MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of September 1, 2002, and is between DREYFUS
FOUNDERS FUNDS, INC. (the "Fund"), a corporation organized under the laws of the
State of Maryland having its principal office and place of business at 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, and MELLON BANK N. A., (the "Custodian"),
with its principal place of business at Xxx Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX
00000.
W I T N E S S E T H:
WHEREAS, the Fund is authorized to issue shares in separate series with
each such series representing interests in a separate portfolio of securities
and other assets, and the Fund has made the Series listed on Appendix E subject
to this Agreement (each such series, together with all other series subsequently
established by the Fund and made subject to the Agreement in accordance with the
terms hereof, shall be referred to as a "Series" and collectively as the
"Series"); and
WHEREAS, the Fund and the Custodian desire to set forth their agreement
with respect to the custody of the Series' Securities and cash and the
processing of Securities transactions; and
WHEREAS, the Board desires to delegate certain of its responsibilities for
performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to the Custodian as a Foreign Custody Manager; and
WHEREAS, the Custodian agrees to accept such delegation with respect to
Assets, including those held by Foreign Custodians in the Selected Countries as
set forth in jurisdictions listed on APPENDIX C as set forth in Article II; and
WHEREAS, the Custodian agrees to perform the function of a
Primary Custodian under Rule 17f-7;
NOW THEREFORE, the Fund and the Custodian agree as follows:
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DEFINITIONS
The following words and phrases, unless the context requires otherwise, shall
have the following meanings:
1. "ACT": the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to
time.
2. "AGREEMENT": this agreement and any amendments.
3. "ASSETS": any of the Series' investments, including
foreign currencies and investments for which the primary
market is outside the United States, and cash and cash
equivalents.
4. "AUTHORIZED PERSON": any person, whether or not any such
person is an officer or employee of the Fund, duly
authorized by the Board to add or delete jurisdictions
pursuant to Article II and to give Instructions on
behalf of a Series which is listed in the Certificate
annexed hereto as APPENDIX A.
5. "BOARD": the Board of Directors of the Fund.
6. "BOOK-ENTRY SYSTEM": the Federal Reserve/Treasury
book-entry system for United States and federal agency
Securities, its successor or successors and its nominee
or nominees.
7. "BUSINESS DAY": any day on which the Series, the
Custodian, the Book-Entry System and appropriate
clearing corporation(s) are open for business.
8. "CERTIFICATE": any notice, instruction or other
instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is
actually received by the Custodian and signed on behalf
of a Series by an Authorized Person or Persons
designated by the Board to issue a Certificate.
9. "ELIGIBLE SECURITIES DEPOSITORY": the meaning of the
term set forth in Rule 17f-7(b)(1).
10. "FOREIGN CUSTODIAN": (a) a banking institution or trust
company incorporated or organized under the laws of a
country other than the United States, that is regulated
as such by the country's government or an agency of the
country's government; (b) a majority-owned direct or
indirect subsidiary of a U.S. Bank or bank-holding company;
or (c) any entity other
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than a Securities Depository with respect to which
exemptive or no-action relief has been granted by the
Securities and Exchange Commission permitting such entity
to be designated and to serve as an eligible foreign
custodian in accordance with Rule 17f-5 under the Act.
For the avoidance of doubt, the term "Foreign Custodian"
shall not include Euroclear, Clearstream, Bank One or
any other transnational system for the central handling
of securities or equivalent book-entries regardless of
whether or not such entities or their service providers
are acting in a custodial capacity with respect to
Assets, Securities or other property of the Series.
11. "INSTRUCTIONS": directions and instructions to the
Custodian from two Authorized Persons in writing, by
facsimile, or by electronic transmission subject to the
Custodian's practices or any other method specifically
agreed upon, provided that the Custodian may, in its
discretion, accept oral directions and instructions from
two individuals it reasonably believes to be Authorized
Persons and may require confirmation in writing.
12. "PRIMARY CUSTODIAN": the meaning set forth in Rule
17f-7(b)(2).
13. "PROSPECTUS": a Series' current prospectus and statement
of additional information relating to the registration
of the Series' Shares under the Securities Act of 1933,
as amended.
14. "RISK ANALYSIS": the analysis required under Rule
17f-7(a)(1)(i)(A).
15. "RULES 17F-4, 17F-5 AND 17F-7": such Rules as
promulgated under Section 17(f) of the Act, as such
rules (and any successor rules or regulations) may be
amended from time to time.
16. "SECURITY" or "SECURITIES": bonds, debentures, notes,
stocks, shares, evidences of indebtedness, and other
securities, commodities, interests and investments from
time to time owned by the Series.
17. "SECURITIES DEPOSITORY": a system for the central
handling of securities as defined in Rule 17f-4.
18. "SELECTED COUNTRIES": the jurisdictions listed on APPENDIX
C as such may be amended from time to time in accordance
with Article II.
19. "SHARES": shares of each Series, however designated.
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ARTICLE I
CUSTODY PROVISIONS
1. APPOINTMENT OF CUSTODIAN. The Board appoints, and the Custodian accepts
appointment as custodian of all the Securities and monies at the time owned by
or in the possession of the Series during the period of this Agreement.
2. CUSTODY OF CASH AND SECURITIES.
(a) RECEIPT AND HOLDING OF ASSETS. The Series will deliver
or cause to be delivered to the Custodian all Securities
and monies owned by it at any time during the period of
this Custody Agreement. The Custodian will not be
responsible for such Securities and monies until
actually received. The Board specifically authorizes
the Custodian to hold Securities, Assets or other
property of the Series with any domestic subcustodian,
or Securities Depository, and Foreign Custodians or
Eligible Securities Depositories in the Selected
Countries as provided in Article II. Securities and
monies of the Series deposited in a Securities
Depository or Eligible Securities Depositories will be
reflected in an account or accounts which include only
assets held by the Custodian or a Foreign Custodian for
its customers.
(b) DISBURSEMENTS OF CASH AND DELIVERY OF SECURITIES. The
Custodian shall disburse cash or deliver out Securities
only for the purposes listed below. Instructions must
specify or evidence the purpose for which any
transaction is to be made and the Series shall be solely
responsible to assure that Instructions are in accord
with any limitations or restrictions applicable to the
Series:
(1) In payment for Securities purchased for the
applicable Series;
(2) In payment of dividends or distributions with
respect to Shares;
(3) In payment for Shares which have been redeemed by
the applicable Series;
(4) In payment of taxes;
(5 ) When Securities are sold, called, redeemed,
retired, or otherwise become payable;
(6) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of
merger, consolidation, reorganization, recapitalization
or readjustment;
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(7) Upon conversion of Securities pursuant to their terms into other
securities;
(8) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(9) For the payment of interest, management or supervisory fees,
distributions or operating expenses;
(10) In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the applicable
Series;
(11) In connection with any borrowings by the applicable Series or
short sales of securities requiring a pledge of Securities, but
only against receipt of amounts borrowed;
(12) In connection with any loans, but only against receipt of
adequate collateral as specified in Instructions which shall
reflect any restrictions applicable to the Series.
(13) For the purpose of redeeming Shares of the capital stock of the
applicable Series and the delivery to, or the crediting to the
account of, the Custodian or the applicable Series' transfer
agent, such Shares to be purchased or redeemed;
(14) For the purpose of redeeming in kind Shares of the applicable
Series against delivery to the Custodian, its Subcustodian or the
Series' transfer agent of such Shares to be so redeemed;
(15) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund. The Custodian will act
only in accordance with Instructions in the delivery of
Securities to be held in escrow and will have no responsibility
or liability for any such Securities which are not returned
promptly when due other than to make proper requests for such
return;
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(16) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(17) Upon the termination of this Agreement; and
(18) For other proper purposes as may be specified in Instructions
issued by an officer of the Fund which shall include a statement
of the purpose for which the delivery or payment is to be made,
the amount of the payment or specific Securities to be delivered,
the name of the person or persons to whom delivery or payment is
to be made, and a Certificate stating that the purpose is a
proper purpose under the instruments governing the Fund.
(c) ACTIONS WHICH MAY BE TAKEN WITHOUT INSTRUCTIONS. Unless
an Instruction to the contrary is received, the
Custodian shall:
(1) Collect all income due or payable, provided that the Custodian
shall not be responsible for the failure to receive payment of
(or late payment of) distributions or other payments with
respect to Securities or other property held in the account;
(2) Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed, retired or
otherwise become payable. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Series for
monitoring or ascertaining any call, redemption or retirement
dates with respect to put bonds or similar instruments which
are owned by the Series and held by the Custodian or its
nominees where such dates are not published in sources
routinely used by the Custodian. Nor shall the Custodian have
any responsibility or liability to the Series for any loss by
the Series for any missed payments or other defaults resulting
therefrom, unless the Custodian received timely notification
from the Series specifying the time, place and manner for the
presentment of any such put bond owned by the Series and held
by the Custodian or its nominee. The Custodian shall not be
responsible and assumes no liability for the accuracy or
completeness of any notification provided by third parties
that the Custodian may furnish to the Series with respect to
put bonds or similar instruments;
(3) Surrender Securities in temporary form for
definitive Securities;
(4) Hold directly, or through a Securities Depository with respect
to Securities therein deposited, for the account of the
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applicable Series all rights and similar Securities issued
with respect to any Securities held by the Custodian hereunder
for that Series;
(5) Submit or cause to be submitted to the applicable Series or
its investment advisor as designated by the applicable Series
information actually received by the Custodian regarding
ownership rights pertaining to property held for the
applicable Series;
(6) Deliver or cause to be delivered any Securities held for the
applicable Series 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;
(7) Deliver or cause to be delivered any Securities held for the
applicable Series to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments
or documents as may be issued to it to evidence such delivery;
(8) Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the applicable Series and
take such other steps as shall be stated in Instructions to be
for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or
recapitalization of the Series;
(9) Deliver Securities upon the receipt of payment in connection
with any repurchase agreement related to such Securities
entered into by the applicable Series;
(10) Deliver Securities owned by the applicable Series to the
issuer thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided,
however, that in any such case the cash or other consideration
is to be delivered to the Custodian. Notwithstanding the
foregoing, the Custodian shall have no responsibility to the
Series for monitoring or ascertaining any call, redemption or
retirement dates with respect to the put bonds or similar
instruments which are owned by the Series and held by the
Custodian or its nominee where such dates are not published in
sources routinely used by the Custodian. Nor shall the
Custodian have any responsibility or liability to the Series
for any loss by the Series for any missed payment or other
8
default resulting therefrom unless the Custodian received
timely notification from the Series specifying the time, place
and manner for the presentment of any such put bond owned by
the Series and held by the Custodian or its nominee. The
Custodian shall not be responsible and assumes no liability to
the Series for the accuracy or completeness of any
notification provided by third parties that the Custodian may
furnish to the Series with respect to put bonds or similar
investments;
(11) Endorse and collect all checks, drafts or other orders for the
payment of money received by the Custodian for the account of
the applicable Series; and
(12) Execute any and all documents, agreements or other instruments
as may be necessary or desirable for the accomplishment of the
purposes of this Agreement.
(d) CONFIRMATION AND STATEMENTS. Promptly after the close
of business on each day, the Custodian shall furnish
each Series with confirmations and a summary of all
transfers to or from the account of the Series during
the day. Where securities purchased by a Series are 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 a Securities
Depository, the Custodian shall by book-entry or
otherwise identify the quantity of those securities
belonging to that Series. On each Business Day, the
Custodian shall furnish each Series with a detailed
statement of the Securities and monies held for the
Series under this Custody Agreement.
(e) REGISTRATION OF SECURITIES. The Custodian is
authorized to hold all Securities, Assets, or other
property of each Series in nominee name, in bearer form
or in book-entry form. The Custodian may register any
Securities, Assets or other property of each Series in
the name of the Fund or the Series, in the name of the
Custodian, any domestic subcustodian, or Foreign
Custodian, in the name of any duly appointed registered
nominee of such entity, or in the name of a Securities
Depository or its successor or successors, or its
nominee or nominees. The Fund 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 a Securities Depository, any
Securities which it may hold for the account of the
applicable Series and which may from time to time be
registered in the name of the Fund or the applicable
Series.
(f) SEGREGATED ACCOUNTS. Upon receipt of Instructions, the
Custodian will from time to time establish segregated
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accounts on behalf of the applicable Series to hold and
deal with specified assets as shall be directed.
3. SETTLEMENT OF SERIES TRANSACTIONS.
(a) CUSTOMARY PRACTICES. Settlement of transactions may be effected in
accordance with trading and processing practices customary in the
jurisdiction or market where the transaction occurs. The Fund
acknowledges that this may, in certain circumstances, require the
delivery of cash or Securities (or other property) without the
concurrent receipt of Securities (or other property) or cash. In such
circumstances, the Custodian shall have no responsibility for
nonreceipt of payments (or late payment) or nondelivery of Securities
or other property (or late delivery) by the counterparty.
(b) CONTRACTUAL INCOME. Unless the parties agree to the contrary, the
Custodian shall credit the applicable Series, in accordance with the
Custodian's standard operating procedure, with income and maturity
proceeds on securities on contractual payment date net of any taxes
or upon actual receipt. To the extent the Custodian credits income on
contractual payment date, the Custodian may reverse such accounting
entries with back value to the contractual payment date if the
Custodian reasonably believes that such amount will not be received.
(c) CONTRACTUAL SETTLEMENT. Unless the parties agree to the contrary, the
Custodian will attend to the settlement of securities transactions in
accordance with the Custodian's standard operating procedure, on the
basis of either contractual settlement date accounting or actual
settlement date accounting. To the extent the Custodian settles
certain securities transactions on the basis of contractual
settlement date accounting, the Custodian may reverse with back value
to the contractual settlement date any entry relating to such
contractual settlement if the Custodian reasonably believes that such
amount will not be received.
4. LENDING OF SECURITIES. The Custodian may lend the assets of the Series in
accordance with the terms and conditions of a separate securities lending
agreement, in the event that such an agreement is approved by the Fund.
5. PERSONS HAVING ACCESS TO ASSETS OF THE SERIES.
(a) No trustee or agent of the Fund, and no officer, director,
employee or agent of the Fund's investment adviser, of any
sub-investment adviser of the Fund, or of the Fund's
administrator, shall have physical access to the assets of the
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Series held by the Custodian or be authorized or permitted to
withdraw any investments of the Series, nor shall the Custodian
deliver any assets of the Series to any such person. No officer,
director, employee or agent of the Custodian who holds any
similar position with the Fund's investment adviser, with any
sub-investment adviser of the Fund or with the Fund's
administrator shall have access to the assets of the Series.
(b) Nothing in this Section 5 shall prohibit any duly authorized
officer, employee or agent of the Fund, or any duly authorized
officer, director, employee or agent of the investment adviser,
of any sub-investment adviser of the Series or of the Series'
administrator, from giving Instructions to the Custodian or
executing a Certificate so long as it does not result in delivery
of or access to assets of the Series prohibited by paragraph (a)
of this Section 5.
6. STANDARD OF CARE; SCOPE OF CUSTODIAL RESPONSIBILITIES.
(a) STANDARD OF CARE. Custodian shall be required to exercise reasonable
care with respect to its duties under this Agreement unless
otherwise provided.
(1) Notwithstanding any other provision of this Custody Agreement,
the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission
to act or otherwise, except for any such loss or damage arising
out of the negligence or willful misconduct of the Custodian.
(2) The Custodian may, with respect to questions of law, and
following prior notice to the Fund where practicable, apply for
and obtain the advice and opinion of counsel to the Fund or of
its own counsel, at the reasonable expense of the Fund, and
shall, in accordance with Article IV, Section 5(a), below, be
protected with respect to anything done or omitted by it in
good faith in conformity with such advice or opinion.
(b) SCOPE OF DUTIES. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into,
and shall not be liable for:
(1) The acts or omissions of any agent appointed pursuant to
Instructions of the Fund or its investment advisor including,
but not limited to, any broker-dealer or other entity to hold
any Securities or other property of the Fund as collateral or
otherwise pursuant to any investment strategy.
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(2) The validity of the issue of any Securities purchased by the
Series, the legality of the purchase thereof, or the propriety
of the amount paid therefor;
(3) The legality of the sale of any Securities by the
Series or the propriety of the amount for which
the same are sold;
(4) The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received
therefor;
(5) The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of the Series;
(7) The legality of any borrowing for temporary
administrative or emergency purposes.
(c) NO LIABILITY UNTIL RECEIPT. 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 Series until the Custodian
actually receives and collects such money.
(d) AMOUNTS DUE FROM TRANSFER AGENT. The Custodian shall not be required
to effect collection of any amount due to the Series from the Series'
transfer agent or be required to cause payment or distribution by such
transfer agent of any amount paid by the Custodian to the transfer
agent.
(e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall not be required
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 it shall be
directed to take such action and it shall be assured to its
satisfaction of reimbursement of its related costs and expenses.
(f) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Series are such as may properly be
held by the Series under the provisions of its governing instruments
or Prospectus.
(G) RELIANCE ON INSTRUCTIONS. The Custodian shall be entitled to rely upon
any Instruction, notice or other instrument in writing received by the
Custodian and reasonably believed by the Custodian to be genuine and
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to be signed by two Authorized Persons of the Series. Where the
Custodian is issued Instructions orally, the Series acknowledge that
if written confirmation is requested, the validity of the transactions
or enforceability of the transactions authorized by the Series shall
not be affected if such confirmation is not received or is contrary to
oral Instructions given. The Custodian shall be under no duty to
question any direction of two Authorized Persons to review any
property held in the account, to make any suggestions with respect to
the investment of the assets in the account, or to evaluate or
question the performance of any Authorized Person. The Custodian shall
not be responsible or liable for any diminution of value of any
securities or other property held by the Custodian.
7. APPOINTMENT OF SUBCUSTODIANS. The Custodian is hereby authorized to appoint
one or more domestic subcustodians (which may be an affiliate of the Custodian)
to hold Securities and monies at any time owned by the Series; provided,
however, that the Custodian shall remain fully responsible for the proper
performance of this Agreement by such subcustodians. The Custodian is also
hereby authorized when acting pursuant to Instructions to: 1) place assets with
any Foreign Custodian located in a jurisdiction which is not a Selected Country
and with Euroclear, Clearstream, Banc One or any other transnational depository;
and 2) place assets with a broker or other agent as subcustodian in connection
with futures, options, short selling or other transactions. When acting pursuant
to such Instructions, the Custodian shall not be liable for the acts or
omissions of any subcustodian so appointed.
8. OVERDRAFT FACILITY AND SECURITY FOR PAYMENT. In the event that the Custodian
receives Instructions to make payments or transfers of monies on behalf of the
Series for which there would be, at the close of business on the date of such
payment or transfer, insufficient monies held by the Custodian on behalf of the
Series, the Custodian may, in its sole discretion, provide an overdraft (an
"Overdraft") to the Series in an amount sufficient to allow the completion of
such payment or transfer. Any Overdraft provided hereunder: (a) shall be payable
on the next Business Day, unless otherwise agreed by the Series and the
Custodian; and (b) shall accrue interest from the date of the Overdraft to the
date of payment in full by the Series at a rate agreed upon from time to time,
by the Custodian and the Series or, in the absence of specific agreement, by
such rate as charged to other customers of Custodian under procedures uniformly
applied. The Custodian and the Series acknowledge that the purpose of such
Overdraft is to temporarily finance the purchase of Securities for prompt
delivery in accordance with the terms hereof, to meet unanticipated or unusual
redemptions, to allow the settlement of foreign exchange contracts or to meet
other unanticipated Series expenses. The Custodian shall promptly notify the
Series (an "Overdraft Notice") of any Overdraft. To secure payment of any
Overdraft, the Series hereby grant to the Custodian a continuing security
interest in and right of setoff against the Securities and cash in the Series'
account from time to time in the full amount of such Overdraft. Should the
Series fail to pay promptly any amounts owed hereunder, the Custodian shall be
entitled to use available cash in the Series' account and, following prior
consultation with the Fund whenever possible, to liquidate Securities in the
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account as necessary to meet the Series' obligations under the Overdraft. In any
such case, and without limiting the foregoing, the Custodian shall be entitled
to take such other actions(s) or exercise such other options, powers and rights
as the Custodian now or hereafter has as a secured creditor under the
Massachusetts Uniform Commercial Code or any other applicable law.
9. TAX OBLIGATIONS. For purposes of this Agreement, "Tax Obligations" shall mean
taxes, withholding, certification and reporting requirements, claims for
exemptions or refund, interest, penalties, additions to tax and other related
expenses. To the extent that the Custodian has received relevant and necessary
information with respect to the Account, the Custodian shall perform the
following services with respect to Tax Obligations:
(a) the Custodian shall file claims for exemptions or refunds with respect
to withheld foreign (non-U.S.) taxes in instances in which such claims
are appropriate;
(b) the Custodian shall withhold appropriate amounts, as required by U.S.
tax laws, with respect to amounts received on behalf of nonresident
aliens; and
(c) the Custodian shall provide to the Fund or the Authorized Person such
information received by the Custodian which could, in the Custodian's
reasonable belief, assist the Fund or the Authorized Person in the
submission of any reports or returns with respect to Tax Obligations.
The Fund shall inform the Custodian in writing as to which party or
parties shall receive information from the Custodian.
The Custodian shall provide such other services with respect to Tax Obligations,
including preparation and filing of tax returns and reports and payment of
amounts due (to the extent funded), as requested by the Fund and agreed to by
the Custodian in writing. The Custodian shall have no independent obligation to
determine the existence of any information with respect to, or the extent of,
any Tax Obligations now or hereafter imposed on the Fund or the Account by any
taxing authority. Except as specifically provided herein or agreed to in writing
by the Custodian, the Custodian shall have no obligations or liability with
respect to Tax Obligations, including, without limitation, any obligation to
file or submit returns or reports with any taxing authorities.
In making payments to service providers pursuant to Instructions, the Fund
acknowledges that the Custodian is acting as a paying agent and not as the
payor, for tax information reporting and withholding purposes.
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ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. DELEGATION. The Board delegates to, and the Custodian hereby agrees to accept
responsibility as the Fund's Foreign Custody Manager for selecting, contracting
with and monitoring Foreign Custodians in Selected Countries set forth in
Appendix C in accordance with Rule 17f-5(c).
2. CHANGES TO APPENDIX C. Appendix C may be amended from time to time to add or
delete jurisdictions by written agreement signed by two Authorized Persons of
the Fund and the Custodian, but the Custodian reserves the right to delete
jurisdictions upon reasonable notice to the Series.
3. REPORTS TO BOARD. Custodian shall provide written reports notifying the Board
of the placement of Assets with a particular Foreign Custodian and of any
material change in a Series' foreign custody arrangements. Such reports shall be
provided to the Board quarterly WITHIN 20 days following the end of each
calendar quarter except as otherwise agreed by the Custodian and the Fund.
4. MONITORING SYSTEM. In each case in which the Custodian has exercised
delegated authority to place Assets with a Foreign Custodian, the Custodian
shall establish a system to re-assess or re-evaluate selected Foreign Custodians
at least annually in accordance with Rule 17f-5(c)(3).
5. STANDARD OF CARE. In exercising the delegated authority under this Article II
of the Agreement, the Custodian agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of the
Assets would exercise in like circumstances. Contracts with Foreign Custodians
shall provide for reasonable care for Assets based on the standards applicable
to Foreign Custodians in the Selected Country. In making the determination that
reasonable care shall be exercised, the Custodian shall consider the provisions
of Rule 17f-5(c)(2).
6. USE OF SECURITIES DEPOSITORIES. In exercising its delegated authority, the
Custodian may assume that the Series and/or its investment adviser have
determined, pursuant to Rule 17f-7, that the depository provides reasonable
safeguards against custody risks, if a Series and/or its investment adviser
decides to place and maintain foreign assets with any Securities Depository as
to which the Custodian has provided the Fund on behalf of such Series with a
Risk Analysis.
15
ARTICLE III
INFORMATION SERVICES
1. RISK ANALYSIS. The Custodian will provide the Fund on behalf of the Series
with a Risk Analysis with respect to Securities Depositories operating in the
countries listed in Appendix C which shall indicate whether the Custodian
considers such Securities Depository to meet the requirements of an Eligible
Securities Depository under Rule 17f-7. If the Custodian is unable to provide a
Risk Analysis with respect to a particular Securities Depository, it will notify
the Fund on behalf of the Series. If a new Securities Depository commences
operation in one of the Appendix C countries, the Custodian will provide the
Fund on behalf of the Series with a Risk Analysis in a reasonably practicable
time after such Securities Depository becomes operational. If a new country is
added to Appendix C, the Custodian will provide the Fund on behalf of the Series
with a Risk Analysis with respect to each Securities Depository in that country
within a reasonably practicable time after the addition of the country to
Appendix C. Notices and information to be provided under this Article III shall
be provided to the Fund or a Series investment adviser, as directed by the Fund.
2. MONITORING OF SECURITIES DEPOSITORIES. The Custodian will monitor the custody
risks associated with maintaining assets with each Securities Depository for
which it has provided the Fund on behalf of the Series with a Risk Analysis as
required under Rule 17f-7. The Custodian will promptly notify the Fund on behalf
of the Series and/or its investment adviser of any material change in these
risks.
3. USE OF AGENTS. The Custodian may employ agents, including but not limited to
Foreign Custodians, to perform its responsibilities under Sections 1 and 2
above.
4. EXERCISE OF REASONABLE CARE The Custodian will exercise reasonable care,
prudence, and diligence in performing its responsibilities under this Article
III. With respect to the Risk Analyses provided or monitoring performed by an
agent, the Custodian will exercise reasonable care in the selection of such
agent, and shall be entitled to rely upon information provided by agents so
selected in the performance of its duties and responsibilities under this
Article III.
5. LIABILITIES AND WARRANTIES. While the Custodian will take reasonable
precautions to ensure that information provided is accurate, the Custodian shall
have no liability with respect to information provided to it by third parties.
Due to the nature and source of information, and the necessity of relying on
various information sources, most of which are external to the Custodian, the
Custodian shall have no liability for direct or indirect use of such
information.
16
ARTICLE IV
GENERAL PROVISIONS
1. COMPENSATION.
(a) The Fund will compensate the Custodian for its services rendered under
this Agreement in accordance with the Fee Schedule set forth in
Appendix F. The fees set forth on this Fee Schedule shall not be
increased prior to September 1, 2006. Thereafter, the Fee Schedule may
be modified by the Custodian upon not less than 120 days' prior
written notice to the Fund.
(b) The Custodian will xxxx the Fund as soon as practicable after the end
of each calendar month. The Fund will promptly pay to the Custodian
the amount of such billing.
(c) If not paid directly or timely by the Fund, the Custodian may charge
against assets held on behalf of the Series compensation and any
expenses incurred by the Custodian in the performance of its duties
pursuant to this Agreement. The Custodian shall also be entitled to
charge against assets of the Series the amount of any loss, damage,
liability or expense incurred with respect to the Series, including
reasonable counsel fees, for which it shall be entitled to
reimbursement under the provisions of this Agreement. The expenses
which the Custodian may charge include, but are not limited to, the
expenses of domestic subcustodians and Foreign Custodians incurred in
settling transactions.
2. INSOLVENCY OF FOREIGN CUSTODIANS. The Custodian shall be responsible for
losses or damages suffered by the Series arising as a result of the insolvency
of a Foreign Custodian only to the extent that the Custodian failed to comply
with the standard of care set forth in Article II with respect to the selection
and monitoring of such Foreign Custodian.
3. LIABILITY FOR DEPOSITORIES. The Custodian shall not be responsible for any
losses resulting from the deposit or maintenance of Securities, Assets or other
property of the Series with a Securities Depository.
4. DAMAGES. Under no circumstances shall the Custodian be liable for any
indirect, consequential or special damages with respect to its role as Foreign
Custody Manager, Custodian or information vendor.
17
5. INDEMNIFICATION; LIABILITY OF THE SERIES.
(a) The Fund shall indemnify and hold the Custodian harmless from all
liability and expense, including reasonable counsel fees and
expenses, arising out of the performance of the Custodian's
obligations under this Agreement except as a result of the
Custodian's negligence, willful misconduct, violation of law
applicable to the performance of custodial duties, or breach of this
Agreement.
(b) The Series and the Custodian agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Series, individually, but are binding only
upon the assets and property of the Fund.
6. FORCE MAJEURE. Notwithstanding anything in this Agreement to the contrary,
neither party shall be liable to the other for any losses resulting from or
caused by events or circumstances beyond its reasonable control, including, but
not limited to, losses resulting from nationalization, strikes, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Series' property; or the breakdown, failure or malfunction of any
utilities or telecommunications systems; or any order or regulation of any
banking or securities industry including changes in market rules and market
conditions affecting the execution or settlement of transactions; or acts of
war, terrorism, insurrection or revolution; or any other similar event.
7. TERMINATION.
(a) Either party may terminate this Agreement by giving the other party
ninety-(90) days' notice in writing, specifying the date of such
termination. In the event notice is given by the Fund, it shall be
accompanied by a Certificate evidencing the vote of the Fund's Board
to terminate this Agreement and designating a successor.
(b) In the event notice of termination is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the Custodian a
Certificate evidencing the vote of the Board designating a successor
custodian. In the absence of such designation, the Custodian may
designate a successor custodian, which shall be a person qualified to
so act under the Act or the Series. If the Fund fails to designate a
successor custodian and the Custodian elects not to designate a
successor, the Fund shall, upon the date specified in the notice of
18
termination, and upon the delivery by the Custodian of all Securities
and monies then owned by the Series, be deemed to be its own custodian
and the Custodian shall thereby be relieved of all duties and
responsibilities under this Agreement other than the duty with respect
to Securities held in the Book-Entry System which cannot be delivered
to the Series.
(c) Upon termination of the Agreement, the Custodian shall, upon receipt
of a notice of acceptance by the successor custodian, deliver to the
successor all Securities and monies then held by the Custodian on
behalf of the Series, after deducting all fees, expenses and other
amounts owed. The Custodian shall limit its fees associated with
termination of the Agreement to the reasonable and actual expenses
which it may incur as a result of the termination.
(d) In the event of a dispute following the termination of this Agreement,
all relevant provisions shall be deemed to continue to apply to the
obligations and liabilities of the parties.
8. INSPECTION OF BOOKS AND RECORDS. The books and records of the Custodian shall
be open to inspection and audit at reasonable times by officers and auditors
employed by the Fund at its own expense and, except as otherwise required by
Rule 17f-2 under the Act, with prior written notice to the Custodian, and at all
times by the authorized employees or agents of the Securities and Exchange
Commission.
9. MISCELLANEOUS.
(a) APPENDIX A is a Certificate signed by the Secretary of the Fund
setting forth the names and the signatures of Authorized Persons. The
Fund shall furnish a new Certificate when the list of Authorized
Persons is changed in any way. Until a new certification is received,
the Custodian shall be fully protected in acting upon Instructions
from Authorized Persons as set forth in the last delivered
Certificate.
(b) APPENDIX B is a Certificate signed by the Secretary of the Fund
setting forth the names and the signatures of the present officers of
the Fund. The Fund agrees to furnish to the Custodian a new
Certificate when any changes are made. Until a new Certificate is
received, the Custodian shall be fully protected in relying upon the
last delivered Certificate.
(c) Any required written notice or other instrument shall be sufficiently
given if addressed to the Custodian or the Fund as the case may be and
delivered to it at its offices at:
19
The Custodian:
Mellon Bank, N.A.
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxx Xxxxxx
The Fund:
Dreyfus Founders Funds, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: General Counsel
or at such other place as the parties may from time to time
designate to the other in writing.
(d) This Agreement may not be amended or modified except by a written
agreement executed by both parties.
(e) 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 Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of the Fund authorized or approved by a
vote of the Board, and any other attempted assignment without written
consent shall be null and void; provided, however, that the Custodian
may delegate any of its responsibilities under this Agreement to any
corporation or entity which directly or indirectly is controlled by,
or is under common control with, the Custodian, provided that the
Custodian shall remain fully responsible for the proper performance of
this Agreement by any such corporation or entity.
(f) Nothing in this Agreement shall give or be construed to give or confer
upon any third party any rights hereunder.
(g) The Custodian represents that it is a U.S. Bank within the meaning of
paragraph (a)(7) of Rule 17f-5.
(h) The Fund acknowledges and agrees that except as expressly set forth in
this Agreement, the Fund is solely responsible to assure that the
maintenance of the Series' Securities and cash hereunder complies with
applicable laws and regulations, including without limitation the Act
20
and the rules and regulations promulgated thereunder and applicable
interpretations thereof or exemptions therefrom. The Fund represents
that it has determined that it is reasonable to rely on the Custodian
to perform the responsibilities delegated pursuant to this Agreement.
(i) This Agreement shall be construed in accordance with the laws of The
Commonwealth of Pennsylvania.
(j) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(k) Each party represents to the other that it has all necessary power and
authority, and has obtained any consent or approval necessary, to
permit it to enter into and perform this Agreement and that this
Agreement does not violate, give rise to a default or right of
termination under or otherwise conflict with any applicable law,
regulation, ruling, decree or other governmental authorization or any
contract to which it is a party or by which any of its assets are
bound.
(l) 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 representatives duly authorized as of the day and year first
above written.
DREYFUS FOUNDERS FUNDS, INC.
By: /S/ XXXXXXX X. XXXX
------------------------
Name: Xxxxxxx X. Xxxx
Title: President
MELLON BANK, N.A.
By: /S/ XXXXXXXXXXX XXXXX
------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: First Vice President
21
APPENDIX A
LIST OF AUTHORIZED PERSONS
I, Xxxxxxx X. Xxxxxxxxxxxxxx, the Secretary of DREYFUS FOUNDERS
FUNDS, INC., a corporation organized under the laws of the State of
Maryland (the "Fund"), do hereby certify that:
The following individuals have been duly authorized as Authorized Persons
to give Instructions on behalf of the Fund and each Series thereof and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
NAME SIGNATURE
---- ---------
Xxxxxxx X. Xxxxxxx /S/ XXXXXXX X. XXXXXXX
-------------------------------
Xxxxxx X. Xxxxx /S/ XXXXXX X. XXXXX
-------------------------------
Xxxxx Xxxxxx /S/ XXXXX XXXXXX
-------------------------------
Xxxxx Xxxxxxx /S/ XXXXX XXXXXXX
-------------------------------
Xxxxx Xxxxxxxxxx /S/ XXXXX XXXXXXXXXX
-------------------------------
DREYFUS FOUNDERS FUNDS, INC.
By: /S/ XXXXXXX X. XXXXXXXXXXXXXX
-------------------------------------
Secretary
Dated: August 15, 2002
22
APPENDIX B
FUND OFFICERS
I, Xxxxxxx X. Xxxxxxxxxxxxxx, the Secretary of DREYFUS FOUNDERS FUNDS,
INC., a corporation organized under the laws of the State of Maryland (the
"Fund"), do hereby certify that:
The following individuals serve in the following positions with the Fund
and each individual has been duly elected or appointed to each such position and
qualified therefor in conformity with the Fund's governing instruments and the
specimen signatures set forth opposite their respective names are their true and
correct signatures:
NAME POSITION SIGNATURE
---- -------- ---------
Xxxxxxx X. Xxxx President /S/ XXXXXXX X. XXXX
------------------------------
Xxxxx X. Xxx Vice President /S/ XXXXX X. XXX
------------------------------
Xxxxxxx X. Xxxxxxx Treasurer /S/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxxxxxxxxx Secretary /S/ XXXXXXX X. XXXXXXXXXXXXXX
------------------------------
Xxxxxx X. Xxxxx Assistant Treasurer /S/ XXXXXX X. XXXXX
------------------------------
Xxxxxxx X. Xxxxxxx Assistant Secretary /S/ XXXXXXX X. XXXXXXX
------------------------------
Xxxxx Xxxxxx Assistant Treasurer /S/ XXXXX XXXXXX
------------------------------
Xxxxx Xxxxxxx Assistant Treasurer /S/ XXXXX XXXXXXX
------------------------------
Xxxxx Xxxxxxxxxx Assistant Treasurer /S/ XXXXX XXXXXXXXXX
------------------------------
DREYFUS FOUNDERS FUNDS, INC.
By: /S/ XXXXXXX X. XXXXXXXXXXXXXX
-------------------------------------
Secretary
Dated: August 15, 2002
23
APPENDIX C
SELECTED COUNTRIES
Argentina Mexico
Australia Morocco
Austria Namibia
Bangladesh The Netherlands
Belgium New Zealand
Bermuda Norway
Bolivia Pakistan
Botswana Panama
Brazil Peru
Canada The Philippines
Chile Poland
China/Shenzhen Portugal
China/Shanghai Romania
Colombia Russia
Costa Rica Singapore
Croatia Slovakia
Czech Republic Slovenia
Denmark South Africa
Ecuador Spain
Egypt Sri Lanka
Estonia Sweden
Finland Switzerland
France Taiwan
Germany Thailand
Ghana Trinidad
Greece Tunisia
Hong Kong Turkey
Hungary United Kingdom
India Uruguay
Indonesia Venezuela
Ireland Vietnam
Israel Zambia
Italy Zimbabwe
Japan
Jordan
Kenya
Korea, Republic of
Luxembourg
Malaysia
Mauritius
24
APPENDIX D
SELF CUSTODY RIDER
Notwithstanding any other provisions of this Agreement to the contrary, the
following provisions shall apply to this Agreement as being subject to Rule
17f-2 under the Act.
1. PHYSICAL SEPARATIONS OF SECURITIES. Except as permitted by Rule 17f-2 or
Rule 17f-4, the Custodian shall hold all Securities deposited with it
physically segregated at all times from those of any other person.
2. ACCESS TO SECURITIES. Except as otherwise provided by law, no person shall
be authorized or permitted to have access to the Securities deposited with
the Custodian except pursuant to a Board resolution. Each such resolution
shall designate not more than five persons who shall be either officers or
responsible employees of the Fund and shall provide that access to such
investments shall be only by two or more such persons jointly, at least one
of whom shall be an officer; except that access to such investments shall
be permitted (1) to properly authorized officers and employees of the
Custodian and (2) to the Fund's independent public accountant jointly with
any two persons so designated or with such officer or employee of the
Custodian.
3. DEPOSITS AND WITHDRAWALS. Each person when depositing such securities or
similar investments in or withdrawing them from a Securities Depository, or
when ordering their withdrawal and delivery from the safekeeping of the
Custodian, shall comply with the requirements of Rule 17f-2(e).
4. EXAMINATION. The Fund and the Custodian shall comply with the requirements
of Rule 17f-2(f) with regard to examination by an independent public
accountant.
Acknowledged:
/S/ XXXXXXX X. XXXX /S/ XXXXXXXXXXX XXXXX
----------------------------------- -----------------------------------
Dreyfus Founders Funds, Inc. Mellon Bank, N.A.
00
XXXXXXXX X
SERIES SUBJECT TO AGREEMENT
Dreyfus Founders Balanced Fund
Dreyfus Founders Discovery Fund
Dreyfus Founders Government Securities Fund
Dreyfus Founders Growth Fund
Dreyfus Founders Growth and Income Fund
Dreyfus Founders International Equity Fund
Dreyfus Founders Mid-Cap Growth Fund
Dreyfus Founders Money Market Fund
Dreyfus Founders Passport Fund
Dreyfus Founders Worldwide Growth Fund
26
APPENDIX F
FEE SCHEDULE
This fee schedule reflects the Custodian's relationship pricing approach and is
applicable to all of the series portfolios of Dreyfus Founders Funds, Inc..
Core services include global safekeeping of assets, transaction settlement,
income collection, cash availability/forecasting, corporate action processing,
class action processing and basic on-line inquiry, and tax reclamation services.
Earnings credits will be earned on a fund-by-fund basis to offset custody fees.
Earnings credits will be calculated at 85% of the bank credit rate applied to
the average custody cash balances for the month. The bank credit rate is the
equivalent to the lesser of: the average 90-day Treasury Xxxx discount rate for
the month; or the Federal Funds rate for the month less 50 basis points.
Overdraft rates will be calculated at the Prime Rate (as published in the Wall
Street Journal) and charged on a daily basis. Monthly credit balances will roll
forward to offset future Custodian charges. Credit balances are used exclusively
to offset custody charges. Any credit remaining at year-end will expire, will
not apply to investment related expenses, and may not be transferred.
The Custodian is willing to guarantee the attached fee schedule for four years.
However, should the nature of the account change dramatically, the Custodian
reserves the right to re-negotiate its compensation based on the situation that
exists in the account at such time. If non-standard or special services are
requested, the Custodian may negotiate additional compensation accordingly.
DOMESTIC FEE SCHEDULE
ASSET BASED FEES:
0.00125% of 1% on the market value of assets
TRANSACTION FEES:
$ 3.50 per depository eligible transaction
$ 15.00 per physical transaction
$ 8.00 per mortgage and/or asset backed transaction
$ 8.00 per mortgage and/or asset backed security paydown
$ 4.50 per fed funds wire received or delivered
$ 30.00 per non-Mellon foreign exchange
27
GLOBAL FEE SCHEDULE - NETWORK BASED CHARGES
Country Asset Transaction Country Asset Transaction
Based Fee Based Fee
Fee (bps) Fee (bps)
--------------------------------- --------------------------------
Group1 Canada 2.25 $35.00 Morocco 40.25 $98.50
Switzerland 4.25 $35.00 Pakistan 40.25 $98.50
Group2 United 3.25 $35.00 Peru 40.25 $98.50
Kingdom
Group3 Japan 3.25 $35.00 Philippines 15.25 $98.50
Group4 Sweden 7.75 $50.00 Poland 40.25 $98.50
Group5 Euroclear 2.25 $23.50 Portugal 20.25 $98.50
Group6 Germany 4.25 $35.00 Romania 40.25 $98.50
Group7 Australia 3.25 $35.00 Slovenia 45.25 $98.50
France 4.25 $35.00 Czech 25.25 $98.50
Republic
Group8 Hong Kong 9.25 $50.00 Ecuador 35.25 $98.50
Netherlands 5.25 $35.00 Ghana 35.25 $98.50
Group9 Austria 7.75 $48.50 Greece 35.25 $98.50
Belgium 7.75 $48.50 Hungary 40.25 $98.50
Denmark 6.25 $48.50 India 40.25 $98.50
Estonia 45.25 $48.50 Indonesia 10.25 $98.50
Finland 10.25 $48.50 Israel 40.25 $98.50
Iceland 35.25 $48.50 Jordan 40.25 $98.50
Ireland 6.25 $48.50 Sri Lanka 25.25 $98.50
Italy 5.25 $48.50 Taiwan 22.25 $98.50
Latvia 65.25 $48.50 Trinidad 25.25 $98.50
Lithuania 35.25 $48.50 Tobago 35.25 $98.50
Luxembourg 7.25 $48.50 Turkey 25.25 $98.50
Malaysia 10.25 $48.50 Uruguay 40.25 $98.50
New Zealand 6.25 $48.50 Venezuela 40.25 $98.50
Norway 6.25 $48.50 Zambia 35.25 $98.50
Singapore 10.25 $48.50 Zimbabwe 35.25 $98.50
Group10 Spain 7.75 $68.50 Group13 Belize 45.25 $123.50
Group11 Bermuda 40.25 $73.50 Bolivia 45.25 $123.50
Mexico 6.25 $73.50 Cyprus 45.25 $123.50
Slovak 45.25 $73.50 Jamaica 45.25 $123.50
Republic
South 5.25 $73.50 Mauritius 40.25 $123.50
Africa
South Korea 18.25 $73.50 Namibia 35.25 $123.50
Thailand 10.25 $73.50 Tunisia 45.25 $123.50
Group12 Argentina 25.25 $98.50 Group14 Bahrein 50.25 $148.50
Bangladesh 40.25 $98.50 Egypt 45.25 $148.50
Botswana 40.25 $98.50 Ivory Coast 75.25 $148.50
Brazil 20.25 $98.50 Oman 65.25 $148.50
Bulgaria 50.25 $98.50 Group15 Swaziland 40.25 $198.50
Chile 35.25 $98.50 Group16 Ukraine 55.25 $273.50
China 35.25 $98.50 Group17 Russia 35.25 $298.50
Columbia 45.25 $98.50
Croatia 50.25 $98.50
Kenya 35.25 $98.50
NOTE:
The Custodian offers other services not covered under the above schedule. These
services are covered under separate fee schedules and include: Investment
Management, Securities Lending, Third Party Lending Support, Performance
Measurement and Analytics (through Xxxxxxx/Xxxxxx Analytical Services), Advanced
On-line Access, Non-Collectivized Real Estate and Mortgage Custody, Shareholder
Services, Partnership Accounting, Derivatives Processing, Daily Valuations, The
Custodian Executed Trade Support and Transfer Agency Services.
The Custodian will pass through to the client any out-of-pocket expenses
associated with the following:
o Worldwide custody, including but not limited to, postage, courier
expenses, registration fees, stamp duties, and fed wire fees, etc.
o Postage and courier expenses associated with delivery of
reports
o Proxy or tender solicitation expenses incurred with respect to
our duties
o Charges for customized reporting development, programming,
interface development and maintenance
o Costs on client specific, customized vendor feeds or data
services used to support client customized reporting
o Expenses associated with client requested: training, travel
and consulting
o Communication and hardware expenses including terminals, printers and
leased lines required to support data transmissions to/from the Custodian;
o Legal charges for extraordinary events, such as lawsuits, client initiated
events and regulatory audits, etc.
Additional fees may apply in situations where the following may occur: client's
billing requirements are exceptional, client requires "rush" service or systems
development, clients require consulting services and/or manual or otherwise
exceptional pricing for securities, Tax Department support work, or client
requires on-site training.
FEES WILL BE PAYABLE AS FOLLOWS:
Asset-based fees and transaction charges will be calculated and billed to the
Fund on a monthly basis.
Fees not paid within 60 days of the date of the invoice date will be subject to
a late charge of 1.5% per month of the amount billed.
Conversion Costs
The Custodian shall absorb the Fund's out-of-pocket costs associated with the
conversion from the Fund's current custodian to the Custodian including, without
limitation, local securities registration costs in foreign markets and foreign
transaction charges. This absorption shall be accomplished by the Custodian's
deduction of an amount equal to such conversion costs from the Custodian's
monthly invoices over a period not to exceed six months following the effective
date of this Agreement. The Fund shall notify the Custodian of the total amount
of such conversion costs (estimated at $19,500) as soon as practicable after
such effective date.
Additional Audit Costs
The Custodian shall absorb the Fund's out-of-pocket costs associated with the
surprise audits and additional year-end reporting required each fiscal year
pursuant to Rule 17f-2 under the Act. This absorption shall be accomplished by
the Custodian's deduction of an amount equal to such additional audit costs from
the Custodian's monthly invoices over a period not to exceed six months after
such costs are paid by the Fund. The Fund shall notify the Custodian of the
amount of such additional audit costs (estimated at $11,000 per surprise audit
and $2,000 per year for additional year-end reporting) as soon as practicable
after they are billed to the Fund.
Fee Waivers
The Custodian hereby agrees to waive the following fees payable under this
Agreement during the time periods set forth below:
TIME PERIOD AMOUNT OF WAIVER
----------- ----------------
9/1/02 to 8/31/03 $100,000
9/1/03 to 8/31/04 $150,000
9/1/04 to 8/31/05 $200,000
9/1/05 to 8/31/06 $200,000
These waivers shall be implemented as follows: The Custodian shall deduct an
amount equal to one-twelfth of the then-current fee waiver rate from each
month's invoice during each of the periods set forth above. On each such
invoice, the waiver shall be allocated among the Series in proportion to their
respective shares of the total invoice for the month.
2
