CUSTODY AGREEMENT
AGREEMENT, dated as of May __, 2004 between Advent Claymore Global
Total Return Fund, a statutory trust organized and existing under the laws of
the State of Delaware having its principal office and place of business at
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Fund")
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 Xxx Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "Authorized Person" shall be any person, whether or not an officer
or employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian
from time to time.
2. "BNY Affiliate" shall mean any office, branch or subsidiary of The
Bank of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
4. "Business Day" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
Custodian, which is actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
6. "Composite Currency Unit" shall mean the Euro or any other
composite currency unit consisting of the aggregate of specified amounts of
specified currencies, as such unit may be constituted from time to time.
7. "Depository" shall include (a) the Book-Entry System, (b) the
Depository Trust Company, (c) any other clearing agency or securities
depository registered with the Securities and Exchange Commission identified
to the Fund from time to time, and (d) the respective successors and nominees
of the foregoing.
8. "Foreign Depository" shall mean (a) Euroclear, (b) Clearstream
Banking, societe anonyme, (c) each Eligible Securities Depository as defined
in Rule 17f-7 under the Investment Company Act of 1940, as amended, identified
to the Fund from time to time, and (d) the respective successors and nominees
of the foregoing.
9. "Instructions" shall mean communications transmitted by electronic
or telecommunications media, including S.W.I.F.T., computer-to-computer
interface, or dedicated transmission lines.
10. "Series" shall mean the various portfolios, if any, of the Fund
listed on Schedule II hereto, and if none are listed references to Series
shall be references to the Fund.
11. "Securities" shall include, without limitation, any common stock
and other equity securities, bonds, debentures and other debt securities,
notes, mortgages or other obligations, and any instruments representing rights
to receive, purchase, or subscribe for the same, or representing any other
rights or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
12. "Subcustodian" shall mean a bank (including any branch thereof)
or other financial institution (other than a Foreign Depository) located
outside the U.S. which is utilized by Custodian in connection with the
purchase, sale or custody of Securities hereunder and identified to the Fund
from time to time, and their respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all
Securities and cash at any time delivered to Custodian during the term of this
Agreement, and authorizes Custodian to hold Securities in registered form in
its name or the name of its nominees. Custodian hereby accepts such
appointment and agrees to establish and maintain one or more securities
accounts and cash accounts for each Series in which Custodian will hold
Securities and cash as provided herein. Custodian shall maintain books and
records segregating the assets of each Series from the assets of any other
Series. Such accounts (each, an "Account"; collectively, the "Accounts") shall
be in the name of the Fund.
(b) Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian may
agree upon (each a "Special Account"), and Custodian shall reflect therein
such assets as the Fund may specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, future commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree,
and Custodian shall transfer to such account such Securities and money as the
Fund may specify in a Certificate or Instructions.
2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or Instructions by the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Fund, approved by a resolution of its board, constitutes a valid and
legally binding obligation of the Fund, enforceable in accordance with its
terms, and there is no statute, regulation, rule, order or judgment binding on
it, and no provision of its charter or by-laws, nor of any mortgage,
indenture, credit agreement or other contract binding on it or affecting its
property, which would prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with all
applicable laws and requirements, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted;
(d) It will not use the services provided by Custodian hereunder in
any manner that is, or will result in, a violation of any law, rule or
regulation applicable to the Fund;
(e) Except to the extent The Bank of New York is the foreign custody
manager for the Fund, its board or its foreign custody manager, as defined in
Rule 17f-5 under the Investment Company Act of 1940, as amended (the "`40
Act"), has determined that use of each Subcustodian (including any Replacement
Custodian) and each Depository which Custodian or any Subcustodian is
authorized to utilize in accordance with Section 1(a) of Article III hereof,
satisfies the applicable requirements of the `40 Act and Rules 17f-4 or 17f-5
thereunder, as the case may be;
(f) The Fund or its investment adviser has determined that the
custody arrangements of each Foreign Depository provide reasonable safeguards
against the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the `40 Act;
(g) It is fully informed of the protections and risks associated with
various methods of transmitting Instructions and delivering Certificates to
Custodian, understands that there may be more secure methods of transmitting
or delivering the same than the methods selected by the Fund, agrees that the
security procedures (if any) to be utilized provide a commercially reasonable
degree of protection in light of its particular needs and circumstances, and
acknowledges and agrees that Instructions need not be reviewed by Custodian,
may conclusively be presumed by Custodian to have been given by person(s) duly
authorized, and may be acted upon as given;
(h) It shall manage its borrowings, including, without limitation,
any advance or overdraft (including any day-light overdraft) in the Accounts,
so that the aggregate of its total borrowings for each Series does not exceed
the amount such Series is permitted to borrow under the `40 Act;
(i) Its transmission or giving of, and Custodian acting upon and in
reliance on, Certificates or Instructions pursuant to this Agreement shall at
all times comply with the `40 Act;
(j) It shall impose and maintain restrictions on the destinations to
which cash may be disbursed by Instructions to ensure that each disbursement
is for a proper purpose; and
(k) It has the right to make the pledge and grant the security
interest and security entitlement to Custodian contained in Section 1 of
Article V hereof, free of any right of redemption or prior claim of any other
person or entity, such pledge and such grants shall have a first priority
subject to no setoffs, counterclaims, or other liens or grants prior to or on
a parity therewith, and it shall take such additional steps as Custodian may
require to assure such priority.
3. The Fund hereby covenants that it shall from time to time complete
and execute and deliver to Custodian upon Custodian's request a Form FR U-1
(or successor form) whenever the Fund borrows from Custodian any money to be
used for the purchase or carrying of margin stock as defined in Federal
Reserve Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes
Custodian to hold any Securities received by it from time to time for the
Fund's account. Custodian shall be entitled to utilize Depositories,
Subcustodians, and, subject to subsection(c) of this Section 1, Foreign
Depositories, to the extent possible in connection with its performance
hereunder. Securities and cash held in a Depository or Foreign Depository will
be held subject to the rules, terms and conditions of such entity. Securities
and cash held through Subcustodians shall be held subject to the terms and
conditions of Custodian's agreements with such Subcustodians. Subcustodians
may be authorized to hold Securities in Foreign Depositories in which such
Subcustodians participate. Unless otherwise required by local law or practice
or a particular subcustodian agreement, Securities deposited with a
Subcustodian, a Depositary or a Foreign Depository will be held in a
commingled account, in the name of Custodian, holding only Securities held by
Custodian as custodian for its customers. Custodian shall identify on its
books and records the Securities and cash belonging to the Fund, whether held
directly or indirectly through Depositories, Foreign Depositories, or
Subcustodians. Custodian shall, directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible, to
hold Securities in the country or other jurisdiction in which the principal
trading market for such Securities is located, where such Securities are to be
presented for cancellation and/or payment and/or registration, or where such
Securities are acquired. Custodian at any time may cease utilizing any
Subcustodian and/or may replace a Subcustodian with a different Subcustodian
(the "Replacement Subcustodian"). In the event Custodian selects a Replacement
Subcustodian, Custodian shall not utilize such Replacement Subcustodian until
after the Fund's board or foreign custody manager has determined that
utilization of such Replacement Subcustodian satisfies the requirements of the
'40 Act and Rule 17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to
the contrary, Custodian shall hold Securities indirectly through a
Subcustodian only if (i) the Securities are not subject to any right, charge,
security interest, lien or claim of any kind in favor of such Subcustodian or
its creditors or operators, including a receiver or trustee in bankruptcy or
similar authority, except for a claim of payment for the safe custody or
administration of Securities on behalf of the Fund by such Subcustodian, and
(ii) beneficial ownership of the Securities is freely transferable without the
payment of money or value other than for safe custody or administration.
(c) With respect to each Foreign Depository, Custodian shall exercise
reasonable care, prudence, and diligence (i) to provide the Fund with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing
basis and promptly notify the Fund of any material change in such risks. The
Fund acknowledges and agrees that such analysis and monitoring shall be made
on the basis of, and limited by, information gathered from Subcustodians or
through publicly available information otherwise obtained by Custodian, and
shall not include any evaluation of Country Risks. As used herein the term
"Country Risks" shall mean with respect to any Foreign Depository: (a) the
financial infrastructure of the country in which it is organized, (b) such
country's prevailing custody and settlement practices, (c) nationalization,
expropriation or other governmental actions, (d) such country's regulation of
the banking or securities industry, (e) currency controls, restrictions,
devaluations or fluctuations, and (f) market conditions which affect the order
execution of securities transactions or affect the value of securities.
2. Custodian shall furnish the Fund with an advice of daily
transactions (including a confirmation of each transfer of Securities) and a
monthly summary of all transfers to or from the Accounts.
3. With respect to all Securities held hereunder, Custodian shall,
unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund as
promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all
Securities which may mature and advise the Fund as promptly as practicable of
any such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents that
it may actually receive from an issuer of Securities which, in the opinion of
Custodian, are intended for the beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates under any tax laws now or hereafter in
effect in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or a
Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify the Fund of rights or discretionary
actions with respect to Securities held hereunder, and of the date or dates by
when such rights must be exercised or such action must be taken, provided that
Custodian has actually received, from the issuer or the relevant Depository
(with respect to Securities issued in the United States) or from the relevant
Subcustodian, Foreign Depository, or a nationally or internationally
recognized bond or corporate action service to which Custodian subscribes,
timely notice of such rights or discretionary corporate action or of the date
or dates such rights must be exercised or such action must be taken. Absent
actual receipt of such notice, Custodian shall have no liability for failing
to so notify the Fund.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business
Days prior to the last scheduled date to act with respect to such Securities
(or such earlier date or time as Custodian may specify to the Fund). Absent
Custodian's timely receipt of such Certificate or Instructions, Custodian
shall not be liable for failure to take any action relating to or to exercise
any rights conferred by such Securities.
5. All voting rights with respect to Securities, however registered,
shall be exercised by the Fund or its designee. For Securities issued in the
United States, Custodian's only duty shall be to mail to the Fund any
documents (including proxy statements, annual reports and signed proxies)
actually received by Custodian relating to the exercise of such voting rights.
With respect to Securities issued outside of the United States, Custodian's
only duty shall be to provide the Fund with access to a provider of global
proxy services at the Fund's request. The Fund shall be responsible for all
costs associated with its use of such services.
6. Custodian shall promptly advise the Fund upon Custodian's actual
receipt of notification of the partial redemption, partial payment or other
action affecting less than all Securities of the relevant class. If Custodian,
any Subcustodian, any Depository, or any Foreign Depository holds any
Securities in which the Fund has an interest as part of a fungible mass,
Custodian, such Subcustodian, Depository, or Foreign Depository may select the
Securities to participate in such partial redemption, partial payment or other
action in any non-discriminatory manner that it customarily uses to make such
selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and
other governmental charges, including any interest or penalty with respect
thereto ("Taxes"), with respect to any cash or Securities held on behalf of
the Fund or any transaction related thereto. The Fund shall indemnify
Custodian and each Subcustodian for the amount of any Tax that Custodian, any
such Subcustodian or any other withholding agent is required under applicable
laws (whether by assessment or otherwise) to pay on behalf of, or in respect
of income earned by or payments or distributions made to or for the account of
the Fund (including any payment of Tax required by reason of an earlier
failure to withhold). Custodian shall, or shall instruct the applicable
Subcustodian or other withholding agent to, withhold the amount of any Tax
which is required to be withheld under applicable law upon collection of any
dividend, interest or other distribution made with respect to any Security and
any proceeds or income from the sale, loan or other transfer of any Security.
In the event that Custodian or any Subcustodian is required under applicable
law to pay any Tax on behalf of the Fund, Custodian is hereby authorized to
withdraw cash from any cash account in the amount required to pay such Tax and
to use such cash, or to remit such cash to the appropriate Subcustodian or
other withholding agent, for the timely payment of such Tax in the manner
required by applicable law. If the aggregate amount of cash in all cash
accounts is not sufficient to pay such Tax, Custodian shall promptly notify
the Fund of the additional amount of cash (in the appropriate currency)
required, and the Fund shall directly deposit such additional amount in the
appropriate cash account promptly after receipt of such notice, for use by
Custodian as specified herein. In the event that Custodian reasonably believes
that Fund is eligible, pursuant to applicable law or to the provisions of any
tax treaty, for a reduced rate of, or exemption from, any Tax which is
otherwise required to be withheld or paid on behalf of the Fund under any
applicable law, Custodian shall, or shall instruct the applicable Subcustodian
or withholding agent to, either withhold or pay such Tax at such reduced rate
or refrain from withholding or paying such Tax, as appropriate; provided that
Custodian shall have received from the Fund all documentary evidence of
residence or other qualification for such reduced rate or exemption required
to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any
Tax is obtainable only by means of an application for refund, Custodian and
the applicable Subcustodian shall have no responsibility for the accuracy or
validity of any forms or documentation provided by the Fund to Custodian
hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and
each Subcustodian in respect of any liability arising from any
underwithholding or underpayment of any Tax which results from the inaccuracy
or invalidity of any such forms or other documentation, and such obligation to
indemnify shall be a continuing obligation of the Fund, its successors and
assigns notwithstanding the termination of this Agreement.
9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in
the relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the actual settlement
of all sale transactions, based upon advices received by Custodian from
Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in
U.S. dollars or such other currency as the Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a BNY
Affiliate acting as principal or otherwise through customary banking channels.
The Fund may issue a standing Certificate or Instructions with respect to
foreign exchange transactions, but Custodian may establish rules or
limitations concerning any foreign exchange facility made available to the
Fund. The Fund shall bear all risks of investing in Securities or holding cash
denominated in a foreign currency.
(c) To the extent that Custodian has agreed to provide pricing or
other information services in connection with this Agreement, Custodian is
authorized to utilize any vendor (including brokers and dealers of Securities)
reasonably believed by Custodian to be reliable to provide such information.
The Fund understands that certain pricing information with respect to complex
financial instruments (e.g., derivatives) may be based on calculated amounts
rather than actual market transactions and may not reflect actual market
values, and that the variance between such calculated amounts and actual
market values may or may not be material. Where vendors do not provide
information for particular Securities or other property, an Authorized Person
may advise Custodian in a Certificate regarding the fair market value of, or
provide other information with respect to, such Securities or property as
determined by it in good faith. Custodian shall not be liable for any loss,
damage or expense incurred as a result of errors or omissions with respect to
any pricing or other information utilized by Custodian hereunder.
10. Custodian shall promptly send to the Fund (a) any reports it
receives from a Depository on such Depository's system of internal accounting
control, and (b) such reports on its own system of internal accounting control
as the Fund may reasonably request from time to time.
11. Until such time as Custodian receives a certificate to the
contrary with respect to a particular Security, Custodian may release the
identity of the Fund to an issuer which requests such information pursuant to
the Shareholder Communications Act of 1985 for the specific purpose of direct
communications between such issuer and shareholder.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund,
the Fund shall deliver to Custodian a Certificate or Instructions specifying
all information Custodian may reasonably request to settle such purchase or
sale. Custodian shall account for all purchases and sales of Securities on the
actual settlement date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed simultaneously. Notwithstanding any provision in
this Agreement to the contrary, settlements, payments and deliveries of
Securities may be effected by Custodian or any Subcustodian in accordance with
the customary or established securities trading or securities processing
practices and procedures in the jurisdiction in which the transaction occurs,
including, without limitation, delivery to a purchaser or dealer therefor (or
agent) against receipt with the expectation of receiving later payment for
such Securities. The Fund assumes full responsibility for all risks,
including, without limitation, credit risks, involved in connection with such
deliveries of Securities.
3. Custodian may, as a matter of bookkeeping convenience or by
separate agreement with the Fund, credit the Account with the proceeds from
the sale, redemption or other disposition of Securities or interest, dividends
or other distributions payable on Securities prior to its actual receipt of
final payment therefor. All such credits shall be conditional until
Custodian's actual receipt of final payment and may be reversed by Custodian
to the extent that final payment is not received. Payment with respect to a
transaction will not be "final" until Custodian shall have received
immediately available funds which under applicable local law, rule and/or
practice are irreversible and not subject to any security interest, levy or
other encumbrance, and which are specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf
of any Series which results in an overdraft (including, without limitation,
any day-light overdraft) because the money held by Custodian in an 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 Certificate or Instructions, or if an overdraft arises in the separate
account of a Series for some other reason, including, without limitation,
because of a reversal of a conditional credit or the purchase of any currency,
or if the Fund is for any other reason indebted to Custodian with respect to a
Series, including any indebtedness to The Bank of New York under the Fund's
Cash Management and Related Services Agreement (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
Section 2 of this Article), such overdraft or indebtedness shall be deemed to
be a loan made by Custodian to the Fund for such Series payable on demand and
shall bear interest from the date incurred at a rate per annum ordinarily
charged by Custodian to its institutional customers, as such rate may be
adjusted from time to time. In addition, the Fund hereby agrees that Custodian
shall to the maximum extent permitted by law have a continuing lien, security
interest, and security entitlement in and to any property, including, without
limitation, any investment property or any financial asset, of such Series at
any time held by Custodian for the benefit of such Series or in which such
Series may have an interest which is then in Custodian's possession or control
or in possession or control of any third party acting in Custodian's behalf.
The Fund authorizes 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 Custodian's books.
2. If the Fund borrows money from any bank (including Custodian if
the borrowing is pursuant to a separate agreement) for investment or for
temporary or emergency purposes using Securities held by Custodian hereunder
as collateral for such borrowings, the Fund shall deliver to Custodian a
Certificate specifying with respect to each such borrowing: (a) the Series to
which such borrowing relates; (b) the name of the bank, (c) the amount of the
borrowing, (d) the time and date, if known, on which the loan is to be entered
into, (e) the total amount payable to the Fund on the borrowing date, (f) the
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 (g) 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 `40 Act and the Fund's prospectus. Custodian shall
deliver on the borrowing date specified in a Certificate the specified
collateral against payment 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 Certificate. 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. Custodian shall deliver such Securities as additional
collateral as may be specified in a Certificate to collateralize further any
transaction described in this Section. The Fund shall cause all Securities
released from collateral status to be returned directly to Custodian, and
Custodian shall receive from time to time such return of collateral as may be
tendered to it. In the event that the Fund fails to specify in a Certificate
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
Custodian, Custodian shall not be under any obligation to deliver any
Securities.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund
("Shares") it shall deliver to Custodian a Certificate or Instructions
specifying the amount of money and/or Securities to be received by Custodian
for the sale of such Shares and specifically allocated to an Account for such
Series.
2. Upon receipt of such money, Custodian shall credit such money to
an Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires
Custodian to make payment out of the money held by Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to Custodian (a)
a resolution of the Fund's board directing the Fund's transfer agent to redeem
the Shares, and (b) a Certificate or Instructions specifying the total amount
to be paid for such Shares. Custodian shall make payment of such total amount
to the transfer agent specified in such Certificate or Instructions out of the
money held in an Account of the appropriate Series.
ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or
distribution on Shares it shall furnish to Custodian Instructions or a
Certificate setting forth with respect to the Series specified therein the
date of the declaration of such dividend or distribution, the total amount
payable, and the payment date.
2. Upon the payment date specified in such Instructions or
Certificate, Custodian shall pay out of the money held for the account of such
Series the total amount payable to the dividend agent of the Fund specified
therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees (collectively, "Losses"), incurred
by or asserted against the Fund, except those Losses arising out of
Custodian's own negligence or willful misconduct. Custodian shall have no
liability whatsoever for the action or inaction of any Depositories, or,
except to the extent such action or inaction is a direct result of the
Custodian's failure to fulfill its duties hereunder, of any Foreign
Depositories. With respect to any Losses incurred by the Fund as a result of
the acts or any failures to act by any Subcustodian (other than a BNY
Affiliate), Custodian shall take appropriate action to recover such Losses
from such Subcustodian; and Custodian's sole responsibility and liability to
the Fund shall be limited to amounts so received from such Subcustodian
(exclusive of costs and expenses incurred by Custodian). In no event shall
Custodian be liable to the Fund or any third party for special, indirect or
consequential damages, or lost profits or loss of business, arising in
connection with this Agreement, nor shall BNY or any Subcustodian be liable:
(i) for acting in accordance with any Certificate actually received by
Custodian and reasonably believed by Custodian to be given by an Authorized
Person; (ii) for acting in accordance with Instructions without reviewing the
same; (iii) for conclusively presuming that all Instructions are given only by
person(s) duly authorized; (iv) for conclusively presuming that all
disbursements of cash directed by the Fund, whether by a Certificate, or an
Instruction, are in accordance with Section 2(j) of Article II hereof; (v) for
holding property in any particular country, including, but not limited to,
Losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; exchange or
currency controls or restrictions, devaluations or fluctuations; availability
of cash or Securities or market conditions which prevent the transfer of
property or execution of Securities transactions or affect the value of
property; (vi) for any Losses due to forces beyond the control of Custodian,
including without limitation strikes, work stoppages, acts of war or
terrorism, insurrection, revolution, nuclear or natural catastrophes or acts
of God, or interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services; (vii) for the insolvency of any
Subcustodian (other than a BNY Affiliate), any Depository, or, except to the
extent such action or inaction is a direct result of the Custodian's failure
to fulfill its duties hereunder, any Foreign Depository; or (viii) for any
Losses arising from the applicability of any law or regulation now or
hereafter in effect, or from the occurrence of any event, including, without
limitation, implementation or adoption of any rules or procedures of a Foreign
Depository, which may affect, limit, prevent or impose costs or burdens on,
the transferability, convertibility, or availability of any currency or
Composite Currency Unit in any country or on the transfer of any Securities,
and in no event shall Custodian be obligated to substitute another currency
for a currency (including a currency that is a component of a Composite
Currency Unit) whose transferability, convertibility or availability has been
affected, limited, or prevented by such law, regulation or event, and to the
extent that any such law, regulation or event imposes a cost or charge upon
Custodian in relation to the transferability, convertibility, or availability
of any cash currency or Composite Currency Unit, such cost or charge shall be
for the account of the Fund, and Custodian may treat any account denominated
in an affected currency as a group of separate accounts denominated in the
relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms and
conditions as it deems necessary or appropriate to perform its services
hereunder. No such subcontract, agreement or understanding shall discharge
Custodian from its obligations hereunder.
(c) The Fund agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a successful
defense of claims by the Fund; provided however, that the Fund shall not
indemnify Custodian for those Losses arising out of Custodian's own negligence
or willful misconduct. This indemnity shall be a continuing obligation of the
Fund, its successors and assigns, notwithstanding the termination of this
Agreement.
2. Without limiting the generality of the foregoing, Custodian shall
be under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a result
of the receipt or acceptance of fraudulent, forged or invalid Securities, or
Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(c) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(d) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor shall
Custodian be under any duty or obligation to see to it that any cash or
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 is
adequate security for the Fund against any loss it might sustain as a result
of such loan, which duty or obligation shall be the sole responsibility of the
Fund. In addition, Custodian shall be under no duty or obligation to see that
any broker, dealer or financial institution to which portfolio Securities of
the Fund are lent makes payment to it of any dividends or interest which are
payable to or for the account of the Fund during the period of such loan or at
the termination of such loan, provided, however that Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid and
received when due;
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Special Account in connection with transactions by the
Fund; whether any broker, dealer, futures commission merchant or clearing
member makes payment to the Fund of any variation margin payment or similar
payment which the Fund may be entitled to receive from such broker, dealer,
futures commission merchant or clearing member, or whether any payment
received by Custodian from any broker, dealer, futures commission merchant or
clearing member is the amount the Fund is entitled to receive, or to notify
the Fund of Custodian's receipt or non-receipt of any such payment; or
(h) Whether any Securities at any time delivered to, or held by it or
by any Subcustodian, for the account of the Fund and specifically allocated to
a Series are such as properly may be held by the Fund or such Series under the
provisions of its then current prospectus and statement of additional
information, or to ascertain whether any transactions by the Fund, whether or
not involving Custodian, are such transactions as may properly be engaged in
by the Fund.
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice.
4. Custodian shall be under no obligation to take action to collect
any amount payable on Securities in default, or if payment is refused after
due demand and presentment.
5. Custodian shall have no duty or responsibility to inquire into,
make recommendations, supervise, or determine the suitability of any
transactions affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with the conversion of the
Fund's Securities hereunder and the transfer of Securities and records kept in
connection with this Agreement. The Fund shall also reimburse Custodian for
out-of-pocket expenses which are a normal incident of the services provided
hereunder.
7. Custodian has the right to debit any cash account for any amount
payable by the Fund in connection with any and all obligations of the Fund to
Custodian. In addition to the rights of Custodian under applicable law and
other agreements, at any time when the Fund shall not have honored any of its
obligations to Custodian, Custodian shall have the right, if the Fund has not
satisfied its obligations to the Custodian within five business days after
receiving written notice of any failure to do so, to retain or set-off,
against such obligations of the Fund, any Securities or cash Custodian or a
BNY Affiliate may directly or indirectly hold for the account of the Fund, and
any obligations (whether matured or unmatured) that Custodian or a BNY
Affiliate may have to the Fund in any currency or Composite Currency Unit. Any
such asset of, or obligation to, the Fund may be transferred to Custodian and
any BNY Affiliate in order to effect the above rights.
8. If the Fund elects to transmit Instructions through an on-line
communications system offered by Custodian, the Fund's use thereof shall be
subject to the Terms and Conditions attached as Appendix I hereto, and
Custodian shall provide user and authorization codes, passwords and
authentication keys only to an Authorized Person or a person reasonably
believed by Custodian to be an Authorized Person.
9. The books and records pertaining to the Fund which are in
possession of Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the `40 Act and the
rules thereunder. The Fund, or its authorized representatives, shall have
access to such books and records during Custodian's normal business hours.
Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by Custodian to the Fund or its authorized representative.
Upon the reasonable request of the Fund, Custodian shall provide in hard copy
or on computer disc any records included in any such delivery which are
maintained by Custodian on a computer disc, or are similarly maintained.
10. It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law, regulation or
rule now or hereafter in effect. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal accounting control
of a Depository, and with such reports on its own system of internal
accounting control as the Fund may reasonably request from time to time.
11. In no event shall Custodian be required to accept or act upon any
oral instructions; regardless of the circumstances.
12. 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 against Custodian in
connection with this Agreement.
ARTICLE IX
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 thirty (30) days after the date of
giving of such notice. In the event such notice is given by the Fund, it shall
be accompanied by a copy of a resolution of the board of the Fund, 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
Custodian, the Fund shall, on or before the termination date, deliver to
Custodian a copy of a resolution of the board of the Fund, certified by the
Secretary or any Assistant Secretary, designating a successor custodian or
custodians. In the absence of such designation by the Fund, 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
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 money then owned by the Fund and held by it as Custodian, after
deducting all fees, 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 Fund or
Custodian in accordance with the preceding Section, the Fund shall upon the
date specified in the notice of termination of this Agreement and upon the
delivery by Custodian of all Securities (other than Securities which cannot be
delivered to the Fund) and money then owned by the Fund be deemed to be its
own custodian and Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect
to Securities which cannot be delivered to the Fund to hold such Securities
hereunder in accordance with this Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Certificates or Oral Instructions of such present
Authorized Persons.
2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as 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 Fund shall be sufficiently given if
addressed to the Fund and received by it at its offices at 1065 Avenue of the
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, or at
such other place as the Fund may from time to time designate in writing.
4. Each and every right granted to either party hereunder or under
any other document delivered hereunder or in connection herewith, or allowed
it by law or equity, shall be cumulative and may be exercised from time to
time. No failure on the part of either party to exercise, and no delay in
exercising, any right will operate as a waiver thereof, nor will any single or
partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any exclusive jurisdiction, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected thereby. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties, except that
any amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. 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 either party without the written consent
of the other.
6. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of laws
principles thereof. The Fund and Custodian hereby consent to the jurisdiction
of a state or federal court situated in New York City, New York in connection
with any dispute arising hereunder. The Fund hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in such a
court and any claim that such proceeding brought in such a court has been
brought in an inconvenient forum. The Fund and Custodian each hereby
irrevocably waives any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement.
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 instrument.
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement
to be executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
ADVENT CLAYMORE GLOBAL TOTAL RETURN FUND
By:
--------------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and
acting Secretary of Advent Claymore Convertible Securities and Income Fund
(the "Fund"), and further certifies that the following officers or employees
of the Fund have been duly authorized in conformity with the Fund's
Declaration of Trust and By-Laws to deliver Certificates to The Bank of New
York ("Custodian") pursuant to the Custody Agreement between the Fund and
Custodian dated as of May 2, 2003, and that the signatures appearing opposite
their names are true and correct:
Name Position Signature
President and
Xxxxx X. Xxxxxxxx Chief Executive Officer ----------------------
Xxxx Xxxxxx Secretary ----------------------
Treasurer and
Xxxx Xxxxxxxxx Chief Financial Officer ----------------------
Xxx Xxxx Vice President ----------------------
Vice President and
F. Xxxxx Xxxxxx Assistant Secretary ----------------------
Employee of
Xxxxxx Xxxxxx Investment Manager ----------------------
Xxxx Xxxxxxxxxxx Employee of Advisor ----------------------
This certificate supersedes any certificate of Authorized Persons you
may currently have on file.
[seal] By:
----------------------------
Name: Xxxx Xxxxxx
Title: Secretary
Date: May 2, 2003
SCHEDULE II
SERIES
Common Shares - Advent Claymore Global Total Return Fund
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person the Fund of
software enabling the Fund to obtain access to the System (the "Software"),
Custodian grants to the Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Written
Instructions, receiving reports, making inquiries or otherwise communicating
with Custodian in connection with the Account(s). The Fund shall use the
Software solely for its own internal and proper business purposes and not in
the operation of a service bureau. Except as set forth herein, no license or
right of any kind is granted to the Fund with respect to the Software. The
Fund acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know-how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or
other statutory or legal protections available in respect thereof. The Fund
further acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by Custodian or its
suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall you attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy,
sell, lease or provide, directly or indirectly, any of the Software or any
portion thereof to any other person or entity without Custodian's prior
written consent. The Fund may not remove any statutory copyright notice or
other notice included in the Software or on any media containing the Software.
The Fund shall reproduce any such notice on any reproduction of the Software
and shall add any statutory copyright notice or other notice to the Software
or media upon Custodian's request.
2. Equipment. The Fund 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 Software and obtain
access to the System, and Custodian shall not be responsible for the
reliability or availability of any such equipment or services.
3. Proprietary Information. The Software, any data base and any
proprietary data, processes, information and documentation made available to
the Fund (other than 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 Custodian or
its suppliers. The Fund shall keep the Information confidential by using the
same care and discretion that the Fund uses with respect to its own
confidential property and trade secrets, but not less than reasonable care.
Upon termination of the Agreement or the Software license granted herein for
any reason, the Fund shall return to Custodian any and all copies of the
Information which are in its possession or under its control.
4. Modifications. Custodian reserves the right to modify the Software
from time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and
whether with or without Custodian's consent, shall become the property of
Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS
AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE
SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY
DATABASE ARE PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE
LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL,
WHICH THE FUND MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY
DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE
LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION,
INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR
ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.
6. Security; Reliance; Unauthorized Use. The Fund will cause all
persons utilizing the Software and System to treat all applicable user and
authorization codes, passwords and authentication keys with extreme care, and
it will establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian is hereby irrevocably authorized to act in accordance with and rely
on Instructions received by it through the System. The Fund acknowledges that
it is its sole responsibility to assure that only persons duly authorized use
the System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. System Acknowledgments. Custodian shall acknowledge through the
System its receipt of each transmission communicated through the System, and
in the absence of such acknowledgment Custodian shall not be liable for any
failure to act in accordance with such transmission and the Fund may not claim
that such transmission was received by Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY
UNITED STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT,
TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR
TO ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE
OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN
ACCORDANCE WITH THE EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO
U.S. LAW IS PROHIBITED. The Fund hereby authorizes Custodian to report its
name and address to government agencies to which Custodian is required to
provide such information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may
not be available for every communication through the System, or for all data.
The Fund agrees that Custodian may deactivate any encryption features at any
time, without notice or liability to the Fund, for the purpose of maintaining,
repairing or troubleshooting the System or the Software.