Master Custodian Agreement
Exhibit 28 (g)(3)
Execution Version
Execution Version
This Agreement is made as of August 30, 2010 by and among each management investment company
identified on Appendix A hereto (each such investment company and each management investment
company made subject to this Agreement in accordance with Section 18.5 below, shall hereinafter be
referred to as (the “Fund”), and State Street Bank and Trust Company, a
Massachusetts trust company (the “Custodian”).
Witnesseth:
Whereas, each Fund may or may not be authorized to issue shares of common stock or
shares of beneficial interest in separate series (“Shares”), with each such series representing
interests in a separate portfolio of securities and other assets;
Whereas, each Fund so authorized intends that this Agreement be applicable to each of
its series set forth on Appendix A hereto (such series together with all other series subsequently
established by the Fund and made subject to this Agreement in accordance with Section 18.6 below,
shall hereinafter be referred to as the “Portfolio(s)”).
Whereas, each Fund not so authorized intends that this Agreement be applicable to it
and all references hereinafter to one or more “Portfolio(s)” shall be deemed to refer to such
Fund(s); and
Now, Therefore, in consideration of the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
Section 1. Employment of Custodian and Property to be Held by It.
Each Fund hereby employs the Custodian as a custodian of assets of the Portfolios, including
securities which the Fund, on behalf of the applicable Portfolio, desires to be held in places
within the United States (“domestic securities”) and securities it desires to be held outside the
United States (“foreign securities”). Each Fund, on behalf of its Portfolio(s), agrees to deliver
to the Custodian all securities and cash of the Portfolios, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for such Shares as may be
issued or sold from time to time. The Custodian shall not be responsible for any property of a
Portfolio which is not received by it or which is delivered out in accordance with Proper
Instructions (as such term is defined in Section 7 hereof) including, without limitation, Portfolio
property (i) held by brokers, private bankers or other entities on behalf of the Portfolio (each a
“Local Agent”), (ii) held by Special Sub-Custodians (as such term is defined in Section 5 hereof),
(iii) held by entities which have advanced monies to or on behalf of the Portfolio and which have
received Portfolio property as security for such advance(s) (each a “Pledgee”), or (iv) delivered
or otherwise removed from the custody of the Custodian (a) in connection with any Free Trade (as
such term is defined in Sections 2.2(14) and 2.6(7) hereof) or (b) pursuant to Special Instructions
(as such term is defined in Section 7 hereof). With respect to uncertificated shares (the
“Underlying Shares”) of registered “investment companies” (as defined in Section 3(a)(1) of the
Investment Company Act of 1940, as amended from time to time (the
“1940 Act”)),
whether in the same “group of investment companies” (as defined in Section 12(d)(1)(G)(ii)
of the 0000 Xxx) or otherwise, including pursuant to Section 12(d)(1)(F) of the 1940 Act
(hereinafter sometimes referred to as the “Underlying Portfolios”) the holding of confirmation
statements that identify the shares as being recorded in the Custodian’s name on behalf of the
Portfolios will be deemed custody for purposes hereof.
Upon receipt of Proper Instructions, the Custodian shall on behalf of the applicable Portfolio(s)
from time to time employ one or more sub-custodians located in the United States, but only in
accordance with an applicable vote by the Board of Trustees or the Board of Directors of the Fund
(as appropriate, and in each case, the “Board”) on behalf of the applicable Portfolio(s), and
provided that the Custodian shall have no more or less responsibility or liability to any Fund on
account of any actions or omissions of any sub-custodian so employed than any such sub-custodian
has to the Custodian. The Custodian may place and maintain each Fund’s foreign securities with
foreign banking institution sub-custodians employed by the Custodian and/or foreign securities
depositories, all as designated in Schedules A and B hereto, but only in accordance with the
applicable provisions of Sections 3 and 4 hereof.
Section 2. Duties of the Custodian with Respect to Property of the Portfolios to
be Held in the United States.
Section 2.1 Holding Securities. The Custodian shall hold and
physically segregate for the account of each Portfolio all non-cash property, to be held by it in
the United States, including all domestic securities owned by such Portfolio other than (a)
securities which are maintained pursuant to Section 2.8 in a clearing agency which acts as a
securities depository or in a book-entry system authorized by the U.S. Department of the Treasury
(each, a “U.S. Securities System”) and (b) Underlying Shares owned by each Fund which are
maintained pursuant to Section 2.10 hereof in an account with State Street Bank and Trust Company
or such other entity which may from time to time act as a transfer agent for the Underlying
Portfolios and with respect to which the Custodian is provided with Proper Instructions (the
“Underlying Transfer Agent”).
Section 2.2 Delivery of Securities. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian, in a U.S. Securities System
account of the Custodian or in an account at the Underlying Transfer Agent, only upon receipt of
Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions
when deemed appropriate by the parties, and only in the following cases:
| 1) | Upon sale of such securities for the account of the Portfolio and receipt of payment therefor; | ||
| 2) | Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Portfolio; | ||
| 3) | In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.8 hereof; |
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| 4) | To the depository agent in connection with tender or other similar offers for securities of the Portfolio; | ||
| 5) | To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian; | ||
| 6) | To the issuer thereof, or its agent, for transfer into the name of the Portfolio or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.7 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian; | ||
| 7) | Upon the sale of such securities for the account of the Portfolio, to the broker or its clearing agent, against a receipt, for examination in accordance with “street delivery” custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Custodian’s own negligence, bad faith or willful misconduct; | ||
| 8) | For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian; | ||
| 9) | In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian; | ||
| 10) | For delivery in connection with any loans of securities made by the Portfolio (a) against receipt of collateral as agreed from time to time by the Fund on behalf of the Portfolio, except that in connection with any loans for which collateral is to be credited to the Custodian’s account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible for the delivery of securities owned by the Portfolio prior to the receipt of such collateral or (b) to the lending agent, or the lending agent’s custodian, in accordance with written Proper Instructions (which may not provide for the receipt by the Custodian of collateral therefor) agreed upon from time to time by the Custodian and the Fund; | ||
| 11) | For delivery as security in connection with any borrowing by a Fund on behalf of a Portfolio requiring a pledge of assets by the Fund on behalf of such Portfolio; |
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| 12) | For delivery in accordance with the provisions of any agreement among the Fund on behalf of the Portfolio, the Custodian and a broker-dealer registered under the Securities Exchange Act of 1934 (the “Exchange Act”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”, formerly known as The National Association of Securities Dealers, Inc.), 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 on behalf of a Portfolio; | ||
| 13) | For delivery in accordance with the provisions of any agreement among a Fund on behalf of the Portfolio, the Custodian, and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission (the “CFTC”) and/or any contract market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Fund on behalf of a Portfolio; | ||
| 14) | Upon the sale or other delivery of such investments (including, without limitation, to one or more (a) Special Sub-Custodians or (b) additional custodians appointed by the Fund, and communicated to the Custodian from time to time via a writing duly executed by an authorized officer of the Fund, for the purpose of engaging in repurchase agreement transactions(s), each a “Repo Custodian”), and prior to receipt of payment therefor, as set forth in written Proper Instructions (such delivery in advance of payment, along with payment in advance of delivery made in accordance with Section 2.6(7), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall set forth (a) the securities of the Portfolio to be delivered and (b) the person(s) to whom delivery of such securities shall be made; | ||
| 15) | Upon receipt of instructions from the Fund’s transfer agent (the “Transfer Agent”) for delivery to such Transfer Agent or to the holders of Shares in connection with distributions in kind, as may be described from time to time in the currently effective prospectus and statement of additional information of the Fund related to the Portfolio (the “Prospectus”), in satisfaction of requests by holders of Shares for repurchase or redemption; | ||
| 16) | In the case of a sale processed through the Underlying Transfer Agent of Underlying Shares, in accordance with Section 2.10 hereof; | ||
| 17) | For delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund on behalf of the Portfolio; and | ||
| 18) | For any other purpose, but only upon receipt of Proper Instructions from the Fund on behalf of the applicable Portfolio specifying (a) the securities of the Portfolio to be delivered and (b) the person or persons to whom delivery of such securities shall be made. |
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Section 2.3 Registration of Securities. Domestic securities held by
the Custodian (other than bearer securities) shall be registered in the name of the Portfolio or in
the name of any nominee of a Fund on behalf of the Portfolio or of any nominee of the Custodian
which nominee shall be assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other registered management
investment companies having the same investment adviser as the Portfolio, or in the name or nominee
name of any agent appointed pursuant to Section 2.7 or in the name or nominee name of any
sub-custodian appointed pursuant to Section 1. All securities accepted by the Custodian on behalf
of the Portfolio under the terms of this Agreement shall be in “street name” or other good delivery
form. If, however, a Fund directs the Custodian to maintain securities in “street name”, the
Custodian shall utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or exchange offers.
Section 2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each Portfolio of each Fund,
subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by the Portfolio in a bank
account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as Custodian in the banking
department of the Custodian or in such other banks or trust companies as it may in its discretion
deem necessary or desirable; provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall on behalf of each applicable
Portfolio be approved by vote of a majority of the Board. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that
capacity.
Section 2.5 Collection of Income. Except with respect to Portfolio
property released and delivered pursuant to Section 2.2(14) or purchased pursuant to Section
2.6(7), and subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis
all income and other payments with respect to registered domestic securities held hereunder to
which each Portfolio shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments with respect to bearer
domestic securities if, on the date of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such income, as collected, to such Portfolio’s
custodian account. Without limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held hereunder. Income due each
Portfolio on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the applicable Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to
which the Portfolio is properly entitled.
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Section 2.6 Payment of Fund Monies. Upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a Portfolio in the
following cases only:
| 1) | Upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Portfolio but only (a) against the delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by the Custodian as its agent for this purpose) registered in the name of the Portfolio or in the name of a nominee of the Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.8 hereof; (c) in the case of a purchase of Underlying Shares, in accordance with the conditions set forth in Section 2.10 hereof; (d) in the case of repurchase agreements entered into between the applicable Fund on behalf of a Portfolio and the Custodian, or another bank, or a broker-dealer which is a member of FINRA, (i) against delivery of the securities either in certificate form or through an entry crediting the Custodian’s account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Portfolio of securities owned by the Custodian along with written evidence of the agreement by the Custodian to repurchase such securities from the Portfolio; or (e) for transfer to a time deposit account of the Fund in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions from the Fund as defined herein; | ||
| 2) | In connection with conversion, exchange or surrender of securities owned by the Portfolio as set forth in Section 2.2 hereof; | ||
| 3) | For the redemption or repurchase of Shares issued as set forth in Section 6 hereof; | ||
| 4) | For the payment of any expense or liability incurred by the Portfolio, including but not limited to the following payments for the account of the Portfolio: interest, taxes, management, accounting, transfer agent and legal fees, and operating expenses of the Fund whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses; | ||
| 5) | For the payment of any dividends on Shares declared pursuant to the Fund’s articles of incorporation or organization and by-laws or agreement or declaration of trust, as applicable, and Prospectus (collectively, “Governing Documents”); | ||
| 6) | For payment of the amount of dividends received in respect of securities sold short; | ||
| 7) | Upon the purchase of domestic investments including, without limitation, repurchase agreement transactions involving delivery of Portfolio monies to Repo Custodian(s), and prior to receipt of such investments, as set forth in written Proper Instructions |
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| (such payment in advance of delivery, along with delivery in advance of payment made in accordance with Section 2.2(14), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall also set forth (a) the amount of such payment and (b) the person(s) to whom such payment is made; | |||
| 8) | For payment as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund on behalf of the Portfolio; and | ||
| 9) | For any other purpose, but only upon receipt of Proper Instructions from the Fund on behalf of the Portfolio specifying (a) the amount of such payment and (b) the person or persons to whom such payment is to be made. |
Section 2.7 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or trust company which
is itself qualified under the 1940 Act to act as a custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may from time to time direct; provided, however, that
the appointment of any agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder. For the avoidance of doubt, the Custodian shall be responsible for the acts and
omissions of such agents to the same extent as if such act or omission were performed by the
Custodian itself, subject to any standard of care, limitation of liability or other exculpatory or
like provision set forth herein. The Underlying Transfer Agent shall not be deemed an agent or
sub-custodian of the Custodian for purposes of this Section 2.7 or any other provision of this
Agreement.
Section 2.8 Deposit of Fund Assets in U.S. Securities Systems. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S. Securities System
in compliance with the conditions of Rule 17f-4 under the 1940 Act, as amended from time to time.
Section 2.9 Segregated Account. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio, establish and maintain a segregated
account or accounts for and on behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an account by the Custodian
pursuant to Section 2.8 hereof, (a) in accordance with the provisions of any agreement among the
Fund on behalf of the Portfolio, the Custodian and a broker-dealer registered under the Exchange
Act and a member of the FINRA (or any futures commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the CFTC or any registered contract market), or of any
similar organization or organizations, regarding escrow or other arrangements in connection with
transactions by the Portfolio, (b) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Portfolio or commodity futures contracts
or options thereon purchased or sold by the Portfolio, (c) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release No. 10666, or any
subsequent release of the U.S. Securities and Exchange Commission (the “SEC”), or interpretative
opinion of the staff of the SEC, relating to the maintenance of segregated accounts by registered
management investment companies, and (d) for any other purpose in accordance with Proper
Instructions.
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Section 2.10 Deposit of Fund Assets with the Underlying Transfer
Agent. Underlying Shares beneficially owned by the Fund, on behalf of a Portfolio, shall
be deposited and/or maintained in an account or accounts maintained with an Underlying Transfer
Agent and the Custodian’s only responsibilities with respect thereto shall be limited to the
following:
| 1) | Upon receipt of a confirmation or statement from an Underlying Transfer Agent that such Underlying Transfer Agent is holding or maintaining Underlying Shares in the name of the Custodian (or a nominee of the Custodian) for the benefit of a Portfolio, the Custodian shall identify by book-entry that such Underlying Shares are being held by it as custodian for the benefit of such Portfolio. | ||
| 2) | In respect of the purchase of Underlying Shares for the account of a Portfolio, upon receipt of Proper Instructions, the Custodian shall pay out monies of such Portfolio as so directed, and record such payment from the account of such Portfolio on the Custodian’s books and records. | ||
| 3) | In respect of the sale or redemption of Underlying Shares for the account of a Portfolio, upon receipt of Proper Instructions, the Custodian shall transfer such Underlying Shares as so directed, record such transfer from the account of such Portfolio on the Custodian’s books and records and, upon the Custodian’s receipt of the proceeds therefor, record such payment for the account of such Portfolio on the Custodian’s books and records. |
The Custodian shall not be liable to the Fund for any loss or damage to the Fund or any
Portfolio resulting from the maintenance of Underlying Shares with an Underlying Transfer
Agent except for losses resulting directly from the fraud, negligence or willful misconduct
of the Custodian or any of its agents or of any of its or their employees.
Section 2.11 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits for all federal and state tax
purposes in connection with receipt of income or other payments with respect to domestic securities
of each Portfolio held by it and in connection with transfers of securities.
Section 2.12 Proxies. Except with respect to Portfolio property
released and delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7), the
Custodian shall, with respect to the domestic securities held hereunder, cause to be promptly
executed by the registered holder of such securities, if the securities are registered otherwise
than in the name of the Portfolio or a nominee of the Portfolio, all proxies, without indication of
the manner in which such proxies are to be voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices relating to such securities.
Section 2.13 Communications Relating to Portfolio Securities.
Except with respect to Portfolio property released and delivered pursuant to Section 2.2(14), or
purchased pursuant to Section 2.6(7), and subject to the provisions of Section 2.3, the Custodian
shall transmit promptly to the applicable Fund for each Portfolio all written information
(including, without limitation,
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pendency of calls and maturities of domestic securities and expirations of rights in connection
therewith and notices of exercise of call and put options written by the Fund on behalf of the
Portfolio and the maturity of futures contracts purchased or sold by the Fund on behalf of the
Portfolio) received by the Custodian from issuers of the securities being held for the Portfolio.
With respect to tender or exchange offers, the Custodian shall transmit promptly to the applicable
Fund all written information received by the Custodian from issuers of the securities whose tender
or exchange is sought and from the party (or its agents) making the tender or exchange offer.
Provided that satisfaction of the following conditions is not directly prevented by the negligence,
bad faith or willful misconduct of the Custodian or any agent appointed by the Custodian pursuant
to Section 2.7 hereof, the Custodian shall not be liable for any untimely exercise of any tender,
exchange or other right or power in connection with domestic securities or other property of the
Portfolios at any time held by it unless (i) the Custodian is in actual possession of such domestic
securities or property and (ii) the Custodian receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at least three business days prior
to the date on which the Custodian is to take action to exercise such right or power. The
Custodian shall also transmit promptly to the applicable Fund for each Portfolio all written
information received by the Custodian regarding any class action or other litigation in connection
with Portfolio securities or other assets issued in the United States and then held, or previously
held, during the term of this Agreement by the Custodian for the account of the Fund for such
Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. For avoidance
of doubt, upon and after the effective date of any termination of this Agreement, with respect to a
Fund or its Portfolio(s), as may be applicable, the Custodian shall have no responsibility to so
transmit any information under this Section 2.13.
Section 3. Provisions Relating to Rules 17f-5 and 17f-7.
Section 3.1. Definitions. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets
in a particular country including, but not limited to, such country’s political environment,
economic and financial infrastructure (including any Eligible Securities Depository operating in
the country), prevailing or developing custody and settlement practices, and laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.
“Eligible Foreign Custodian” has the meaning set forth in section (a)(1) of Rule 17f-5, including a
majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding
company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or
by other appropriate action of the SEC), or a foreign branch of a Bank (as defined in Section
2(a)(5) of the 0000 Xxx) meeting the requirements of a custodian under Section 17(f) of the 1940
Act; the term does not include any Eligible Securities Depository.
“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.
“Foreign Assets” means any of the Portfolios’ investments (including foreign currencies) for which
the primary market is outside the United States and such cash and cash equivalents as are
reasonably necessary to effect the Portfolios’ transactions in such investments.
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“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.
“Rule 17f-5” means Rule 17f-5 promulgated under the 1940 Act.
“Rule 17f-7” means Rule 17f-7 promulgated under the 1940 Act.
Section 3.2. The Custodian as Foreign Custody Manager.
3.2.1 Delegation to the Custodian as Foreign Custody Manager. Each
Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b)
of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets of
the Portfolios held outside the United States, and the Custodian hereby accepts such delegation as
Foreign Custody Manager with respect to the Portfolios.
3.2.2 Countries Covered. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only with respect to the
countries and custody arrangements for each such country listed on Schedule A to this Agreement,
which list of countries may be amended from time to time by any Fund with the agreement of the
Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets of the Portfolios, which
list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the
Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A
in accordance with Section 3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to
place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by each
Fund, on behalf of the applicable Portfolio(s), of the applicable account opening requirements for
such country, the Foreign Custody Manager shall be deemed to have been delegated by such Fund’s
Board on behalf of such Portfolio(s) responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Agreement by each Fund shall be
deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in
each country listed on Schedule A. Following the receipt of Proper Instructions directing the
Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian
selected by the Foreign Custody Manager in a designated country, the delegation by the Board on
behalf of such Portfolio to the Custodian as Foreign Custody Manager for that country shall be
deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody
Manager with respect to such Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect
to a designated country upon written notice to the Fund. Thirty days (or such longer period to
which the parties agree in writing) after receipt of any such notice by the Fund, the Custodian
shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with
respect to the country as to which the Custodian’s acceptance of delegation is withdrawn.
3.2.3 Scope of Delegated Responsibilities:
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(a) Selection of Eligible Foreign Custodians. Subject to the provisions of
this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care
of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on
Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign
Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based
on the standards applicable to custodians in the country in which the Foreign Assets will be held
by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of
such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).
(b) Contracts With Eligible Foreign Custodians. The Foreign Custody Manager
shall determine that the contract governing the foreign custody arrangements with each Eligible
Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule
17f-5(c)(2).
(c) Monitoring. In each case in which the Foreign Custody Manager maintains
Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the
Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining
the Foreign Assets with such Eligible Foreign Custodian and (ii) the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In
the event the Foreign Custody Manager determines that the custody arrangements with an Eligible
Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall
notify the Board in accordance with Section 3.2.5 hereunder.
3.2.4 Guidelines for the Exercise of Delegated Authority. For
purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept
such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for
which the Custodian is serving as Foreign Custody Manager of the Portfolios.
3.2.5 Reporting Requirements. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of
such Foreign Assets with another Eligible Foreign Custodian by providing to the Board an amended
Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred.
The Foreign Custody Manager shall make written reports notifying the Board of any other material
change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after
the occurrence of the material change.
3.2.6 Standard of Care as Foreign Custody Manager of a Portfolio. In
performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise
reasonable care, prudence and diligence such as a person having responsibility for the safekeeping
of assets of management investment companies registered under the 1940 Act would exercise.
3.2.7 Representations with Respect to Rule 17f-5. The Foreign
Custody Manager represents to each Fund that it is a U.S. Bank as defined in section (a)(7) of Rule
17f-5. Each Fund represents to the Custodian that its Board has determined that it is reasonable
for such
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Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Agreement
to the Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 Effective Date and Termination of the Custodian as Foreign Custody
Manager. Each Board’s delegation to the Custodian as Foreign Custody Manager of the
Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at
any time, without penalty, by written notice from the terminating party to the non-terminating
party. Termination will become effective thirty (30) days after receipt by the non-terminating
party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and
termination of the Custodian as Foreign Custody Manager of the Portfolios with respect to
designated countries.
Section 3.3 Eligible Securities Depositories.
3.3.1 Analysis and Monitoring. The Custodian shall (a) provide the Fund (or
its duly-authorized investment manager or investment adviser) with an analysis of the custody risks
associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule
B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized investment manager or
investment adviser) of any material change in such risks, in accordance with section (a)(1)(i)(B)
of Rule 17f-7.
3.3.2 Standard of Care. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section 3.3.1.
| Section 4. Duties of the Custodian with Respect to Property of the Portfolios to be Held Outside the United States. |
Section 4.1 Definitions. As used throughout this Agreement, the
capitalized terms set forth below shall have the indicated meanings:
“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B hereto.
“Foreign Sub-Custodian” means a foreign banking institution serving as an Eligible Foreign
Custodian.
Section 4.2. Holding Securities. The Custodian shall identify on
its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian
or Foreign Securities System. The Custodian may hold foreign securities for all of its customers,
including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as
belonging to the Custodian for the benefit of its customers, provided however, that (i) the records
of the Custodian with respect to foreign securities of the Portfolios which are maintained in such
account shall identify those securities as belonging to the Portfolios and (ii), to the extent
permitted and customary in the market in which the account is maintained, the Custodian shall
require that securities so held by the Foreign Sub-Custodian be held separately from any assets of
such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
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Section 4.3. Foreign Securities Systems. Foreign
securities shall be maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such
country.
Section 4.4. Transactions in Foreign Custody Account.
4.4.1. Delivery of Foreign Assets. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios held by the Custodian
or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of
Proper Instructions, which may be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
| (i) | Upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System; | ||
| (ii) | In connection with any repurchase agreement related to foreign securities; | ||
| (iii) | To the depository agent in connection with tender or other similar offers for foreign securities of the Portfolios; | ||
| (iv) | To the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable; | ||
| (v) | To the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; | ||
| (vi) | To brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case, the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such foreign securities prior to receiving payment for such foreign securities except as may arise from the Foreign Sub-Custodian’s own negligence, bad faith or willful misconduct; | ||
| (vii) | For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; |
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| (viii) | In the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; | ||
| (ix) | For delivery as security in connection with any borrowing by a Fund on behalf of a Portfolio requiring a pledge of assets by the Fund on behalf of such Portfolio; | ||
| (x) | In connection with trading in options and futures contracts, including delivery as original margin and variation margin; | ||
| (xi) | Upon the sale or other delivery of such foreign securities (including, without limitation, to one or more Special Sub-Custodians or Repo Custodians) as a Free Trade, provided that applicable Proper Instructions shall set forth (A) the foreign securities to be delivered and (B) the person or persons to whom delivery shall be made; | ||
| (xii) | In connection with the lending of foreign securities; and | ||
| (xiii) | For any other purpose, but only upon receipt of Proper Instructions specifying (A) the foreign securities to be delivered and (B) the person or persons to whom delivery of such securities shall be made. |
4.4.2. Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign
Securities System to pay out, monies of a Portfolio in the following cases only:
| (i) | Upon the purchase of foreign securities for the Portfolio, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System; | ||
| (ii) | In connection with the conversion, exchange or surrender of foreign securities of the Portfolio; | ||
| (iii) | For the payment of any expense or liability of the Portfolio, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Agreement, legal fees, accounting fees, and other operating expenses; | ||
| (iv) | For the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio, including transactions executed with or through the Custodian or its Foreign Sub-Custodians; |
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| (v) | In connection with trading in options and futures contracts, including delivery as original margin and variation margin; | ||
| (vi) | Upon the purchase of foreign investments including, without limitation, repurchase agreement transactions involving delivery of Portfolio monies to Repo Custodian(s), as a Free Trade, provided that applicable Proper Instructions shall set forth (A) the amount of such payment and (B) the person or persons to whom payment shall be made; | ||
| (vii) | For payment of part or all of the dividends received in respect of securities sold short; | ||
| (viii) | In connection with the borrowing or lending of foreign securities; and | ||
| (ix) | For any other purpose, but only upon receipt of Proper Instructions specifying (A) the amount of such payment and (B) the person or persons to whom such payment is to be made. |
4.4.3. Market Conditions. Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for Foreign Assets received for the account of
the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be
effected in accordance with the customary established securities trading or processing practices
and procedures in the country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent
for such purchaser or dealer) with the expectation of receiving later payment for such Foreign
Assets from such purchaser or dealer.
The Custodian shall provide to each Board the information with respect to custody and settlement
practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule
C hereto at the time or times set forth on such Schedule. The Custodian may revise
Schedule C from time to time, provided that no such revision shall result in a Board being provided
with substantively less information than had been previously provided hereunder.
Section 4.5. Registration of Foreign Securities. The
foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in the name of the
Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the
foregoing, and the applicable Fund on behalf of such Portfolio agrees to hold any such nominee
harmless from any liability as a holder of record of such foreign securities. The Custodian or a
Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under
the terms of this Agreement unless the form of such securities and the manner in which they are
delivered are in accordance with reasonable market practice.
Section 4.6 Bank Accounts. The Custodian shall identify on its
books as belonging to the applicable Fund cash (including cash denominated in foreign currencies)
deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does
not facilitate the
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maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened
and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian.
All accounts referred to in this Section shall be subject only to draft or order by the Custodian
(or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to
hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of
the Custodian (including its branches, subsidiaries and affiliates), regardless of currency
denomination, is maintained in bank accounts established under, and subject to the laws of, The
Commonwealth of Massachusetts.
Section 4.7. Collection of Income. The Custodian shall use
reasonable commercial efforts to collect all income and other payments with respect to the Foreign
Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as
collected, to the applicable Portfolio. In the event that extraordinary measures are required to
collect such income, the Fund and the Custodian shall consult as to such measures and as to the
compensation and expenses of the Custodian relating to such measures.
Section 4.8 Shareholder Rights. With respect to the
foreign securities held pursuant to this Section 4, the Custodian shall use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights, subject always to the
laws, regulations and practical constraints that may exist in the country where such securities are
issued. Each Fund acknowledges that local conditions, including lack of regulation, onerous
procedural obligations, lack of notice and other factors may have the effect of severely limiting
the ability of such Fund to exercise shareholder rights.
Section 4.9. Communications Relating to Foreign Securities.
The Custodian shall transmit promptly to the applicable Fund written information with respect to
materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign
securities being held for the account of the Portfolios (including, without limitation, pendency of
calls and maturities of foreign securities and expirations of rights in connection therewith).
With respect to tender or exchange offers, the Custodian shall transmit promptly to the applicable
Fund written information with respect to materials so received by the Custodian from issuers of the
foreign securities whose tender or exchange is sought or from the party (or its agents) making the
tender or exchange offer. Provided that satisfaction of the following conditions is not directly
prevented by the negligence, bad faith or willful misconduct of the Custodian or any agent
appointed by the Custodian pursuant to Section 2.7 hereof, the Custodian shall not be liable for
any untimely exercise of any tender, exchange or other right or power in connection with foreign
securities or other property of the Portfolios at any time held by it unless (i) the Custodian or
the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property
and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right
or power, and both (i) and (ii) occur at least three business days prior to the date on which the
Custodian is to take action to exercise such right or power. The Custodian shall also transmit
promptly to the applicable Fund all written information received by the Custodian via the Foreign
Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios
regarding any class action or other litigation in connection with Portfolio foreign securities or
other assets issued outside the United States and then held, or previously held, during the term of
this Agreement by the Custodian via a Foreign Sub-Custodian for the account of the Fund for such
Portfolio, including, but not limited to, opt-out
-16-
notices and proof-of-claim forms. For avoidance of doubt, upon and after the effective date of any
termination of this Agreement, with respect to a Fund or its Portfolio(s), as may be applicable,
the Custodian shall have no responsibility to so transmit any information under this Section 4.9.
Section 4.10. Liability of Foreign Sub-Custodians. Each
agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its
duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost,
expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s
performance of such obligations. At a Fund’s election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a Foreign
Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Portfolios have not been made whole for any such loss, damage, cost,
expense, liability or claim. Such subrogation rights are in addition to any other rights that a
Fund may have under this Agreement.
Section 4.11 Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on any Fund, the Portfolios or the Custodian
as custodian of the Portfolios by the tax law of the United States or of any state or political
subdivision thereof. It shall be the responsibility of each Fund to notify the Custodian of the
obligations imposed on such Fund with respect to the Portfolios or the Custodian as custodian of
the Portfolios by the tax law of countries other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole responsibility of the Custodian with
regard to such tax law shall be to use reasonable efforts to effect the withholding of local taxes
and related charges with regard to market entitlements/payments in accordance with local law and
subject to local market practice or custom and to use reasonable efforts to assist the Fund with
respect to any claim for exemption or refund under the tax law of countries for which such Fund has
provided such information. Except as specifically provided in this Agreement or otherwise agreed
to in writing by the Custodian, the Custodian shall have no independent obligation to determine the
tax obligations now or hereafter imposed on any of the Funds by any taxing authority or to obtain
or provide information relating thereto, and shall have no obligation or liability with respect to
such tax obligations, it being specifically understood and agreed that the Custodian shall not
thereby or otherwise be considered any Fund’s tax advisor or tax counsel.
Section 4.12. Liability of Custodian. The Custodian shall
be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with
respect to sub-custodians generally in this Agreement and, regardless of whether assets are
maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, the Custodian
shall not be liable for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or terrorism, or any other
loss where the Sub-Custodian has otherwise acted with reasonable care.
Section 5. Special Sub-Custodians.
Upon receipt of Special Instructions (as such term is defined in Section 7 hereof), the Custodian
shall, on behalf of one or more Portfolios, appoint one or more banks, trust companies or other
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entities designated in such Special Instructions to act as a sub-custodian for the purposes of
effecting such transaction(s) as may be designated by a Fund in Special Instructions. Each such
designated sub-custodian is referred to herein as a “Special Sub-Custodian.” Each such duly
appointed Special Sub-Custodian shall be listed on Schedule D hereto, as it may be amended from
time to time by a Fund, with the acknowledgment of the Custodian. In connection with the
appointment of any Special Sub-Custodian, and in accordance with Special Instructions, the
Custodian shall enter into a sub-custodian agreement with the Fund and the Special Sub-Custodian in
form and substance approved by such Fund, provided that such agreement shall in all events comply
with the provisions of the 1940 Act and the rules and regulations thereunder and the terms and
provisions of this Agreement.
Section 5A. Loan Servicing Provisions
Section 5A.1 General. The following provisions shall apply with
respect to investments, property or assets in the nature of loans, or interests or participations
in loans, including without limitation interests in syndicated bank loans and bank loan
participations, whether in the U.S. or outside the U.S. (collectively, “Loans”) entered into by a
Fund on behalf of one or more of its Portfolios (each such Fund or Portfolio is referred to in this
Section 5A and Section 5B below as a “Fund”).
Section 5A.2 Safekeeping. Instruments, certificates, agreements
and/or other documents which the Custodian may receive with respect to Loans, if any (collectively
“Financing Documents”), from time to time, shall be held by the Custodian at its offices in Boston,
Massachusetts.
Section 5A.3 Duties of the Custodian. The Custodian shall accept
such Financing Documents, if any, with respect to Loans as may be delivered to it from time to time
by a Fund. The Custodian shall be under no obligation to examine the contents or determine the
sufficiency of any such Financing Documents or to provide any certification with respect thereto,
whether received by the Custodian as original documents, photocopies, by facsimile or otherwise.
Without limiting the foregoing, the Custodian is under no duty to examine any such Financing
Documents to determine whether necessary steps have been taken or requirements met with respect to
the assignment or transfer of the related Loan or applicable interest or participation in such
Loan. The Custodian shall be entitled to assume the genuineness, sufficiency and completeness of
any Financing Documents received, and the genuineness and due authority of any signature appearing
on such documents. Notwithstanding any term of this Agreement to the contrary, with respect to any
Loans, (i) the Custodian shall be under no obligation to determine, and shall have no liability
for, the sufficiency of, or to require delivery of, any instrument, document or agreement
constituting, evidencing or representing such Loan, other than to receive such Financing Documents,
if any, as may be delivered or caused to be delivered to it by the applicable Fund (or its
investment manager acting on its behalf), (ii) without limiting the generality of the foregoing,
delivery of any such Loan (including without limitation, for purposes of Section 2.8 above) may be
made to the Custodian by, and may be represented solely by, delivery to the Custodian of a
facsimile or photocopy of an assignment agreement (an “Assignment Agreement”) or a confirmation or
certification from such Fund (or the investment manager) to the effect that it has acquired such
Loan and/or has received or will receive, and will deliver to the Custodian, appropriate Financing
Documents constituting, evidencing or representing such Loan (such confirmation or certification,
together with any Assignment Agreement, collectively, an “Assignment Agreement or Confirmation”),
in any case without delivery of any promissory note, participation certificate or similar
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instrument (collectively, an “Instrument”), (iii) if an original Instrument shall be or shall
become available with respect to any such Loan, it shall be the sole responsibility of such Fund
(or the investment manager acting on its behalf) to make or cause delivery thereof to the
Custodian, and the Custodian shall be under no obligation at any time or times to determine whether
any such original Instrument has been issued or made available with respect to such Loan, and shall
not be under any obligation to compel compliance by such Fund to make or cause delivery of such
Instrument to the Custodian, and (iv) any reference to Financing Documents appearing in this
Section 5A shall be deemed to include, without limitation, any such Instrument and/or Assignment
Agreement or Confirmation.
If payments with respect to a Loan (“Loan Payment”) are not received by the Custodian on the date
on which they are due, as reflected in the Payment Schedule (as such term is defined in Section
5A.4 below) of the Loan (“Payment Date”), or in the case of interest payments, not received either
on a scheduled interest payable date, as reported to the Custodian by the applicable Fund (or the
investment manager acting on its behalf) for the Loan (the “Interest Payable Date”), or in the
amount of their accrued interest payable, the Custodian shall promptly, but in no event later than
one business day after the Payment Date or the Interest Payable Date, give telephonic notice to the
party obligated under the Financing Documents to make such Loan Payment (the “Obligor”) of its
failure to make timely payment, and (2) if such payment is not received within three business days
of its due date, shall notify such Fund (or the investment manager on its behalf) of such Obligor’s
failure to make the Loan Payment. The Custodian shall have no responsibility with respect to the
collection of Loan Payments which are past due, other than the duty to notify the Obligor and the
applicable Fund (or the investment manager acting on its behalf) as provided herein.
The Custodian shall have no responsibilities or duties whatsoever under this Agreement, with
respect to Loans or the Financing Documents, except for such responsibilities as are expressly set
forth herein. Without limiting the generality of the foregoing, the Custodian shall have no
obligation to preserve any rights against prior parties or to exercise any right or perform any
obligation in connection with the Loans or any Financing Documents (including, without limitation,
no obligation to take any action in respect of or upon receipt of any consent solicitation, notice
of default or similar notice received from any bank agent or Obligor, except that the Custodian
shall undertake reasonable efforts to forward any such notice to the applicable Fund or the
investment manager acting on its behalf). In case any question arises as to its duties hereunder,
the Custodian may request instructions from the applicable Fund and shall be entitled at all times
to refrain from taking any action unless it has received Proper Instructions from such Fund or the
investment manager and the Custodian shall in all events have no liability, risk or cost for any
action taken, with respect to a Loan, pursuant to and in compliance with the Proper Instructions of
such parties.
The Custodian shall be only responsible and accountable for Loan Payments actually received by it
and identified as for the account of the applicable Fund; any and all credits and payments credited
to such Fund, with respect to Loans, shall be conditional upon clearance and actual receipt by the
Custodian of final payment thereon.
The Custodian shall promptly, upon the applicable Fund’s request, release to such Fund’s investment
manager or to any party as such Fund or the Fund’s investment manager may specify, any Financing
Documents being held on behalf of such Fund. Without limiting the foregoing, the Custodian shall
not be deemed to have or be charged with knowledge of the sale of any Loan, unless and except to
the
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extent it shall have received written notice and instruction from the applicable Fund (or the
investment manager acting on its behalf) with respect thereto, and except to the extent it shall
have received the sale proceeds thereof.
In no event shall the Custodian be under any obligation or liability to make any advance of its own
funds with respect to any Loan.
Section 5A.4 Responsibility of the Funds. With respect to each
Loan held by the Custodian hereunder in accordance with the provisions hereof, the applicable Fund
shall (a) cause the Financing Documents evidencing such Loan to be delivered to the Custodian; (b)
include with such Financing Documents an amortization schedule of payments (the “Payment Schedule”)
identifying the amount and due dates of scheduled principal payments, the Interest Payable Date(s)
and related payment amount information, and such other information with respect to the related Loan
and Financing Documents as the Custodian reasonably may require in order to perform its services
hereunder (collectively, “Loan Information”), in such form and format as the Custodian reasonably
may require; (c) take, or cause the investment manager to take, all actions necessary to acquire
good title to such Loan (or the participation in such Loan, as the case may be), as and to the
extent intended to be acquired; and (d) cause the Custodian to be named as its nominee for payment
purposes under the Financing Documents or otherwise provide for the direct payment of the Payments
to the Custodian. The Custodian shall be entitled to rely upon the Loan Information provided to it
by a Fund (or the investment manager acting on its behalf) without any obligation on the part of
the Custodian independently to verify, investigate, recalculate, update or otherwise confirm the
accuracy or completeness thereof; and the Custodian shall have no liability for any delay or
failure on the part of a Fund in providing necessary Loan Information to the Custodian, or for any
inaccuracy therein or incompleteness thereof. With respect to each such Loan, the Custodian shall
be entitled to rely on any information and notices it may receive from time to time from the
related bank agent, Obligor or similar party with respect to the related Loan, and shall be
entitled to update its records on the basis of such information or notices received, without any
obligation on its part independently to verify, investigate or recalculate such information.
Section 5A.5 Instructions; Authority to Act. The certificate of
the Secretary or an Assistant Secretary of a Fund, identifying certain individuals approved by such
Fund’s Board to be officers of the Fund or employees of such Fund’s investment manager and
authorized to sign any such instructions, may be received and accepted as conclusive evidence of
the incumbency and authority of such to act and may be considered by the Custodian to be in full
force and effect until it receives written notice to the contrary from the Secretary or Assistant
Secretary of such Fund. Notwithstanding any other provision of this Agreement, the Custodian shall
have no responsibility to ensure that any investment by a Fund with respect to Loans has been
authorized.
Section 5A.6 Attachment. In case any portion of the Loans or the
Financing Documents shall be attached or levied upon pursuant to an order of court, or the delivery
or disbursement thereof shall be stayed or enjoined by an order of court, or any other order,
judgment or decrees shall be made or entered by any court affecting the property of the applicable
Fund or any act of the Custodian relating thereto, the Custodian is hereby expressly authorized in
its sole discretion to obey and comply with all orders, judgments or decrees so entered or issued,
without the necessity of inquire whether such court had jurisdiction, and, in case the Custodian
obeys or complied with any such order, judgment or decree,
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it shall not be liable to anyone by reason of such compliance.
Section 5B. Security Interest.
The provisions of this Section 5B shall constitute a security agreement. Terms used in this
Section 5B which are defined or otherwise set forth in the Uniform Commercial Code of The
Commonwealth of Massachusetts shall have the same meanings in this Section 5B as in the Uniform
Commercial Code of The Commonwealth of Massachusetts. If a term is defined or otherwise set forth
in Article 9 of the Uniform Commercial Code of The Commonwealth of Massachusetts and in another
Article as well, the term as defined or otherwise set forth in Article 9 shall control.
Section 5B.1 Collateral. To secure the due and punctual payment of
all liabilities, whether actual or contingent (“Liabilities”), of each Fund to the Custodian now or
hereafter arising or incurred under or in connection with this Agreement, each Fund hereby grants
to the Custodian a security interest in the following, whether now existing or hereafter acquired
or created (collectively, the “Collateral”):
| (i) | all of each Fund’s cash, deposit accounts, securities and other investment property, promissory notes and other instruments, chattel paper and other assets in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians; | ||
| (ii) | all of each Fund’s promissory notes and chattel paper (A) copies of which are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, (B) assigned to the Fund and for which originals or copies of confirmations or other evidences of the assignment are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, (C) in which the Fund holds participations and for which originals or copies of the participation agreements or certificates are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, or (D) assigned to the Fund or in which such Fund holds participations and for which instructions have been given to make payments of principal, interest or other amounts thereon to any of the Custodian and its agents, affiliates and subcustodians; | ||
| (iii) | all of each Fund’s payment intangibles (A) evidenced by or created under written or electronic agreements originals or copies of which are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, (B) assigned to the Fund and for which originals or copies of confirmations or other evidences of the assignment are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, (C) in which the Fund holds participations and for which originals or copies of the participation agreements or certificates are in the possession or under the control of any of the Custodian and its agents, affiliates and subcustodians, or (D) assigned to the Fund or in which such Fund holds participations and for which instructions have been given to make payments of principal, interest or other amounts thereon to any of the Custodian and its agents, affiliates and subcustodians; and |
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| (iv) | any and all proceeds of any thereof. |
The Liabilities include, without limitation, (a) the obligations of each Fund to the
Custodian in relation to any overdraft or other advance of cash or securities for any
purpose including in connection with any pre-determined income or assumed settlements; (b)
the obligations of each Fund to the Custodian (in its capacity as foreign exchange provider
or otherwise) in relation to any spot or forward foreign exchange contracts or any other
foreign exchange contract or facility entered into with such Fund; and (c) the obligations
of each Fund to reimburse the Custodian for any taxes, interest, charges, expense,
assessments, or other liabilities that may be assessed against or imposed on the Custodian
under or in connection with this Agreement for such Fund.
Section 5B.2 Failure to Satisfy Liabilities. In the event that a
Fund fails to satisfy any of the Liabilities as and when due and payable, the failure shall
constitute a default under this Section 5B, and the Custodian shall then have with respect to the
Collateral, in addition to all other rights and remedies arising hereunder or under applicable law,
the rights and remedies of a secured party under the Uniform Commercial Code of The Commonwealth of
Massachusetts. Without prejudice to the Custodian’s rights under applicable law, the Custodian
shall be entitled, without notice to the Fund, to withhold delivery of any Collateral, sell or
otherwise realize on any Collateral and to apply the money or other proceeds and any other monies
credited to the cash accounts in satisfaction of such Liabilities. Each Fund acknowledges that, in
the Custodian exercising any such rights or remedies against any Collateral, it will be
commercially reasonable for the Custodian (i) to accelerate or cause the acceleration of the
maturity of any fixed term deposits comprised in the Collateral and (ii) to effect such currency
conversions as may be necessary at its current rates for the sale and purchase of the relevant
currencies.
Section 5B.3 UCC Filings. Each Fund hereby irrevocably authorizes
the Custodian at any time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments thereto that (a)
indicate the Collateral as described in Section 5B.1 or (ii) as being of an equal or lesser scope
or with greater detail, and (b) provide any other information required by part 5 of Article 9 of
any applicable Uniform Commercial Code jurisdiction for the sufficiency or filing office acceptance
of any financing statement or amendment, including whether the Fund is an organization, the type of
organization and any organizational identification number issued to the Fund. Each Fund agrees to
furnish any such information to the Custodian promptly upon the Custodian’s request. Each Fund
also ratifies its authorization for the Custodian to have filed in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if filed prior to the date
hereof.
Section 5B.4 Chief Executive Office. Each Fund represents and
warrants to the Custodian that the Fund’s chief executive office is located at the address set
forth in Section 18.9 of this Agreement. Each Fund covenants to provide to the Custodian at least
30 days’ prior written notice of any change of location of the chief executive office.
Section 5B.5 Perfected Security Interest. Each Fund agrees to take
such actions as the Custodian may from time to time request in order to insure that the Custodian
has a first perfected security interest in the Collateral and that the Custodian has the ability to
enforce its security interest.
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Without limitation upon the foregoing, for such purposes each Fund (a) shall promptly deliver
to the possession or control of the Custodian or its designee originals of any instruments
(including promissory notes) and chattel paper comprised in the Collateral and not already in the
possession or under the control of the Custodian and its agents, affiliates and subcustodians, (b)
shall promptly obtain termination amendments of Uniform Commercial Code financing statements or
terminations or subordinations of security interests or other liens, in form and substance
satisfactory to Custodian, where the failure to take such action could result in a competing
security in or other lien on any of the Collateral having priority over the security interest of
the Custodian in the Collateral, and (c) shall promptly execute and file such notices and
registrations and take such other actions, including actions required under the law of any foreign
jurisdiction, which are, in the opinion of the Custodian, necessary or advisable to assure the
attachment, perfection, priority and ability of the Custodian to enforce the security interest and
(d) further authorizes the Custodian to take such action as in the opinion of the Custodian may be
necessary or advisable under any foreign law including making an appropriate entry in any security
interest, charge or lien registry in the country whose laws the Fund is organized or in which the
Fund maintains an office.
Section 6. Payments for Sales or Repurchases or Redemptions of Shares.
The Custodian shall receive from the distributor of the Shares or from the Transfer Agent and
deposit into the account of the appropriate Portfolio such payments as are received for Shares
thereof issued or sold from time to time by the applicable Fund. The Custodian will provide timely
notification to such Fund on behalf of each such Portfolio and the Transfer Agent of any receipt by
it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to holders of Shares who
have delivered to the Transfer Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial bank designated by
the redeeming shareholders. In connection with the redemption or repurchase of Shares, the
Custodian shall honor checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by a Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time between such Fund and
the Custodian.
Section 7. Proper Instructions and Special Instructions.
“Proper Instructions,” which may also be standing instructions, as such term is used throughout
this Agreement shall mean instructions received by the Custodian from a Fund, a Fund’s duly
authorized investment manager or investment adviser, or a person or entity duly authorized by
either of them. Such instructions may be in writing signed by the authorized person or persons or
may be in a tested communication or in a communication utilizing access codes effected between
electro-mechanical or electronic devices or may be by such other means and utilizing such
intermediary systems and utilities as may be agreed from time to time by the Custodian and the
person(s) or entity giving such instruction, provided that the Fund has followed any security
procedures agreed to from time to time by the applicable Fund and the Custodian including, but not
limited to, the security procedures
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selected by the Fund via the form of Funds Transfer Addendum hereto, the terms of which are hereby
agreed to. Oral instructions will be considered Proper Instructions if the Custodian reasonably
believes them to have been given by a person authorized to provide such instructions with respect
to the transaction involved; the Fund shall cause all oral instructions to be confirmed in writing.
For purposes of this Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any multi-party agreement which requires a segregated asset account in
accordance with Section 2.9 hereof.
“Special Instructions,” as such term is used throughout this Agreement, means Proper Instructions
countersigned or confirmed in writing by the President, Chief Compliance Officer or Deputy Chief
Compliance Officer of the applicable Fund or any other person designated in writing by such officer
of the Fund, which countersignature or confirmation shall be (a) included on the same instrument
containing the Proper Instructions or on a separate instrument clearly relating thereto and (b)
delivered by hand, by facsimile transmission, or in such other manner as the Fund and the Custodian
agree in writing.
Concurrently with the execution of this Agreement, and from time to time thereafter, as
appropriate, each Fund shall deliver to the Custodian, duly certified by such Fund’s Treasurer or
Assistant Treasurer, a certificate setting forth: (i) the names, titles, signatures and scope of
authority of all persons authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of the Fund and (ii) the names, titles
and signatures of those persons authorized to give Special Instructions. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and
shall be considered to be in full force and effect until receipt by the Custodian of a similar
certificate to the contrary.
Section 8. Evidence of Authority.
The Custodian shall be protected in acting upon any instructions, notice, request, consent,
certificate or other instrument or paper believed by it to be genuine and to have been properly
executed by or on behalf of the applicable Fund. The Custodian may receive and accept a copy of a
resolution certified by the Secretary or an Assistant Secretary of any Fund as conclusive evidence
(a) of the authority of any person to act in accordance with such resolution or (b) of any
determination or of any action by the applicable Board as described in such resolution, and such
resolution may be considered as in full force and effect until receipt by the Custodian of written
notice to the contrary.
Section 9. Actions Permitted without Express Authority.
The Custodian may in its discretion, without express authority from the applicable Fund on behalf
of each applicable Portfolio:
| 1) | Make payments to itself or others for minor expenses of handling securities or other similar items relating to its duties under this Agreement; provided that all such payments shall be accounted for to the Fund on behalf of the Portfolio; | ||
| 2) | Surrender securities in temporary form for securities in definitive form; |
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| 3) | Endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and | ||
| 4) | In general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of the Portfolio except as otherwise directed by the applicable Board. |
Section 10. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to the entity or entities
appointed by the applicable Board to keep the books of account of each Portfolio and/or compute the
net asset value per Share of the outstanding Shares or, if directed in writing to do so by a Fund
on behalf of a Portfolio, shall itself keep such books of account and/or compute such net asset
value per Share. If so directed, the Custodian shall also calculate daily the net income of the
Portfolio as described in the Prospectus and shall advise the Fund and the Transfer Agent daily of
the total amounts of such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net income among its
various components. Each Fund acknowledges and agrees that, with respect to investments maintained
with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of information
on the number of shares of a fund held by it on behalf of a Portfolio and that the Custodian has
the right to rely on holdings information furnished by the Underlying Transfer Agent to the
Custodian in performing its duties under this Agreement, including without limitation, the duties
set forth in this Section 10 and in Section 11 hereof; provided, however, that the Custodian shall
be obligated to reconcile information as to purchases and sales of Underlying Shares contained in
trade instructions and confirmations received by the Custodian and to report promptly any
discrepancies to the Underlying Transfer Agent. The calculations of the net asset value per Share
and the daily income of each Portfolio shall be made at the time or times described from time to
time in the Prospectus. Each Fund acknowledges that, in keeping the books of account of the
Portfolio and/or making the calculations described herein with respect to Portfolio property
released and delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7) hereof,
the Custodian is authorized and instructed to rely upon information provided to it by the Fund, the
Fund’s counterparty(ies), or the agents of either of them.
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Section 11. Records.
The Custodian shall with respect to each Portfolio create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the obligations of each
Fund under the 1940 Act, with particular attention to section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Fund and shall at all times during the
regular business hours of the Custodian be open for inspection by duly authorized officers,
employees or agents of such Fund and employees and agents of the SEC. The Custodian shall, at a
Fund’s request, supply the Fund with a tabulation of securities owned by each Portfolio and held by
the Custodian and shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations.
Each Fund acknowledges that, in creating and maintaining the records as set forth herein with
respect to Portfolio property released and delivered pursuant to Section 2.2(14), or purchased
pursuant to Section 2.6(7) hereof, the Custodian is authorized and instructed to rely upon
information provided to it by the Fund, the Fund’s counterparty(ies), or the agents of either of
them.
Section 12. Opinion of Fund’s Independent Accountant.
The Custodian shall take all reasonable action, as a Fund with respect to a Portfolio may from time
to time request, to obtain from year to year favorable opinions from the Fund’s independent
accountants with respect to its activities hereunder in connection with the preparation of the
Fund’s Form N-1A or Form N-2, as applicable, and Form N-SAR or other annual reports to the SEC and
with respect to any other requirements thereof.
Section 13. Reports to Fund by Independent Public Accountants.
The Custodian shall provide the applicable Fund, on behalf of each of the Portfolios at such times
as such Fund may reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities deposited and/or maintained in a
U.S. Securities System or a Foreign Securities System (either, a “Securities System”), relating to
the services provided by the Custodian under this Agreement; such reports, shall be of sufficient
scope and in sufficient detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
Section 14. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its services and expenses as
Custodian, as agreed upon from time to time between each Fund on behalf of each applicable
Portfolio and the Custodian.
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Section 15. Responsibility of Custodian.
So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not
be responsible for the title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably believed by it to be
genuine and to be signed by the proper party or parties, including any futures commission merchant
acting pursuant to the terms of a three-party futures or options agreement. The Custodian shall be
held to the exercise of reasonable care in carrying out the provisions of this Agreement, but shall
be kept indemnified by and shall be without liability to any Fund for any action taken or omitted
by it in good faith without negligence or willful misconduct, including, without limitation, acting
in accordance with any Proper Instruction. It shall be entitled to rely on and may act upon advice
of reputable counsel (who may be counsel for the Fund) on all matters, and shall be without
liability for any action reasonably taken or omitted by it in good faith pursuant to such advice.
The Custodian shall be without liability to any Fund or Portfolio for any loss, liability, claim or
expense resulting from or caused by anything that is part of Country Risk (as defined in Section 3
hereof), including without limitation nationalization, expropriation, currency restrictions,
insolvency of a Foreign Sub-custodian, acts of war, revolution, riots or terrorism.
Except as may arise from the Custodian’s own negligence, bad faith or willful misconduct or the
negligence, bad faith or willful misconduct of a sub-custodian or agent, the Custodian shall be
without liability to any Fund for any loss, liability, claim or expense resulting from or caused
by; (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian
or Securities System or any agent or nominee of any of the foregoing, including, without
limitation, the interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or interruptions, computer
viruses or communications disruptions, work stoppages, natural disasters, or other similar events
or acts (for the avoidance of doubt, nothing in this subsection (i) is intended to diminish
Custodian’s obligations under Section 18.16 of this Agreement); (ii) errors by any Fund or its duly
authorized investment manager or investment adviser in their instructions to the Custodian provided
such instructions have been in accordance with this Agreement; (iii) the insolvency of or acts or
omissions by a Securities System; (iv) any act or omission of a Special Sub-Custodian including,
without limitation, reliance on reports prepared by a Special Sub-Custodian; (v) any delay or
failure of any broker, agent or intermediary, central bank or other commercially prevalent payment
or clearing system to deliver to the Custodian’s sub-custodian or agent securities purchased or in
the remittance or payment made in connection with securities sold; (vi) any delay or failure of any
company, corporation, or other body in charge of registering or transferring securities in the name
of the Custodian, any Fund, the Custodian’s sub-custodians, nominees or agents or any consequential
losses arising out of such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vii) delays or inability to perform
its duties due to any disorder in market infrastructure with respect to any particular security or
Securities System; and (viii) any provision of any present or future law or regulation or order of
the United States of America, or any state thereof, or any other country, or political subdivision
thereof or of any court of competent jurisdiction. The Custodian shall be liable for the acts or
omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians
generally in this Agreement.
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If a Fund on behalf of a Portfolio requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in the opinion of the
Custodian, result in the Custodian or its nominee assigned to the Fund or the Portfolio being
liable for the payment of money or incurring liability of some other form, such Fund on behalf of
the Portfolio, as a prerequisite to requiring the Custodian to take such action, shall provide
indemnity to the Custodian in an amount and form satisfactory to it.
If a Fund requires the Custodian, its affiliates, subsidiaries or agents, to advance cash or
securities for any purpose (including but not limited to securities settlements, foreign exchange
contracts and assumed settlement), or in the event that the Custodian or its nominee shall incur or
be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its nominee’s own negligent
action, negligent failure to act, bad faith or willful misconduct, or if a Fund fails to compensate
the Custodian pursuant to Section 14 hereof, any property at any time held for the account of the
applicable Portfolio shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio’s assets to the extent necessary to obtain reimbursement.
Except as may arise from the Custodian’s own negligence, bad faith or willful misconduct, each Fund
shall indemnify and hold the Custodian harmless from and against any and all costs, expenses,
losses, damages, charges, counsel fees, payments and liabilities which may be asserted against the
Custodian (a) acting in accordance with any Proper Instruction or Special Instruction including,
without limitation, any Proper Instruction with respect to Free Trades including, but not limited
to, cost, expense, loss, damage, liability, tax, charge, assessment or claim resulting from (i) the
failure of the applicable Fund to receive income with respect to purchased investments, (ii) the
failure of the applicable Fund to recover amounts invested on maturity of purchased investments,
(iii) the failure of the Custodian to respond to or be aware of notices or other corporate
communications with respect to purchased investments, or (iv) the Custodian’s reliance upon
information provided by the applicable Fund, such Fund’s counterparty(ies) or the agents of either
of them with respect to Fund property released, delivered or purchased pursuant to either of
Section 2.2(14) or Section 2.6(7) hereof; (b) for the acts or omissions of any Special
Sub-Custodian; or (c) for the acts or omissions of any Local Agent or Pledgee.
In no event shall any party hereto be liable for indirect, special or consequential damages.
Section 16. Effective Period, Termination and Amendment.
This Agreement shall remain in full force and effect for an initial term ending November 1, 2013
(the “Initial Term”). After the expiration of the Initial Term, this Agreement shall automatically
renew for successive 1-year terms (each, a “Renewal Term”) unless a written notice of non-renewal
is delivered by the non-renewing party no later than ninety (90) days prior to the expiration of
the Initial Term or any Renewal Term, as the case may be. During the Initial Term and thereafter,
either party may terminate this Agreement: (i) with the written consent of the other party; (ii) in
the event of the other party’s material breach of a material provision of this Agreement that the
other party has either (a) failed to cure or (b) failed to establish a remedial plan to cure that
is reasonably acceptable, within 60 days’ written notice of such breach, (iii) in the event the
other party has been convicted,
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pled guilty or pled no contest to criminal conduct in any criminal proceeding (and with respect to
the Custodian, which is applicable to the Custodian in its capacity as custodian and which
materially affects the Custodian’s performance of the services provided hereunder), or (iv) in the
event of the commencement of a voluntary proceeding under Title 11 of the United State Code by the
other party, commencement of an involuntary proceeding under Title 11 of the United States Code
against the other party which is not timely dismissed, appointment of a conservator or receiver for
the other party or upon the happening of a like event to the other party at the direction of an
appropriate agency or court of competent jurisdiction. Upon termination of this Agreement pursuant
to this paragraph with respect to any Fund or Portfolio, the applicable Fund shall pay Custodian
its compensation due through the date of such termination (and such additional period, if any,
pursuant to Section 17 of this Agreement) and shall reimburse Custodian for its costs, expenses and
disbursements.
In the event of: (i) any Fund’s termination of this Agreement with respect to such Fund or its
Portfolio(s) for any reason other than as set forth in the immediately preceding paragraph or (ii)
a transaction not in the ordinary course of business pursuant to which the Custodian is not
retained to continue providing services hereunder to a Fund or Portfolio (or its respective
successor), the applicable Fund shall pay the Custodian its compensation due through the end of the
then-current term (based upon the average monthly compensation previously earned by Custodian with
respect to such Fund or Portfolio) and shall reimburse the Custodian for its costs, expenses and
disbursements. Upon receipt of such payment and reimbursement, the Custodian will deliver such
Fund’s or Portfolio’s securities and cash as set forth herein below. For the avoidance of doubt,
no payment will be required pursuant to clause (ii) of this paragraph in the event of any
transaction such as a merger of a Fund or Portfolio into, or the consolidation of a Fund or
Portfolio with, another entity, the sale by a Fund or Portfolio of all, or substantially all, of
its assets to another entity, or the liquidation or dissolution of a Fund or Portfolio and
distribution of such Fund’s or Portfolio’s assets, in each case where the Custodian is retained to
continue providing services to such Fund or Portfolio (or its respective successor) on
substantially the same terms as this Agreement.
Termination of this Agreement with respect to any one particular Fund or Portfolio shall in no way
affect the rights and duties under this Agreement with respect to any other Fund or Portfolio. The
provisions of Sections 4.11, 14 and 15 of this Agreement shall survive termination of this
Agreement for any reason.
This Agreement may be amended at any time in writing by mutual agreement of the parties hereto.
Section 17. Successor Custodian.
If a successor custodian for one or more Portfolios shall be appointed by the applicable Board, the
Custodian shall, upon termination and receipt of Proper Instructions, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for transfer, all
securities of each applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in a Securities System
or at the Underlying Transfer Agent.
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If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon
receipt of Proper Instructions, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such resolution.
In the event that no Proper Instructions designating a successor custodian or alternative
arrangements shall have been delivered to the Custodian on or before the date when such termination
shall become effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a “bank” as defined in the 1940 Act, doing business in Boston, Massachusetts or
New York, New York, of its own selection, having an aggregate capital, surplus, and undivided
profits, as shown by its last published report, of not less than $25,000,000, all securities, funds
and other properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held by it under this
Agreement on behalf of each applicable Portfolio, and to transfer to an account of such successor
custodian all of the securities of each such Portfolio held in any Securities System or at the
Underlying Transfer Agent. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement.
In the event that securities, funds and other properties remain in the possession of the Custodian
after the date of termination hereof owing to failure of any Fund to provide Proper Instructions as
aforesaid, the Custodian shall be entitled to fair compensation for its services during such period
as the Custodian retains possession of such securities, funds and other properties and the
provisions of this Agreement relating to the duties and obligations of the Custodian shall remain
in full force and effect.
Section 18. General.
Section 18.1 Massachusetts Law to Apply. This Agreement shall be construed
and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
Section 18.2 Prior Agreements. This Agreement supersedes and terminates, as
of the date hereof, all prior Agreements between each Fund on behalf of each of the Portfolios and
the Custodian relating to the custody of such Fund’s assets.
Section 18.3 Assignment. This Agreement may not be assigned by (a)
any Fund without the written consent of the Custodian or (b) by the Custodian without the written
consent of each applicable Fund.
Section 18.4 Interpretive and Additional Provisions. In connection
with the operation of this Agreement, the Custodian and each Fund on behalf of each of the
Portfolios, may from time to time agree on such provisions interpretive of or in addition to the
provisions of this Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. Any such interpretive or additional provisions shall be in a writing signed by all
parties and shall be annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of a Fund’s Governing
Documents. No interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
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Section 18.5 Additional Funds. In the event that any management
investment company in addition to those listed on Appendix A hereto desires to have the Custodian
render services as custodian under the terms hereof, it shall so notify the Custodian in writing,
and if the Custodian agrees in writing to provide such services, such management investment company
shall become a Fund hereunder and be bound by all terms and conditions and provisions hereof
including, without limitation, the representations and warranties set forth in Section 18.7 below.
Section 18.6 Additional Portfolios. In the event that any Fund
establishes one or more series of Shares in addition to those set forth on Appendix A hereto with
respect to which it desires to have the Custodian render services as custodian under the terms
hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
Section 18.7 The Parties. All references herein to the “Fund” are to each
of the management investment companies listed on Appendix A hereto, and each management investment
company made subject to this Agreement in accordance with Section 18.5 above, individually, as if
this Agreement were between such individual Fund and the Custodian. In the case of a series
corporation, trust or other entity, all references herein to the “Portfolio” are to the individual
series or portfolio of such corporation, trust or other entity, or to such corporation, trust or
other entity on behalf of the individual series or portfolio, as appropriate. Any reference in
this Agreement to “the parties” shall mean the Custodian and such other individual Fund as to which
the matter pertains. Each Fund hereby represents and warrants that (a) it is duly incorporated or
organized and is validly existing in good standing in its jurisdiction of incorporation or
organization; (b) it has the requisite power and authority under applicable law and its Governing
Documents to enter into and perform this Agreement; (c) all requisite proceedings have been taken
to authorize it to enter into and perform this Agreement; (d) this Agreement constitutes its legal,
valid, binding and enforceable agreement; and (e) its entrance into this Agreement shall not cause
a material breach or be in material conflict with any other agreement or obligation of the Fund or
any law or regulation applicable to it.
Section 18.8 Remote Access Services Addendum. The Custodian and each Fund
agree to be bound by the terms of the Remote Access Services Addendum hereto.
Section 18.9 Notices. Any notice, instruction or other instrument
required to be given hereunder may be delivered in person to the offices of the parties as set
forth herein during normal business hours or delivered prepaid registered mail or by telex, cable
or telecopy to the parties at the following addresses or such other addresses as may be notified by
any party from time to time.
To any Fund: |
c/o RidgeWorth Funds | |
| 00 Xxxx Xxxxx, Xxxxx 0000 | ||
| Xxxxxxx, XX 00000 | ||
| Attention: RidgeWorth Funds' President | ||
| Telephone: 000-000-0000 | ||
| Telecopy: 000-000-0000 |
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To the Custodian: |
State Street Bank and Trust Company | |
| Lafayette Corporate Center | ||
| 0 Xxxxxx xx Xxxxxxxxx — XXX/0 | ||
| Xxxxxx, XX 00000 | ||
| Attention: Xxxx X. Xxxxxxxx, Senior Vice President | ||
| Telephone: 000-000-0000 | ||
| Telecopy: 000-000-0000 |
Such notice, instruction or other instrument shall be deemed to have been served in the case of a
registered letter at the expiration of five business days after posting, in the case of cable
twenty-four hours after dispatch and, in the case of telex, immediately on dispatch and if
delivered outside normal business hours it shall be deemed to have been received at the next time
after delivery when normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was properly addressed,
stamped and put into the post shall be conclusive evidence of posting.
Section 18.10 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, and all such counterparts
taken together shall constitute one and the same Agreement.
Section 18.11 Severability. If any provision or provisions of this
Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired.
Section 18.12 Confidentiality. The parties hereto agree that each shall
treat confidentially all information provided by each party to the other party regarding its
business and operations. All confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering or receiving services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to
any third party. The foregoing shall not be applicable to any information (i) that is publicly
available when provided or thereafter becomes publicly available, other than through a breach of
this Agreement, or that is independently derived by any party hereto without the use of any
information provided by the other party hereto in connection with this Agreement, (ii) that is
required in any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil
investigative demand or other similar process, or by operation of law or regulation, or (iii) where
the party seeking to disclose has received the prior written consent of the party providing the
information, which consent shall not be unreasonably withheld. Notwithstanding anything herein to
the contrary, the Custodian and its affiliates may report and use nonpublic portfolio holdings
information of its clients, including a Fund or Portfolio, on an aggregated basis with all or
substantially all other client information and without specific reference to any Fund or Portfolio.
Section 18.13 Reproduction of Documents. This Agreement and all schedules,
addenda, exhibits, appendices, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process.
The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the original is in
existence and whether
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or not such reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 18.14 Regulation GG. Each Fund hereby represents and warrants that
it does not engage in an “Internet gambling business,” as such term is defined in Section 233.2(r)
of Federal Reserve Regulation GG (12 CFR 233) (“Regulation GG”). Each Fund hereby covenants and
agrees that it shall not engage in an Internet gambling business. In accordance with Regulation
GG, each Fund is hereby notified that “restricted transactions,” as such term is defined in Section
233.2(y) of Regulation GG, are prohibited in any dealings with the Custodian pursuant to this
Agreement or otherwise between or among any party hereto.
Section 18.15 Data Privacy. The Custodian will implement and maintain a
written information security program that contains appropriate security measures to safeguard the
personal information of the Funds’ shareholders, employees, directors and/or officers that the
Custodian receives, stores, maintains, processes or otherwise accesses in connection with the
provision of services hereunder. For these purposes, “personal information” shall mean (i) an
individual’s name (first initial and last name or first name and last name), address or telephone
number plus (a) social security number, (b) drivers license number, (c) state
identification card number, (d) debit or credit card number, (e) financial account number or (f)
personal identification number or password that would permit access to a person’s account or (ii)
any combination of the foregoing that would allow a person to log onto or access an individual’s
account. Notwithstanding the foregoing “personal information” shall not include information that
is lawfully obtained from publicly available information, or from federal, state or local
government records lawfully made available to the general public.
Section 18.16 Disaster Recovery Procedures. The Custodian will implement
and maintain reasonable disaster recovery and business continuity procedures that are reasonably
designed to recover data processing systems, data communications facilities, information, data and
other business related functions of the Custodian in a manner and time frame consistent with legal,
regulatory and business requirements applicable to the Custodian in its provision of services
hereunder.
Section 18.17 Shareholder Communications Election. SEC Rule 14b-2 requires
banks which hold securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of securities of that issuer
held by the bank unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs each Fund to indicate whether
it authorizes the Custodian to provide such Fund’s name, address, and share position to requesting
companies whose securities the Fund owns. If a Fund tells the Custodian “no,” the Custodian will
not provide this information to requesting companies. If a Fund tells the Custodian “yes” or does
not check either “yes” or “no” below, the Custodian is required by the rule to treat the Fund as
consenting to disclosure of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For a Fund’s protection, the Rule prohibits the requesting
company from using the Fund’s name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of the alternatives
below.
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YES o
|
The Custodian is authorized to release the Fund’s name, address, and share positions. | |
NO þ
|
The Custodian is not authorized to release the Fund’s name, address, and share positions. |
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Signature Page
In Witness Whereof, each of the parties has caused this instrument to be executed in
its name and behalf by its duly authorized representative under seal as of the date first
above-written.
| EACH OF THE ENTITIES SET FORTH ON APPENDIX A HERETO |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | President, RidgeWorth Funds | |||
| STATE STREET BANK AND TRUST COMPANY |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Executive Vice President | |||
Management Investment Companies Registered with the SEC and Portfolios thereof, If
Any
Aggressive Growth Allocation Strategy
Aggressive Growth Stock Fund
Conservative Allocation Strategy
Corporate Bond Fund
Emerging Growth Stock Fund
Georgia Tax-Exempt Bond Fund
Growth Allocation Strategy
High Grade Municipal Bond Fund
High Income Fund
Intermediate Bond Fund
International Equity 130/30 Fund
International Equity Fund
International Equity Index Fund
Investment Grade Bond Fund
Investment Grade Tax-Exempt Bond Fund
Large Cap Core Equity Fund
Large Cap Growth Stock Fund
Large Cap Quantitative Equity Fund
Large Cap Value Equity Fund
Limited Duration Fund
Limited-Term Federal Mortgage Securities Fund
Maryland Municipal Bond Fund
Mid-Cap Core Equity Fund
Mid-Cap Value Equity Fund
Moderate Allocation Strategy
North Carolina Tax Exempt Bond Fund
Real Estate 130/30 Fund
Seix Floating Rate High Income Fund
Seix Global Strategy Fund
Seix High Yield Fund
Select Large Cap Growth Stock Fund
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Total Return Bond Fund
U.S. Equity 130/30 Fund
U.S. Government Securities Fund
U.S. Government Securities Ultra-Short Bond Fund
Ultra-Short Bond Fund
Virginia Intermediate Municipal Bond Fund
Aggressive Growth Stock Fund
Conservative Allocation Strategy
Corporate Bond Fund
Emerging Growth Stock Fund
Georgia Tax-Exempt Bond Fund
Growth Allocation Strategy
High Grade Municipal Bond Fund
High Income Fund
Intermediate Bond Fund
International Equity 130/30 Fund
International Equity Fund
International Equity Index Fund
Investment Grade Bond Fund
Investment Grade Tax-Exempt Bond Fund
Large Cap Core Equity Fund
Large Cap Growth Stock Fund
Large Cap Quantitative Equity Fund
Large Cap Value Equity Fund
Limited Duration Fund
Limited-Term Federal Mortgage Securities Fund
Maryland Municipal Bond Fund
Mid-Cap Core Equity Fund
Mid-Cap Value Equity Fund
Moderate Allocation Strategy
North Carolina Tax Exempt Bond Fund
Real Estate 130/30 Fund
Seix Floating Rate High Income Fund
Seix Global Strategy Fund
Seix High Yield Fund
Select Large Cap Growth Stock Fund
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Total Return Bond Fund
U.S. Equity 130/30 Fund
U.S. Government Securities Fund
U.S. Government Securities Ultra-Short Bond Fund
Ultra-Short Bond Fund
Virginia Intermediate Municipal Bond Fund
