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Exhibit 8
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Custody Agreement with
The Bank of New York and
Schedule of Remuneration
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CUSTODY AGREEMENT
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Agreement made as of this 12th day of May, 1993, between The Walnut Street
Funds, Inc., a corporation organized and existing under the laws of the State of
Maryland having its principal office and place of business at
(hereinafter called the "Company"), 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 :
"WHEREAS, the Company is an investment company registered under the
Investment Company Act of 1940, as amended, that invests and reinvests, on
behalf of its Series, in Securities,
WHEREAS, the Custodian is, and has represented to the Company that the
Custodian is, a "bank" as that term is defined in Section 2(a)(5) of the
Investment Company Act of 1940, as amended, and is eligible to receive and
maintain custody of investment company assets pursuant to Section 17(f)
thereunder,
WHEREAS, the Company and the Custodian desire to provide for the
retention of the Custodian as a custodian of the assets of the Company's
initial Series, THE WALNUT STREET PRIME RESERVE FUND, and all other Series
subsequently established by the Company, on the terms and subject to the
provisions set forth herein."
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Company 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. "Bank Officer" shall mean those officers or employees of the
Custodian listed from time to time on Schedule II, or the last revision
thereto received by the Company, who are authorized to sign hereunder for
and on behalf of the Custodian.
2. "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.
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3. "Call 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 payment of
the exercise price, as specified therein, to purchase from the writer thereof
the specified underlying Securities.
4. "Certificate" shall mean any notice, instruction, or other
instrument in writing, including without limitation any letter, memorandum
or telecopy facsimile of any of the foregoing, authorized or required by this
Agreement to be given to the Custodian which is actually received by the
Custodian and signed on behalf of the Company by any two Officers, and the
term Certificate shall also include instructions by the Company to the
Custodian communicated by a Terminal Link.
5. "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.
6. "Collateral Account" shall mean a segregated account so denominated
which is specifically allocated to a Series and pledged to the Custodian as
security for, and in consideration of, the Custodian's issuance of (a) any
Put Option guarantee letter or similar document described in paragraph 8 of
Article V herein, or (b) any receipt described in Article V or VIII herein.
7. "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.
8. "Depository" shall mean The Depository Trust 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 Company's Board of Directors specifically
approving deposits therein by the Custodian.
9. "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.
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10. "Futures Contract" shall mean a Financial Futures Contract and/or
Stock Index Futures Contracts.
11. "Futures Contract Option" shall mean an option with respect to a
Futures Contract.
12. "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 Company for the benefit of a broker, dealer, futures commission
merchant, or Clearing Member, or otherwise, in accordance with an agreement
between the Company, 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 Company shall be deposited and withdrawn from time to time in
connection with such transactions as the Company 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.
13. "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, where
the purchase and sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale.
14. "O.C.C." shall mean the Options Clearing Corporation, a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934,
its successor or successors, and its nominee or nominees.
15. "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 Company, duly authorized
by the Board of Directors of the Company to execute any Certificate,
instruction, notice or other instrument on behalf of the Company and listed
in the Certificate annexed hereto as Appendix A or such other Certificate
as may be received by the Custodian from time to time.
16. "Option" shall mean a Call Option, Covered Call Option, Stock
Index Option and/or a Put Option.
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17. "Oral Instructions" shall mean verbal instructions actually received
by the Custodian from an Officer or from a person reasonably believed by
the Custodian to be an Officer.
18. "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.
19. "Reverse Repurchase Agreement" shall mean an agreement pursuant to
which the Company sells Securities and agrees to repurchase such Securities
at a described or specified date and price.
20. "Security" shall be deemed to include, without limitation, Money
Market Securities, 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), bonds, debentures, notes, mortgages or other
obligations, 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.
21. "Senior Security 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 Company specifically
allocated to such Series shall be deposited and withdrawn from time to time
in accordance with Certificates received by the Custodian in connection with
such transactions as the Company may from time to time determine.
22. "Series" shall mean the various portfolios, if any, of the Company
as described from time to time in the current and effective prospectus for the
Company.
23. "Shares" shall mean the shares of capital stock of the Company, each
of which is, in the case of a Company having Series, allocated to a particular
Series.
24. "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
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stock index at the close of the last business day of the contract and the
price at which the futures contract is originally struck.
25. "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.
26. "Terminal Link" shall mean an electronic data transmission link
between the Company and the Custodian requiring in connection with each use
of the Terminal Link by or on behalf of the Company use of an authorization
code provided by the Custodian and at least two access codes established by
the Company.
ARTICLE II.
APPOINTMENT OF CUSTODIAN
1. The Company hereby constitutes and appoints the Custodian as
custodian of the Securities and moneys at any time owned by the Company
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 Company 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 the Series separate
and apart. 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 on the Company's behalf where such credits have been
previously made and moneys are not finally collected. The Company shall deliver
to the Custodian a certified resolution of the Board of Directors of the
Company, 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
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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 Company
shall deliver to the Custodian a certified resolution of the Board of Directors
of the Company, 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 Certificate 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. Prior to the Custodian's accepting, utilizing and acting with respect
to Clearing Member confirmations for Options and transactions in Options for a
Series as provided in this Agreement, the Custodian shall have received a
certified resolution of the Company's Board of Directors, 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
Certificate 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 Company 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 Certificates 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, provided the
Custodian has sent an invoice to the Company at least ten calendar days prior
thereto.
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3. Promptly after the close of business on each day, the Custodian
shall furnish the Company with confirmations and a summary, on a per Series
basis, of all transfers to or from the account of the Company for a Series,
either hereunder or with any co-custodian or sub-custodian appointed in
accordance with this Agreement during said day. Where Securities are
transferred to the account of the Company 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) 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 Company with a
detailed statement, on a per Series basis, of the Securities and moneys held
by the Custodian for the Company.
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 Company,
in the name of any duly appointed registered nominee of the Custodian 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 Company 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 Company. 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 Certificate, 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 Company hereunder in accordance with preceding
paragraph 4:
(a) Collect on a timely basis 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 Company;
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(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;
(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;
(g) endorse and deposit for collection checks or other orders for
payment of money on behalf of the Company; and
(h) subject to paragraph 6 of Article XVII, do all other things
necessary or proper in connection with the receipt and collection of any
such items.
6. Upon receipt of a Certificate 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
Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Company as owner of any Securities held by the
Custodian hereunder for the Series specified in such Certificate may be
exercised;
(b) Deliver any Securities held by the Custodian hereunder for the
Series specified in such Certificate 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 Certificate 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;
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(d) Make such transfers or exchanges of the assets of the Series
specified in such Certificate, and take such other steps as shall be stated
in such Certificate to be for the purpose of effectuating any duly authorized
plan of liquidation, reorganization, merger, consolidation or recapitalization
of the Company; 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 Certificate.
7. Notwithstanding any provision elsewhere contained herein, the
Custodian shall not be required to obtain possession of any instrument or
certificate representing any Futures Contract, any Option, or any Futures
Contract Option until after it shall have determined, or shall have received
a Certificate from the Company stating, that any such instruments or
certificates are available. The Company shall deliver to the Custodian such
a Certificate 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 Futures Contracts, Options, or Futures Contract Options by making
payments or deliveries specified in Certificates 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 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 Company, 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 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 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.
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8. The Custodian shall forward to the Company copies of all information
or documents the Custodian may receive with respect to Securities held by it
under this Agreement or which, in the opinion of the Custodian, are intended
for the beneficial owner of the Securities including, without limitation, all
proxies and other authorizations properly executed in blank and all proxy
statements, offering circulars, notices, and reports. Neither the Custodian
nor its nominees or agents shall vote or authorize the voting of, any
Securities or give any consent, approval or waiver with respect to proxies,
offering circulars and reports, except as directed by Certificates. Where
warrants, options, tenders or other Securities have fixed expiration dates,
the Company understands that, in order for the Custodian to act, the Custodian
must receive the Company's instructions by no later than noon at least two (2)
business days prior to the last scheduled date to act (or such earlier time or
date as the Custodian may notify the Company). Absent the Custodian's timely
receipt of such instructions, the Custodian shall not be liable if such
instruments expire, nor shall the Custodian have any liability arising out of
or related to any failure by any Depository, the Book-Entry Systems or any
issuer to provide such information to the Custodian, either on a timely basis
or otherwise.
ARTICLE IV.
PURCHASE AND SALE OF INVESTMENTS OF THE COMPANY
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the Company, other
than a purchase of an Option, a Futures Contract, or a Futures Contract
Option, the Company shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, a Certificate,
respect to each purchase of Money Market Securities, a Certificate or Oral
Instructions, specifying with respect to each such purchase: (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 Company,
pay to the broker specified in the Certificate 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
Certificate or Oral Instructions.
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2. Promptly after each sale of Securities by the Company, other than a
sale of any Option, Futures Contract, Futures Contract Option, or any
Reverse Repurchase Agreement, the Company shall deliver to the Custodian (i)
with respect to each sale of Securities which are not Money Market Securities,
a Certificate, and (ii) with respect to each sale of Money Market Securities,
a Certificate or Oral Instructions, specifying with respect to each such
sale: (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 Company
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 Certificate against payment of the total amount payable
to the Company upon such sale, provided that the same conforms to the total
amount payable as set forth in such Certificate or Oral Instructions.
ARTICLE V.
OPTIONS
1. Promptly after the purchase of any Option by the Company, the Company
shall deliver to the Custodian a Certificate 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 Company 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
Company, 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 Certificate.
2. Promptly after the sale of any Option purchased by the Company
pursuant to paragraph 1 hereof, the Company shall deliver to the Custodian
a Certificate 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)
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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 Company 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 Company, provided that the same conforms to the total amount payable as
set forth in such Certificate.
3. Promptly after the exercise by the Company of any Call Option
purchased by the Company pursuant to paragraph 1 hereof, the Company shall
deliver to the Custodian a Certificate 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
Company 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 Certificate.
4. Promptly after the exercise by the Company of any Put Option
purchased by the Company pursuant to paragraph 1 hereof, the Company shall
deliver to the Custodian a Certificate 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
Company 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 Company as set forth
in such Certificate.
5. Promptly after the exercise by the Company of any Stock Index Option
purchased by the Company pursuant to paragraph 1 hereof, the Company shall
deliver to the Custodian a Certificate 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
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which such Option relates; (e) the expiration date; (f) the exercise price;
(g) the total amount to be received by the Company in connection with such
exercise; and (h) the Clearing Member from whom such payment is to be received.
Upon receipt of the amount specified therein the Custodian shall credit such
amount to the appropriate Series account of the Company hereunder.
6. Whenever the Company writes a Covered Call Option, the Company shall
promptly deliver to the Custodian a Certificate 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
Company; (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 Certificate 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 Certificate 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 Company, 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 Company and described
in the preceding paragraph of this Article is exercised, the Company shall
promptly deliver to the Custodian a Certificate 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 Company 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 Certificate against payment of the amount to be received
as set forth in such Certificate.
8. Whenever the Company writes a Put Option, the Company shall promptly
deliver to the Custodian a Certificate 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 Company; (f) the date
such Put Option is written; (g) the name
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15
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 Certificate, 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 said
Certificate. 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 Company and described in the
preceding paragraph is exercised, the Company shall promptly deliver to the
Custodian a Certificate 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 Company 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
Certificate as set forth in such Certificate against delivery of such
Securities, and shall make the withdrawals specified in such Certificate.
10. Whenever the Company writes a Stock Index Option, the Company shall
promptly deliver to the Custodian a Certificate 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
Company; (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 Senior
Security Account for such Series; (j) 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 (k) the amount of
cash and/or the amount
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16
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 Certificate, make the deposits, if any, into the Senior
Security Account specified in the Certificate, 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 Certificate, or (2) make the deposits into the Margin Account specified
in the Certificate.
11. Whenever a Stock Index Option written by the Company and described in
the preceding paragraph of this Article is exercised, the Company shall
promptly deliver to the Custodian a Certificate 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;
(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 Senior Security
Account for such Series; and the amount of cash and/or the 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 Certificate the total amount payable, if any, as specified therein.
12. Whenever the Company purchases any Option identical to a previously
written Option described in paragraphs 6, 8 or 10 of this Article in a
transaction expressly designated a "Closing Purchase Transaction" in order to
liquidate its position as a writer of an Option, the Company shall promptly
deliver to the Custodian a Certificate 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 Company; (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, a
specified Margin Account, or the Senior Security Account for such Series.
Upon the Custodian's payment of the premium and the return and/or cancellation
of any receipt issued pursuant to
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17
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 Company
and described in this Article, the Custodian shall delete such Option from
the statements delivered to the Company 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 and/or the Senior Security Account as may be specified in
a Certificate received in connection with such expiration, exercise, or
consummation.
ARTICLE VI.
FUTURES CONTRACTS
1. Whenever the Company shall enter into a Futures Contract, the
Company shall deliver to the Custodian a Certificate 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 Company 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
Senior Security 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
Certificate and deposit in the Senior Security Account for such Series the
amount of cash and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar payment required to be
made by the Company 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.
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(b) Any variation margin payment or similar payment from a broker,
dealer, or futures commission merchant to the Company 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 Company until delivery or settlement is made on such Futures
Contract, the Company shall deliver to the Custodian a Certificate 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 Senior Security Account for such Series.
The Custodian shall make the payment or delivery specified in the Certificate,
and delete such Futures Contract from the statements delivered to the Company
pursuant to paragraph 3 of Article III herein.
4. Whenever the Company shall enter into a Futures Contract to offset a
Futures Contract held by the Custodian hereunder, the Company shall deliver to
the Custodian a Certificate specifying: (a) the items of information required
in a Certificate 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 Certificate and delete the Futures Contract being offset from
the statements delivered to the Company 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 Certificate. 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
Company, the Company shall promptly deliver to the Custodian a Certificate
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 Company
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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 commission
merchant through whom the purchase was made, provided that the same conforms
to the amount set forth in such Certificate.
2. Promptly after the sale of any Futures Contract Option purchased by
the Company pursuant to paragraph 1 hereof, the Company shall promptly deliver
to the Custodian a Certificate specifying with respect to each such sale: (a)
Series to which such Futures Contract Option was 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; (d) the date of sale;
(e) the sale price; (f) the date of settlement; (g) the total amount payable
to the Company upon such sale; and (h) the name of the broker or 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 Company,
provided the same conforms to the total amount payable as set forth in such
Certificate.
3. Whenever a Futures Contract Option purchased by the Company pursuant
to paragraph 1 is exercised by the Company, the Company shall promptly deliver
to the Custodian a Certificate 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 Company;
(g) the amount, if any, to be received by the Company; and (h) the amount of
cash and/or the amount and kind of Securities to be deposited in the Senior
Security 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 Senior Security Account as specified in the
Certificate. 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 Company writes a Futures Contract Option, the Company
shall promptly deliver to the Custodian a Certificate 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
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Futures Contract Option; (d) the expiration date; (e) the exercise price; (f)
the premium to be received by the Company; (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 Senior Security Account for such Series. The Custodian shall,
upon receipt of the premium specified in the Certificate, make out of the
moneys and Securities specifically allocated to such Series the deposits into
the Senior Security Account, if any, as specified in the Certificate. 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 Company which is a
call is exercised, the Company shall promptly deliver to the Custodian a
Certificate 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 Company upon such exercise; (f) the net total amount, if
any, payable by the Company upon such exercise; and (g) the amount of cash
and/or the amount and kind of Securities to be deposited in the Senior Security
Account for such Series. The Custodian shall, upon its receipt of the net
total amount payable to the Company, if any, specified in such Certificate
make the payments, if any, and the deposits, if any, into the Senior Security
Account as specified in the Certificate. 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 Company
and which is a put is exercised, the Company shall promptly deliver to the
Custodian a Certificate 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 Company upon such exercise; (f) the net total amount, if any,
payable by the Company upon such exercise; and (g) the amount and kind of
Securities and/or cash to be withdrawn from or deposited in, the Senior Security
Account for such Series, if any. The Custodian shall, upon its receipt of the
net total amount payable to the Company, if any, specified in the Certificate,
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 Certificate. 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.
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7. Whenever the Company 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 Company shall promptly deliver to the Custodian a
Certificate 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 Company; (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 Senior Security Account for such
Series. The Custodian shall effect the withdrawals from the Senior Security
Account specified in the Certificate. 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 Company and described in this Article, the Custodian shall (a) delete
such Futures Contract Option from the statements delivered to the Company
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 Senior Security
Account as may be specified in a Certificate. 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 Company 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 Company, the
Company shall promptly deliver to the Custodian a Certificate 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
Company 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
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any, to be deposited in a Senior Security 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 Company upon such sale, if any, as specified
in the Certificate is held by such broker for the account of the Custodian
(or any nominee of the Custodian) as custodian of the Company, issue a
receipt or make the deposits into the Margin Account and the Senior
Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Company
shall promptly deliver to the Custodian a Certificate 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 Company 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 Senior Security Account; and (j)
the name of the broker through whom the Company is effecting such
closing-out. The Custodian shall, upon receipt of the net total amount
payable to the Company 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 Company to the broker the net total amount payable to the
broker, and make the withdrawals from the Margin Account and the Senior
Security Account, as the same are specified in the Certificate.
ARTICLE IX.
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Company enters a Reverse Repurchase Agreement
with respect to Securities and money held by the Custodian hereunder, the
Company shall deliver to the Custodian a Certicficate, or in the event such
Reverse Repurchase Agreement is a Money Market Security, a Certificate or
Oral Instructions specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Company in
connection with such Reverse Repurchase Agreement and specifically allocated
to such Series; (c) 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 Company to such broker or dealer; (e) the date of such
Reverse Repurchase Agreement; and (f) the amount of cash and/or
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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 Company specified in the
Certificate or Oral Instructions make the delivery to the broker or dealer,
and the deposits, if any, to the Senior Security Account, specified in such
Certificate or Oral Instructions.
2. Upon the termination of a Reverse Repurchase Agreement described
in preceding paragraph 1 of this Article, the Company shall promptly deliver
a Certificate or, in the event such Reverse Repurchase Agreement is a Money
Market Security, a Certificate or Oral Instructions 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
Company in connection with such termination; (c) the amount and kind of
Securities to be received by the Company and specifically allocated to such
Series in connection with such termination; (d) the date of termination; (e)
the name 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 Senior Securities Account for
such Series. The Custodian shall, upon receipt of the amount and kind of
Securities to be received by the Company specified in the Certificate or Oral
Instructions, make the payment to the broker or dealer, and the withdrawals,
if any, from the Senior Security Account, specified in such Certificate or
Oral Instructions.
ARTICLE X.
LOAN OF PORTFOLIO SECURITIES OF THE COMPANY
1. Promptly after each loan of portfolio Securities specifically
allocated to a Series held by the Custodian hereunder, the Company shall
deliver or cause to be delivered to the Custodian a Certificate 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 in accordance with
the customs prevailing among dealers in securities.
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2. Promptly after each termination of the loan of Securities by the
Company, the Company shall deliver or cause to be delivered to the Custodian
a Certificate 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 Certificate, 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 Company, the total amount payable upon such
return of Securities as set forth in the Certificate.
ARTICLE XI.
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to, or
withdrawals from, a Senior Security Account as specified in a Certificate
received by the Custodian. Such Certificate shall specify the Series for
which such deposit or withdrawal is to be made and the amount of cash and/or
the amount and kind of Securities specifically allocated to such Series to be
deposited in, or withdrawn from, such Senior Security Account for such
Series. In the event that the Company fails to specify in a Certificate the
Series, the name of the issuer, the title and the number of shares or the
principal amount of any particular Securities to be deposited by the
Custodian into, or withdrawn from, a Senior Securities Account, the Custodian
shall be under no obligation to make any such deposit or withdrawal and shall
so notify the Company.
2. 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.
3. 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 Margin Account
Agreement.
4. 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 the Custodian may
enforce its lien
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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 Company within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish the Company 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 Company with respect to such Margin Account.
6. 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 Company 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 Company of such statement, the Company shall
furnish to the Custodian a Certificate 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 Company
shall promptly specify in a Certificate 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 Company shall furnish to the Custodian a copy of the
resolution of the Board of Directors of the Company, 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 Company 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 Oral
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Instructions or a Certificate 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, Oral
Instructions or Certificate, 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
Company with respect to such Series.
ARTICLE XIII.
SALE AND REDEMPTION OF SHARES
1. Whenever the Company shall sell any Shares, it shall deliver to
the Custodian a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade date, and price; and
(b) 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 Company in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Company 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 Certificate 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
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Transfer Agent out of the moneys held in the separate account in the name
of the Series the total amount specified in the Certificate 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 Company, the
Custodian, unless otherwise instructed by a Certificate, shall, upon receipt
of an advice from the Company 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 Certificate or Oral Instructions,
or which results in an overdraft in the separate account of such Series for
some other reason, or if the Company is for any other reason indebted to the
Custodian with respect to a Series, including any indebtedness to The Bank of
New York under the Company'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 paragraph 2 of this Article), such overdraft or
indebtedness shall be deemed to be a loan made by the Custodian to the
Company 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 1/2% over Custodian's prime commercial
lending rate in effect from time to time, such rate to be adjusted on the
effective date of any change in such prime commercial lending rate but in no
event to be less than 6% per annum. In addition, the Company hereby agrees
that the Custodian shall have a continuing lien and security interest in and
to any property specifically allocated to such Series at any time held by it
for the benefit of such Series or in which the Company 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 Company
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 Company hereby covenants that on each Business Day on which
either it
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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 Company had outstanding a Reverse Repurchase
Agreement or such a borrowing, it shall prior to 9 a.m., New York City time,
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 Company 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 Company against delivery of a stated amount of collateral. The Company
shall promptly deliver to the 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 and terms of the borrowing, which may be
set forth by incorporating by reference an attached promissory note, duly
endorsed by the Company, 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 Company 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 Company's prospectus. The
Custodian shall deliver on the borrowing date specified in a Certificate 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 Certificate. 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 Certificate to collateralize further any
transaction described in this paragraph. The Company 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 Company 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 the Custodian, the Custodian shall not be under
any obligation to deliver any Securities.
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ARTICLE XV.
TERMINAL LINK
1. At no time and under no circumstances shall the Company be
obligated to have or utilize the Terminal Link, and the provisions of this
Article shall apply if, but only if, the Company in its sole and absolute
discretion elects to utilize the Terminal Link to transmit Certificates to
the Custodian.
2. The Terminal Link shall be utilized by the Company only for the
purpose of the Company providing Certificates 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 Company
Shares, and shall be utilized by the Custodian only for the purpose of
providing notices to the Company. Such use shall commence only after the
Company shall have delivered to the Custodian a Certificate substantially in
the form of Exhibit D and shall have established access codes. Each use of
the Terminal Link by the Company 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 Company, and that
such use does not contravene the Investment Company Act of 1940, as amended,
or the rules or regulations thereunder.
3. The Company 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 Company 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 Company 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 Company
shall return to the Custodian any and all copies of the Information which are
in the Company's possession or under its control, or which the Company
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.
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30
6. The Custodian reserves the right to modify the Terminal Link from
time to time without notice to the Company except that the Custodian shall
give the Company notice not less than 75 days in advance of any modification
which would materially adversely affect the Company's operation, and the
Company agrees that the Company shall not modify or attempt to modify the
Terminal Link without the Custodian's prior written consent. The Company
acknowledges that any software or procedures provided the Company as part of
the Terminal Link are the property of the Custodian and, accordingly, the
Company agrees that any modifications to the Terminal Link, whether by the
Company, 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 Company 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 Company 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 Certificates received by it through the Terminal Link. The
Company 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 Company'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 $25,000 provided,
however, that the Custodian shall have no liability under this Section 9 if
the Company fails to comply with the provisions of Section 11.
9(b). The Custodian's liability for its negligence in executing or
failing to execute a transfer of funds in accordance with a Certificate
received through Terminal Link shall arise only if such Certificate shall
have been duly acknowledged by the Custodian, and shall be contingent upon
the Company complying with the provisions of Section 12 of this Article, and
shall be limited to (i) restoration of the principal amount mistransferred,
if and to the extent that the Custodian would be required to make such
restoration under applicable law, and (ii) the lesser of (A) a Fund's actual
pecuniary loss incurred by
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reason of its loss of use of the mistransferred funds or the funds which
were not transferred, as the case may be, or (B) compensation for the loss
of the use of the mistransferred funds or the funds which were not
transferred, as the case may be, at a rate per annum equal to the average
federal funds rate as computed from the Federal Reserve Bank of New York's
daily determination of the effective rate for federal funds, for
the period during which a Company has lost use of such funds. In no event
shall the Custodian have any liability for failing to execute in accordance
with a Certificate a transfer of funds where the Certificate is received by
the Custodian through Terminal Link other than through the applicable
transfer module for the particular instructions contained in such
Certificate.
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
Company 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 Company 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 through the exercise of reasonable care 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 Company
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 Company, by use of the Terminal
Link, receipt of each Certificate the Custodian receives through the Terminal
Link, and in the absence of such verification the Custodian shall not be
liable for any failure to act in accordance with such Certificate and the
Company may not claim that such Certificate was received by the Custodian.
Such verification, which may occur after the Custodian has acted upon such
Certificate, shall be accomplished on the same day on which such Certificate
is received.
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ARTICLE XVI.
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1. The Custodian is authorized and instructed to employ, as
sub-custodian for each Series' Foreign Securities (as such term is defined in
paragraph (c)(1) of Rule 17f-5 under the Investment Company Act of 1940, as
amended) and other assets, the foreign banking institutions and foreign
securities depositories and clearing agencies designated on Schedule I hereto
("Foreign Sub-Custodians") to carry out their respective responsibilities in
accordance with the terms of the sub-custodian agreement between each such
Foreign Sub-Custodian and the Custodian, copies of which have been previously
delivered to the Company and receipt of which is hereby acknowledged (each
such agreement, a "Foreign Sub-Custodian Agreement"). The Custodian shall be
liable for the acts and omissions of each Foreign Sub-Custodian constituting
negligence or willful misconduct in the conduct of its responsibilities under
the terms of the Foreign Sub-Custodian Agreement. Upon receipt of a
Certificate, together with a certified resolution substantially in the form
attached as Exhibit E of the Company's Board of Directors, the Company may
designate any additional foreign sub-custodian with which the Custodian has an
agreement for such entity to act as the Custodian's agent, as its
sub-custodian and any such additional foreign sub-custodian shall be deemed
added to Schedule I. Upon receipt of a Certificate from the Company, the
Custodian shall cease the employment of any one or more Foreign Sub-Custodians
for maintaining custody of the Company's assets and such Foreign Sub-Custodian
shall be deemed deleted from Schedule I.
2. Each Foreign Sub-Custodian Agreement shall be substantially in
the form previously delivered to the Company and will not be amended in a way
that materially adversely affects the Company without the Company's prior
written consent.
3. The Custodian shall identify on its books as belonging to each
Series of the Company the Foreign Securities of such Series held by each
Foreign Sub-Custodian. At the election of the Company, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claims by the Company or any Series against a Foreign Sub-Custodian as a
consequence of any loss, damage, cost, expense, liability or claim sustained
or incurred by the Company or any Series if and to the extent that the
Company or such Series has not been made whole for any such loss, damage,
cost, expense, liability or claim.
4. Upon request of the Company, the Custodian will, consistent with
the terms of the applicable Foreign Sub-Custodian Agreement, use reasonable
efforts to arrange for the independent accountants of the Company to be
afforded access to
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the books and records of any Foreign Sub-Custodian insofar as such books and
records relate to the performance of such Foreign Sub-Custodian under its
agreement with the Custodian on behalf of the Company.
5. The Custodian will supply to the Company from time to time, as
mutually agreed upon, statements in respect of the securities and other
assets of each Series held by Foreign Sub-Custodians, including but not
limited to, an identification of entities having possession of each Series'
Foreign Securities and other assets, and advices or notifications of any
transfers of Foreign Securities to or from each custodial account maintained
by a Foreign Sub-Custodian for the Custodian on behalf of the Series.
6. The Custodian shall furnish annually to the Company, as mutually
agreed upon, information concerning the Foreign Sub-Custodians employed by
the Custodian. Such information shall be similar in kind and scope to that
furnished to the Company in connection with the Company's initial approval of
such Foreign Sub-Custodians and, in any event, shall include information
pertaining to (i) the Foreign Custodians' financial strength, general
reputation and standing in the countries in which they are located and their
ability to provide the custodial services required, and (ii) whether the
Foreign Sub-Custodians would provide a level of safeguards for safekeeping
and custody of securities not materially different from those prevailing in
the United States. The Custodian shall monitor the general operating
performance of each Foreign Sub-Custodian, and at least annually obtain and
review the annual financial report published by such Foreign Sub-Custodian to
determine that it meets the financial criteria of an "Eligible Foreign
Custodian" under Rule 17f-5(c) (2) (i) or (ii). The Custodian will promptly
inform the Company in the event that the Custodian learns that a Foreign
Sub-Custodian no longer satisfies the financial criteria of an "Eligible
Foreign Custodian" under such Rule. The Custodian agrees that it will use
reasonable care in monitoring compliance by each Foreign Sub-Custodian
Agreement with the terms of the relevant Foreign Sub-Custodian Agreement and
that if it learns of any breach of such Foreign Sub-Custodian agreement
believed by the Custodian to have a material adverse effect on the Company or
any Series it will promptly notify the Company of such breach. The Custodian
also agrees to use reasonable and diligent efforts to enforce its rights
under the relevant Foreign Sub-Custodian Agreement.
7. The Custodian shall transmit promptly to the Company all notices,
reports or other written information received pertaining to the Company's
Foreign Securities, including without limitation, notices of corporate
action, proxies and proxy solicitation materials.
8. Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of any Series
and delivery of securities maintained
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for the account of such Series may be effected in accordance with the
customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of securities to
the purchaser thereof or to a dealer therefor (or agent for such purchaser or
dealer) against a receipt with the expectation of receiving later payment
for such securities from such purchaser or dealer.
ARTICLE XVII.
CONCERNING THE CUSTODIAN AND ITS RESPONSIBILITES
1. Except as hereinafter provided, or as provided in Article XVI
neither the Custodian nor its nomiee 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 Company 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 or the possibility of such damages and regardless of the
form of action. 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 Company, at the expense of the Company,
or of its own counsel, at its own expense, and 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 Company 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 Company, 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
Company;
(d) The legality of any borrowing by the Company using Securities as
collateral;
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(e) The legality of any loan of portfolio Securities, nor shall the
Custodian be under any duty or obligation to see to it 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 Company is adequate collateral for the Company 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 Company that the amount of such cash collateral held by
it for the Company is sufficient collateral for the Company, but such duty or
obligation shall be the sole responsibility of the Company. 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 Company 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 Company
during the period of such loan or at the termination of such loan, provided,
however, that the Custodian shall promptly notify the Company in the event
that such dividends or interest are not paid and received when due; 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 Company. 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
Company of any variation margin payment or similar payment which the
Company may be entitled to receive from such broker, dealer, futures
commission merchant or Clearing Member, to see that any payment to the
Company of any variation margin payment or similar payment received by
the Custodian from any broker, dealer, futures commission merchant or
Clearing Member is the amount the Company is entitled to receive, or to
notify the Company 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
Company until the Custodian actually receives and collects such money
directly or by the final crediting of the account representing the Company'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 from the Depository. 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 of
any amount payable upon Securities deposited in the Depository which may
mature or be redeemed, retired, called
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or otherwise become payable. However, upon receipt of a Certificate from the
Company of an overdue amount on Securities held in the Depository the
Custodian shall make a claim against the Depository on behalf of the Company,
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 Company from the
Transfer Agent of the Company nor to take any action to effect payment or
distribution by the Transfer Agent of the Company of any amount paid by the
Custodian to the Transfer Agent of the Company 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 Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action,
provided, however, that the Custodian shall promptly notify the Company of
any such default or refusal.
7. The Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Article XVI appoint one or more banking institutions
as Depository or Depositories, as Sub-Custodian or Sub-Custodians, or as
Co-Custodian or Co-Custodians including, but not limited to, banking
institutions located in foreign countries, of Securities and moneys at any
time owned by the Company, upon such terms and conditions as may be approved
in a Certificate or contained in an agreement executed by the Custodian, the
Company 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 Company and specifically
allocated to a Series are such as properly may be held by the Company or such
Series under the provisions of its then current prospectus, or (b) to
ascertain whether any transactions by the Company, whether or not involving
the Custodian, are such transactions as may properly be engaged in by the
Company.
9. The Custodian shall be entitled to receive and the Company agrees
to pay the Custodian all out-of-pocket expenses and such compensation as may
be agreed upon from time to time between the Custodian and the Company. The
Custodian may charge such compensation and any expenses with respect to a
Series incurred by the Custodian in the performance of its duties
- 35 -
37
pursuant to such agreement against any money specifically allocated to such
Series. Unless and until the Company instructs the Custodian by a Certificate
to apportion any loss, damage, liability or expense among the Series in a
specified manner, the Custodian shall also be entitled to charge against any
money held by it for the account of 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 counsel fees, for which it
shall be entitled to reimbursement under the provisions of this Agreement.
The expenses for which the Custodian shall be entitled to reimbursement
hereunder shall include, but are not limited to, the expenses of sub-custodians
and foreign branches of the Custodian incurred in settling outside of New York
City transactions involving the purchase and sale of securities of the Company.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and
reasonably believed by the Custodian to be a Certificate. The Custodian shall
be entitled to rely upon any Oral Instructions actually received by the
Custodian hereinabove provided for. The Company agrees to forward to the
Custodian a Certificate confirming such Oral Instructions in such manner so
that such Certificate is received by the Custodian, whether by hand delivery,
telecopier or other similar device, or otherwise, by the close of business of
the same day that such Oral Instructions are given to the Custodian. The
Comapny 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
Company. The Company agrees that the Custodian shall incur no liability to
the Company in acting upon Oral Instructions 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 Company which are in the
possession of the Custodian shall be the property of the Company. Such books
and records shall be prepared and maintained as required by the Investment
Company Act of 1940, as amended, and other applicable securities laws and
rules and regulations. The Company, or the Company's authorized
representatives, shall have access to such books and records during
- 36 -
38
the Custodian's normal business hours. Upon the reasonable request of the
Company, copies of any such books and records shall be provided by the
Custodian to the Company or the Company's authorized representative, and the
Company shall reimburse the Custodian its expenses of providing such copies.
Upon reasonable request of the Company, the Custodian shall provide in hard
copy or on micro-film, 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 Company shall reimburse the Custodian for
its expenses of providing such hard copy or micro-film.
13. The Custodian shall provide the Company 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., and with such reports on its own
systems of internal accounting control as the Company may reasonably request
from time to time.
14. The Company agrees to indemnify the Custodian against and save
the Custodian harmless from all liability, claims, losses and demands
whatsoever, including attorney's fees, howsoever arising or incurred because
of or in connection with this Agreement, including the Custodian's payment or
nonpayment of checks pursuant to paragraph 6 of Article XIII as part of any
check redemption privilege program of the Company, except for any such
liability, claim, loss and demand arising out of the Custodian's own
negligence, bad faith or willful misconduct. Whenever any claim arises for
indemnification under this Agreement, Custodian shall give prompt notice of
the claim (the "Notice of Claim") to the Company, and, when known, the facts
forming the basis for such claim. If the facts giving rise to a claim for
indemnification shall involve any claim or demand by any third party against
Custodian, the Company shall be entitled (without prejudice to the right of
Custodian to participate at its expense through counsel of its own choosing)
to defend or prosecute such claim at its expense and through counsel of its
own choosing. The Custodian shall cooperate in the defense of the claim, and
Custodian shall not settle or compromise any claim without the prior written
consent of the Company, which consent shall not be unreasonably withheld,
unless suit shall have been instituted against Custodian and the Company has
not, within twenty (20) days after having been given Notice of Claim, assumed
control of such suit as provided in this Section 14.
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 customs prevailing from time to time among brokers or dealers in
such Securities. When the Custodian is instucted to deliver Securities
against payment, delivery of such Securities and receipt of payment therefor
may not be completed simultaneously.
- 37 -
39
The Company assumes all responsibility and liability for all credit risks
involved in connection with the Custodian's delivery of Securities pursuant
to instructions of the Company, 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 or incidental to such duties and responsibilities, 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
Company, it shall be accompanied by a copy of a resolution of the Board
of Directors of the Company, 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 Company
shall, on or before the termination date, deliver to the Custodian a
copy of a resolution of the Board of Directors of the Company, certified
by the Secretary or any Assistant Secretary, designating a successor
custodian or custodians. In the absence of such designation by the Company,
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 Company 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 Company or
the Custodian in accordance with the preceding paragraph, the Company
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 Company) and moneys then owned by the Company 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
- 38 -
40
which cannot be delivered to the Company to hold such Securities hereunder
in accordance with this Agreement.
ARTICLE XIX.
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of
the present Officers of the Company under its corporate seal, setting forth
the names and the signatures of the present Officers of the Company. The
Company agrees to furnish to the Custodian a new Certificate in similar form
in the event any such present Officer ceases to be an Officer of the Company,
or in the event that other or additional Officers are elected or appointed.
Until such new Certificate 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 Certificate.
2. The Company shall have no duties or responsibilities to the
Custodian except such duties or responsibilities as are specifically set
forth in this Agreement or incidental to such duties and responsibilities,
and no covenant or obligation of the Company to the Custodian shall be
implied in this Agreement.
3. 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 or delivered to it at its offices at
00 Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
the Custodian may from time to time designate in writing.
4. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Company shall be sufficiently given
if addressed to the Company and mailed or delivered to it at its office at
the address for the Company first above written, or at such other place as the
Company may from time to time designate in writing.
5. This Agreement may not be amended or modified in any manner 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
Company.
6. 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 Company without
the written consent of the Custodian, or by the Custodian without the
written consent of the Company, authorized or approved by a resolution of
the Company's Board of Directors.
- 39 -
41
7. 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.
8. 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 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.
THE WALNUT STREET FUNDS, INC.
[SEAL] By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Attest:
-----------------------------------
THE BANK OF NEW YORK
[SEAL] By:
------------------------------
Attest:
/s/ Xxxxxxxx X. XxXxxxxxxx
-----------------------------------
- 40 -
42
APPENDIX A
I, , and I, , of
The Walnut Street Funds, Inc., a Maryland corporation (the "Fund"), do
hereby certify that:
The following individuals serve in the following positions with the
Company and each has been duly elected or appointed by the Board of Directors
of the Company to each such position and qualified therefor in conformity with
the Company's Articles of Incorporation and By-Laws, and the signatures set
forth opposite their respective names are their true and correct signatures:
Name Position Signature
--------------------- -------------------- ---------------------
43
APPENDIX B
I, Xxxxxxxx XxXxxxxxxx, an Assistant 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
44
EXHIBIT A
CERTIFICATION
The undersigned, , hereby certifies that
he is the duly elected and acting of The Walnut Street Funds,
Inc., a Maryland corporation (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Directors of the Company at a
meeting duly held on , 1993, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Company dated as of ,
1993, (the "Custody Agreement") is authorized and instructed on a continuous
and ongoing basis to deposit in the Book-Entry System, as defined in the
Custody Agreement, 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
thereunder, including, without limitation, in connection with settlements of
purchases and sales of securities, loans of securities, and deliveries and
returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The
Walnut Street Funds, Inc. as of the day of , 1993.
-----------------------------
[SEAL]
45
EXHIBIT B
CERTIFICATION
The undersigned, , hereby certifies that he
is the duly elected and acting of The Walnut Street Funds, Inc.,
a Maryland corporation (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Directors of the Company at a meeting
duly held on , 1993, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Company dated as of ,
1993, (the "Custody Agreement") is authorized and instructed on a continuous
and ongoing basis until such time as it receives a Certificate, as defined in
the Custody Agreement, to the contrary to deposit in the Depository, as
defined in the Custody Agreement, all securities eligible for deposit
therein, regardless of the Series to which the same are specifically
allocated, and to utilize the Depository to the extent possible in connection
with its performance thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The
Walnut Street Funds, Inc. as of the day of , 1993.
-----------------------------
[SEAL]
46
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby certifies that he
or she is the duly elected and acting of The Walnut Street Funds,
Inc., a Maryland corporation (the "Fund"), and further certifies that the
following resolution was adopted by the Board of Trustees of the Company at a
meeting duly held on , 1993, at which a quorum was at all
times present and that such resolution has not been modified or rescinded and
is in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Company dated as of
, 1993, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody Agreement, to the
contrary to deposit in the Participants Trust Company as Depository, as
defined in the Custody Agreement, all securities eligible for deposit
therein, regardless of the Series to which the same are specifically
allocated, and to utilize the Participants Trust Company to the extent
possible in connection with its performance thereunder, including,
without limitation, in connection with settlements of purchases and
sales of securities, loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The
Walnut Street Funds, Inc. as of the day of , 1993.
-----------------------------
[SEAL]
47
EXHIBIT C
CERTIFICATION
The undersigned, , hereby certifies that he
is the duly elected and acting of The Walnut Street Funds, Inc.,
a Maryland corporation (the "Fund"), and further certifies that the following
resolution was adopted by the Board of Directors of the Company at a meeting
duly held on , 1993, at which a quorum was at all times
present and that such resolution has not been modified or rescinded and is in
full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to a Custody
Agreement between The Bank of New York and the Company dated as of ,
1993, (the "Custody Agreement") is authorized and instructed on a continuous
and ongoing basis until such time as it receives a Certificate, as defined in
the Custody Agreement, to the contrary, to accept, utilize and act with respect
to Clearing Member confirmations for Options and transaction in 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.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of The
Walnut Street Funds, Inc. as of the day of , 1993.
-----------------------------
[SEAL]
48
EXHIBIT D
The undersigned, , hereby certifies that he
or she is the duly elected and acting of The Walnut Street Funds,
Inc., a Maryland corporation (the "Fund"), further certifies that the
following resolutions were adopted by the Board of Directors of the Company at
a meeting duly held on , 1993, at which a quorum was at all
times present and that such resolutions have not been modified or rescinded
and are in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian pursuant to the Custody
Agreement between The Bank of New York and the Company dated as of ,
1993, (the "Custody Agreement") is authorized and instructed on a continuous
and ongoing basis to act in accordance with, and to rely on Certificates (as
defined in the Custody Agreement) given by the Company to the Custodian by a
Terminal Link (as defined in the Custody Agreement).
RESOLVED, that the Company shall establish access codes and grant use
of such access codes only to Officers of the Company 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 Certificate, 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 Company 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 Certificate,
as defined in the Custody Agreement, and the Custodian shall be entitled to
rely upon such advice.
IN WITNESS WHEREOF, I hereunto set my hand and the seal of The
Walnut Street Funds, Inc. as of the day of , 1993.
-----------------------------
[SEAL]
49
EXHIBIT E
The undersigned, , hereby certifies that he
or she is the duly elected and acting of The Walnut Street Funds,
Inc., a Maryland corporation (the "Fund"), further certifies that the
following resolutions were adopted by the Board of Directors of the Fund at
a meeting duly held on , 1993, at which a quorum was at all
times present and that such resolutions have not been modified or rescinded
and are in full force and effect as of the date hereof.
RESOLVED, that the maintenance of the Fund's assets in each country
listed in Schedule I hereto be, and hereby is, approved by the Board of
Directors as consistent with the best interests of the Fund and its
shareholders; and further
RESOLVED, that the maintenance of the Fund's assets with the foreign
branches of The Bank of New York (the "Bank") listed in Schedule I located
in the countries specified therein, and with the foreign subcustodians and
despositories listed in Schedule I located in the countries specified therein
be, and hereby is, approved by the Board of Directors as consistent with the
best interests of the Fund and its shareholders; and further
RESOLVED, that the Subcustodian Agreements presented to this meeting
between the Bank and each of the foreign subcustodians and depositories listed
in Schedule I providing for the maintenance of the Fund's assets with the
applicable entity, be and hereby are, approved by the Board of Directors as
consistent with the best interests of the Fund and its shareholders;
and further
RESOLVED, that the appropriate officers of the Fund are hereby
authorized to place assets of the Fund with the aforementioned foreign
branches and foreign subcustodians and depositories as hereinabove
provided; and further
RESOLVED, that the appropriate officers of the Fund, or any of them,
are authorized to do any and all other acts, in the name of the Fund and on
its behalf, as they, or any of them, may determine to be necessary or
desirable and proper in connection with or in furtherance of the foregoing
resolutions.
IN WITNESS WHEREOF, I hereunto set my hand and the seal of The
Walnut Street Funds, Inc., as of the day of , 1993.
-----------------------------
[SEAL]
50
SCHEDULE I
Bank of New York Branches
and
Eligible Foreign Custodians
Country Bank Name and Address Status
------- --------------------- -------------
Argentina The First National Bank of Boston Xxxxxxxxxxxxx
Xxxxxxx 00, 0000 Xxxxxx Xxxxx,
Xxxxxxxxx
Australia Australia and New Zealand Banking Correspondent
Group, Limited
00 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx
Austria GiroCredit Bank Aktiengesellschaft Xxxxxxxxxxxxx
xxx Xxxxxxxxxx
X-0000 Xxxx, Schubertring 0,
Xxxxxx, Xxxxxxx
Xxxxxxx Banque Bruxelles Xxxxxxx, X.X. Correspondent
00 Xxxxxx Xxxxxx,
Xxxxxxxx 0000
Xxxxxxx
Brazil The First National Bank of Boston Correspondent
Xxx Xxxxxx Xxxxxx, 000,
00000 - Xxx - XX (Alt 226)
Brazil
Canada Royal Trust Corporation of Canada Correspondent
00 Xxxx Xxxxxx Xxxx
Xxxxx Trust Tower, Toronto,
Ontario X0X 0X0, Xxxxxx
Denmark Den Danske Bank Correspondent
2-12 Holmens Kanal
DK - 1092 Copenhagen K.
Denmark
Finland Union Bank of Finland Ltd. Correspondent
Xxxxxxxxxxxxxxxx 00,
Xxxxxxxx, Xxxxxxx
Xxxxxx Banque Paribas Correspondent
0 Xxx X'Xxxxx
00000 Xxxxx, Xxxxxx
Germany Dresdner Bank A.G. Correspondent
51
Xxxxxx-Xxxxx-Xxxxx 0 (Xxx 000)
0000 Xxxxxxxxx 00,
Xxxxxxx Xxxxxxxx of Germany
Hong Kong The Hongkong & Shanghai Banking Correspondent
Corporation
0 Xxxxx'x Xxxx Xxxxxxx,
Xxxx Xxxx
Xxxxxxxxx The Hongkong & Shanghai Banking Correspondent
Corporation
X.X. Xxx 0000, Xxxxxxx 0000,
Xxxxxxxxx
Xxxxxxx Allied Irish Bank Xxxxxxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx,
Xxxxxx 0, Xxxxxxx
Italy Citibank, N.A. Correspondent
Foro Buonaparte, 16
1-20121 Milano
Italy
Japan The Yasuda Trust & Banking Correspondent
Company, Limited
0-0 Xxxxx, 0-xxxxx
Xxxx-xx, Xxxxx 000,
Xxxxx
Xxxxx Bank of Seoul Correspondent
00-0, Xxxxxxxxx-Xx 0-Xx
Xxxxx-xx, Xxxxx, 000-000,
Xxxxx
Xxxxxxxxxx Cedel, S.A. Depository
00 Xxxxxxxxx Xxxxxx-Xxxxxxxx
Xxxxxxxxx
X-0000, Xxxxxxxxxx
Malaysia The Hongkong & Shanghai Banking Correspondent
Corporation Ltd.
Kuala Lumpur, Malaysia
Mexico Citibank, N.A. Correspondent
Pasee de la Reforma 390,
Xxxxxx Xxxx, 00000
Xxxxxx
Xxxxxxxxxxx Amsterdam-Rotterdam Bank, N.V. Correspondent
Xxxxxxxxxx 0, 0000 XX Xxxxx
Xxx Xxxxxxxxxxx
52
New Zealand Australia and New Zealand Banking Correspondent
Group Ltd.
000-000 Xxxxxxx Xxxx
P.O. Box 1492
Wellington, 1
New Zealand
Norway Den norske Bank AS Correspondent
Xxxxxxxxxxx 00, 0000 Xxxx 0,
Xxxxxx
Xxxxxxxxxxx The Hongkong and Shanghai Correspondent
Corporation Ltd.
Makti, Metro Manila,
Philippines
Portugal Banco Comercial Portugues (Alt 136) Correspondent
Xxx Xxxxxxx, 00, 0000 Xxxxx,
Xxxxxxxx
Singapore United Overseas Bank Limited Correspondent
0 Xxxxxx Xxxxxx, #00-00,
Xxxxxxxxx
Spain Banco Bilbao Vizcaya, S.A. Correspondent
Xxxxx xx Xxx Xxxxxxxx 0,
Xxxxxx, Xxxxx
Sweden Skandinaviska Enskilda Banken Correspondent
Xxxxxxxxxxxxxxxxxxx 0, (Xxx 000)
Xxxxxxxxx, Xxxxxx
Switzerland Union Bank of Switzerland Correspondent
00 Xxxxxxxxxxxxxx,
Xxxxxx, Xxxxxxxxxxx
Thailand The Siam Commercial Bank, Ltd. Correspondent
0000 Xxxxxxxxxxx Xxxx,
Xxxxxxx 00000, Xxxxxxxx
United The Bank of New York Branch
Kingdom 00 Xxxxxxxx Xxxxxx
Xxxxxx X0X 0XX, Xxxxxxx
Venezuela Citibank, N.A. Correspondent
Carmelitas a Xxxxxxxxxx,
Xxxxxxxx Xxxxxxxx,
Xxxxxxx, 0000, Xxxxxxxxx
53
[letterhead of The Bank of New York]
CUSTODIAN FEE
PER ACCOUNT
FOR
WALNUT STREET FUNDS, INC.
Domestic Custody Fees
---------------------
Safekeeping Fees/Income Collection/Capital Change/Reporting
-----------------------------------------------------------
via LASER
---------
1 basis point per annum on the first $250 million of market value of
portfolio securities.
1/2 basis point per annum on the next $750 million.
1/4 basis point per annum on the excess over $1 billion.
The per annum holding fees are based on the daily net asset value of each
portfolio and will be billed monthly.
No minimum holding fee will apply for the Fund's first year of operation.
Earnings Credit on Balances/Interest Charge for Overdrafts
----------------------------------------------------------
We will pay compensation to the Fund on 85% of the daily available balance
in the domestic custodian account computed at 1/2% below the Federal Funds
rate on the day of the balance.
Overdrafts resulting from a management company error, not bank errors,
will cause a reduction of the earnings credit computed at 1% above the
Federal Funds rate on the day of the overdraft.
Credits and debits will be accumulated daily and the net applied against
the Custodian safekeeping fees. To the extent a net debit is accumulated the
Fund will be charged for the expense in addition to the safekeeping fees.
To the extent a net earnings credit is generated which exceeds the
safekeeping fees, such excess earnings credit can be carried forward to
the next succeeding month, however, no earnings credit will be carried
forward after the end of the calendar year.
Custodian Transaction Charges/Paydowns
--------------------------------------
$12.00 -- Book-entry transactions - DTC/FRB/PTC
$25.00 -- Physical settlements
54
[letterhead of The Bank of New York]
GLOBAL CUSTODY FEE SCHEDULE PER ACCOUNT FOR
WALNUT STREET FUNDS, INC.
TIER I MARKETS
--------------
Australia Mexico (Bonds)
Austria Netherlands
Belgium New Zealand
Canada Norway
France Spain
Germany Sweden
Ireland Switzerland
Japan United Kingdom
Safekeeping Charges
-------------------
12 basis points per annum on the market value of portfolio securities
held in the above countries.
Transaction Charges
-------------------
$60 for each transaction.
TIER II MARKETS
Fees
----
Safekeeping Transactions
----------- ------------
Argentina 35 b.p. $125
Denmark 15 b.p. $100
Finland 15 b.p. $ 75
Hong Kong 15 b.p. $150
Indonesia 15 b.p. $150
Italy 18 b.p. $ 75
Malaysia 15 b.p. $100
Mexico (Equities) 25 b.p. $ 60
Portugal 25 b.p. $150
Singapore 15 b.p. $150
Thailand 15 b.p. $100
Venezuela 45 b.p. $ 75
55
[letterhead of The Bank of New York]
Miscellaneous Transaction Charges
---------------------------------
$8.50 Federal Reserve Wires in/out not related to securities transactions, and
official check requests.
Out-of-Pocket Expenses
----------------------
Out-of-Pocket expenses traditionally include, but are not limited to Federal
Reserve charges for security transactions, postage and insurance on physical
transfer items, etc. These expenses will be billed to the respective custody
account on a monthly basis.
Walnut Street Funds, Inc. The Bank of New York
Approved by /s/ Xxxxxxx X. Xxxxxxxxx Submitted by /s/ Xxxxxxxx X. XxXxxxxxxx
------------------------ --------------------------
Xxxxxxxx X. XxXxxxxxxx
Assistant Vice President
Date 5/14/93 Date April 29, 1993
-------------------------------- -----------------------------------
56
[letterhead of The Bank of New York]
TIER III MARKETS
----------------
Cedel/Euroclear 6 b.p. $ 30
Out-of-Pocket Charges
---------------------
Charges incurred by The Bank of New York for local taxes, stamp duties or other
local duties and assessments, stock exchange fees, postage and insurance for
shipping, extraordinary telecommunications fees or other unusual expenses
which are unique to a country in which our client is investing (such as
exceptional transactions costs in Thailand or safekeeping charges on Spanish
utility stocks) will be passed along at cost.
Walnut Street Funds, Inc. The Bank of New York
Approved by /s/ Xxxxxxx X. Xxxxxxxxx Submitted by /s/ Xxxxxxxx X. XxXxxxxxxx
------------------------ --------------------------
Xxxxxxxx X. XxXxxxxxxx
Assistant Vice President
Date 5/14/93 Date April 29, 1993
-------------------------------- -----------------------------------
57
[letterhead of The Bank of New York]
PORTFOLIO PRICING, FUND ACCOUNTING,
FUND ADMINISTRATION AND BLUE SKY SERVICES FEE SCHEDULE
PER PORTFOLIO
FOR
WALNUT STREET FUNDS, INC.
10 basis points per annum on the first $100mm of each portfolio's daily
net assets
7 basis points on the next $400mm
3 basis points on the excess over $500mm
Minimum per month is $6,000 for one portfolio and $4,000 for each
additional domestic portfolio and $7,000 for each additional international
portfolio. All Fees will be billed monthly.
Out-of-Pocket Expenses
----------------------
These expenses are billed as they are incurred with no xxxx-up. Expenses
traditionally include, but are not limited to, the costs of obtaining prices
for security valuations and xxxx to market, costs associated with
attendance at Board presentations, postage, express mail charges, printing
of shareholder reports, etc.
Blue Sky
--------
$10,000.00 -- per annum per fund.
$150.00 -- for the initial filing in each state or jurisdiction.
$100.00 -- for each subsequent renewal, or report filing in any state or
jurisdiction.
Out-of-Pocket Expenses
----------------------
Blue Sky expenses include, but are not limited to, the costs of reproducing
fund and filing documents, postage, express mail charges, Commscan Inc.
directed or collect charges, etc.
Walnut Street Funds, Inc. The Bank of New York
Approved by /s/ Xxxxxxx X. Xxxxxxxxx Submitted by /s/ Xxxxxxxx X. XxXxxxxxxx
------------------------ --------------------------
Xxxxxxxx X. XxXxxxxxxx
Assistant Vice President
Date 5/14/93 Date April 29, 1993
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