodian shall be
entitled to rely upon such advice.
WITNESS the due execution hereof this 1st day of October, 1996.
----------------------------------
Xxxx Xxxxxx
Assistant Secretary
