CUSTODY AGREEMENT
AGREEMENT, effective March 30, 1998, between THE CHASE MANHATTAN BANK (the
"Bank") and THE LINCOLN NATIONAL MANAGED FUND, INC. ("Customer") a registered
investment company under the Investment Company Act of 1940, as amended.
CUSTODY ACCOUNT DEFINED. The Customer hereby requests the Bank to open and
to maintain a "Custody Account" in the Customer's name as Entitlement Holder, in
order to hold therein, as the Customer's Securities Intermediary, upon the
following terms and conditions, all Financial Assets which are the property of
Customer. As used herein, the term "Custody Account" shall include all such
custody accounts opened pursuant to this Custody Agreement (the "Agreement").
From time to time, Customer may instruct the Bank to open additional Custody
Accounts in Customer's name. Unless Customer and Bank shall otherwise expressly
agree in writing, all such Custody Accounts shall be governed by the terms of
this Agreement.
OTHER DEFINITIONS.
"Financial Assets" means Securities. As the context requires a Financial
Asset means either the interest itself or the means by which a person's
claim to it is evidenced, including a certificated or uncertificated
Security, a security certificate, or a Security Entitlement.
"Securities" means stocks, bonds, rights, warrants and other negotiable and
non-negotiable paper issued in certificated form or in uncertificated form
and commonly traded or dealt in on securities exchanges or financial
markets, and other obligations of an issuer, or shares, participations and
interests in an issuer recognized in any area in which it is issued or
dealt in as a medium for investment and any other property as shall be
acceptable to you for the Custody Account.
"Security Entitlement" means the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in Part 5
of Article 8 of the New York Uniform Commercial Code.
"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against
the Securities Intermediary.
"Securities Intermediary" means the Bank, a Depository, and any other
financial institution which in the ordinary course of its business
maintains Securities accounts for others and acts in that capacity.
"Instructions" shall have the meaning set forth in Section 2 of this
Agreement.
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1. TRANSACTIONS
(A) TRANSACTIONS REQUIRING INSTRUCTIONS
(i) Receipt and Disbursement of Funds
Bank shall open and maintain a separate cash account in the
name of the Customer for each Custody Account ("Custody Cash
Account") to which cash will be credited and debited in respect
of all transactions to the Custody Account pursuant to this
Agreement, and in which cash shall not be subject to withdrawal
by check or draft. Bank shall make payment from the Custody
Cash Account only upon the Instructions of the Customer.
Bank is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by
Bank for the account of the Customer.
(ii) Segregated Account
Upon receipt of Instructions from Customer, Bank will establish
and maintain a segregated Securities account or accounts on
Bank's records for and on behalf of Customer, in which may be
credited cash and/or Financial Assets:
(a) in accordance with the provisions of an agreement among
Customer and a broker/dealer (registered under the
Securities and Exchange Act of 1934 ("Exchange Act")
and a member of the National Association of Securities
Dealers, Inc. ("NASD"), 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 Commodity Futures Training
Commission or any registered contract market), or of
any similar organization, regarding escrow or other
arrangements in connection with the transactions by
Customer;
(b) for the purpose of segregating cash or Financial Assets
with options purchased or sold by Customer; and
(c) for other proper corporate purposes as per the
Instruction of an Authorized Officer.
(iii) Receipt and Holding of Securities
Bank shall hold in the Custody Account, and at all times
separate from the assets of Bank, all Financial Assets
(including Securities received by it in physical form) for the
account of the Customer. All such Financial Assets
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held in the Custody Account are to be held or disposed of by
Bank for, and subject at all times to the Instructions of, the
Customer pursuant to the terms of this Agreement. The Bank
shall have no power or authority to assign, hypothecate, pledge
or otherwise dispose of any such Financial Assets and
investments, except pursuant to the Instructions of the
Customer and except as permitted by Section 14 hereof.
Unless the Bank receives contrary Instructions from the
Customer, the Bank is authorized to keep certificated
Securities in the Bank's own vaults (and to the extent it does
so, Bank shall maintain those Securities separate from the
securities it maintains for its other customers), or in book
entry form registered in the Bank's name or in the name of the
Bank's nominee or nominees or, where Securities are eligible
for deposit in a Depository (hereinafter defined), such as The
Depository Trust Company, the Federal Reserve Bank of New York
or Participants Trust Company, the Bank may use any such
Depository and permit the registration of registered Securities
in the name of its nominee or nominees, and the Customer agrees
to hold the Bank and the nominees harmless from any liability
as holders of record. The Customer shall accept the return or
delivery of Securities of the same class and denomination as
those deposited with the Bank by the Customer or otherwise
received by the Bank for the Custody Account, and the Bank need
not retain the particular certificates so deposited or
received.
If any of the Customer's Securities registered in the Bank's
name or the name of the Bank's nominee or held in a Depository
and registered in the name of the Depository's nominee are
called for partial redemption by the issuer of such Securities,
the Bank is authorized to allot the called portion to the
respective beneficial holders of the Securities in any manner
deemed to be fair and equitable by the Bank in the Bank's sole
discretion.
(iv) Transfer, Exchange, Redelivery of Securities
The Bank shall release or deliver any Financial Assets of the
Customer held by it only as authorized by this Agreement. The
Bank agrees to transfer, exchange, or deliver Financial Assets
held by it hereunder (a) for the sale of such Financial Assets
for the account of the Customer against receipt by the Bank of
payment therefor; (b) when such Financial Assets are called,
redeemed or retired or otherwise become payable; (c) in
exchange for or upon conversion into other Financial Assets
alone or other Financial Assets and cash, whether pursuant to
any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise; (d) upon
conversion of such Financial Assets, pursuant to their terms,
into other Financial Assets; (e) upon exercise of subscription,
purchase or other similar rights represented by such
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Financial Assets; (f) for the purpose of exchanging interim
receipts or temporary certificated Securities for definitive
certificated Securities; or (g) for other corporate purposes.
As to any deliveries made by the Bank pursuant to items (a),
(b), (c), (d), (e), (f) and (g), Financial Assets or cash
receivable in exchange therefor shall be deliverable to or for
the account of the Bank and credited by Bank to the Custody
Account or the Custody Cash Account, as appropriate.
Before making any transfer, exchange or delivery, as per items
(a) through (g), the Bank shall receive an Instruction
authorizing such transfer, exchange or delivery.
(B) TRANSACTIONS WITHOUT INSTRUCTIONS
Unless and until the Bank receives an Officer's Certificate (defined
in Section 2 hereof) to the contrary, the Bank shall: (a) present for
payment all coupons and other income items held by it for the account
of the Customer which call for payment upon presentation, and credit
such payment to the Custody Cash Account; (b) collect interest and
cash dividends received, with notice to the Customer, and credit such
interest and cash dividends to the Custody Cash Account; (c) deposit
to the Custody Account all stock dividends, rights and similar
Securities (except for fractional shares) issued with respect to any
Securities held by it hereunder; (d) execute as agent on behalf of the
Customer all necessary ownership certificates required by the Internal
Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any State now or hereafter in
effect, inserting the Customer's name on such certificate as the owner
of the Securities covered thereby, to the extent it may lawfully do
so.
2. INSTRUCTIONS.
(A) DEFINITION. As used in this Agreement the term "Instructions"
includes, without limitation, instructions to sell, assign, transfer,
deliver, purchase, hold or receive for the Custody Account, any and
all stocks, bonds and other Financial Assets, or to transfer funds in
the Custody Cash Account.
(B) BY RESOLUTION OR CERTIFICATE. The Bank is authorized to rely and
act upon all written Instructions given or purported to be given
by one or more officers, employees or agents of the Customer
(i) authorized by or in accordance with a corporate resolution
of the Customer delivered to the Bank; or (ii) described as
authorized in a certificate ("Officer's Certificate") delivered
to the Bank by the Customer's Secretary or an Assistant Secretary
or similar officer of the Customer (each such officer, employee or
agent or combination of officers, employees and agents authorized
pursuant to clause (i) or described pursuant to clause (ii) of this
paragraph (B) is hereinafter referred to as an "Authorized Officer").
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(C) BY FACSIMILE SIGNATURE. The Bank may rely and act upon Instructions,
otherwise valid, which bear or purport to bear the facsimile signature
of any Authorized Officer regardless of by whom or by what means the
actual or purported facsimile signature or signatures thereon may have
been affixed thereto, if such facsimile signature or signatures
resemble the facsimile specimen or specimens from time to time
furnished to the Bank by any of such Authorized Officers, the
Customer's Secretary or an Assistant Secretary or similar officer of
the Customer.
(D) OTHER ACCEPTABLE INSTRUCTIONS. The Bank may rely and act upon
Instructions received by telex, facsimile transmission, bank wire or
other teleprocess, electronic or electro-magnetic medium or electronic
instruction or trade information system acceptable to the Bank, which
Instructions the Bank believes in good faith to have been given by an
Authorized Officer or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may
specify. The Bank may also rely and act upon Instructions transmitted
electronically through the Bank's TITAN Data Entry System or any
similar electronic instruction system acceptable to the Bank.
Subject to the next following paragraph with respect to the transfer
of cash from the Custody Cash Account, the Bank may rely and act upon
any Instructions delivered to the Bank by telephone, and Instructions
delivered by telephone shall be promptly thereafter confirmed in
writing by an Authorized Officer; however, the Bank shall incur no
liability for the Customer's failure to send such confirmation in
writing, for the failure of any such written confirmation to conform
to the telephone Instructions which the Bank received, or for the
failure of any such written confirmation to be signed or properly
signed.
With respect to Instructions by telephone from an Authorized Officer
to transfer cash from the Custody Cash Account, PRIOR TO EXECUTING
EACH SUCH INSTRUCTION the Bank shall obtain oral confirmation for the
transfer by calling back any one of the individuals on a list of
persons authorized to confirm those oral funds transfer Instructions
(which individual shall not be the initiator of that Instruction), and
the Bank shall NOT transfer the cash until it has received that oral
confirmation. Written confirmation shall thereafter promptly be given
by the Customer; however, the Bank shall incur no liability for the
Customer's failure to send such confirmation in writing, for the
failure of any such written confirmation to conform to the telephone
Instructions which the Bank received, or for the failure of any such
written confirmation to be signed or properly signed.
(E) ADDITIONAL TERMS RELATING TO INSTRUCTIONS. The Bank shall incur no
liability to the Customer or otherwise when the Bank acts or refrains
from acting, as the case may be, in accordance with Instructions on
which the Bank is authorized to rely
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pursuant to the provisions of this Agreement. In addition, the Bank
shall incur no liability for refraining from acting upon any
Instructions which for any reason the Bank, in good faith, is unable
to verify to the Bank's own satisfaction.
Unless otherwise expressly provided, all authorizations and
Instructions shall continue in full force and effect until canceled or
superseded by subsequent authorizations or Instructions received by
the Bank's account administrator with reasonable opportunity to act
thereon. The Bank's authorization to rely and act upon Instructions
pursuant to this paragraph shall be in addition to, and shall not
limit, any other authorization which the Customer may give the Bank
regarding the Customer's accounts with the Bank.
The Customer agrees that, if the Bank requires test arrangements,
authentication methods or procedures or other security devices to be
used with respect to Instructions which the Customer may give
hereunder, thereafter Instructions given by the Customer shall be
given and processed in accordance with terms and conditions for the
use of such arrangements, methods or procedures or devices as the Bank
may put into effect and modify from time to time. The Customer shall
safeguard any testkeys, identification codes or other security devices
which the Bank makes available to the Customer and Customer agrees
that it shall be responsible for any loss, liability or damage
incurred by the Bank or by itself as a result of the Bank's acting in
accordance with Instructions from any unauthorized person using the
proper security device, unless that unauthorized use is the result of
the Bank's negligence or willful misconduct. Either party may
electronically record any Instructions given by telephone, and any
other telephone discussions with respect to the Custody Account or
transactions pursuant to this Agreement.
Except as may be provided otherwise herein, the Bank is authorized to
execute the Customer's Instructions and take other actions pursuant to
this Agreement in accordance with the Bank's customary processing
practices for customers similar to the Customer and, in accordance
with such practices, the Bank may retain agents, including
subsidiaries or affiliates of the Bank, to perform certain of such
functions.
In acting upon Instructions to deliver Securities against payment, the
Bank is authorized, in accordance with customary securities processing
practices, to deliver such Securities to the purchaser thereof or
dealer therefor (including to an agent for any such purchaser or
dealer) against a receipt, with the expectation of collecting payment
from the purchaser, dealer or agent to whom the Securities were so
delivered before the close of business on the same day.
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3. STATEMENTS
The Bank shall notify the Customer of each Financial Asset transaction
effected for the Custody Account and of income on and redemptions of the
Financial Assets in the Custody Account, as well as furnish the Customer a
listing of such Financial Assets, at such times upon which the Bank and the
Customer mutually agree. Periodic statements shall be rendered to the
Customer as the Customer may reasonably require, but not less frequently
than monthly.
Unless Customer shall send to Bank a written exception or objection to any
statement of account within 60 days of Customer's receipt of such statement
from Bank, Customer shall be deemed to have approved such statement, except
for items which the Bank later discovers and corrects, and except for
items which Customer discovers after the 60-day period and which Customer
could not reasonably have been expected to discover within the 60-day
period. In any instance in which any statement shall be deemed to have
been approved by Customer, or where Customer has otherwise approved such
statement, Bank shall, to the extent permitted by law, be released,
relieved and discharged with respect to all matters set forth in such
statement or reasonably implied therefrom.
4. ACCESS TO RECORDS
Books and records of the Bank relating to the Custody Account and the
Custody Cash Account shall be open to inspection and audit at all
reasonable times during normal business hours upon request of, and
reasonable advance notice by, Customer's independent public accountants;
directors, officers, employees or agents of the Customer designated to the
Bank; and legally authorized regulatory officials (upon proof to the Bank
of such official status) who are then in the process of reviewing the
Customer's financial affairs.
5. CORPORATE ACTIONS
Promptly after sufficient copies are received by the Bank for forwarding to
customers, the Bank shall send to Customer, or to Customer's designee, such
proxies (signed in blank, if issued in the Bank's name or the name of the
Bank's nominee or a nominee of a Depository) and communications with
respect to the Financial Assets in the Custody Account which call for
voting or which relate to legal proceedings. In addition, the Bank shall
follow coupon payments, redemptions, exchanges or similar matters with
respect to the Financial Assets in the Custody Account and promptly advise
the Customer of rights issued, tender offers or any other discretionary
rights with respect to such Financial Assets, in each case, of which the
Bank receives notice at its Corporate Action Department from the issuer or
from the Depository in which such Financial Assets are held for the account
of the Bank, or from notice published in publications and reported in
reporting services routinely used by the Bank for this purpose.
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6. CUSTODIAN RESPONSIBILITY
The Bank shall be obligated to indemnify the Customer for the loss of
Financial Assets credited to the Custody Account resulting from (i) the
negligence or willful misconduct of the Bank or the Bank's officers,
employees or agents retained by the Bank to hold such Financial Assets; or
(ii) burglary, robbery, hold-up, theft or mysterious disappearance,
including loss by damage or destruction. In the event of a loss of
Financial Assets held in the Custody Account for which the Bank is required
to indemnify the Customer pursuant to the immediately preceding sentence,
at the Bank's option but subject to mutual agreement of the parties, the
Bank shall promptly either: a) replace such Financial Assets by, among
other means, posting appropriate security or bond with the issuer(s) of
such Financial Assets and obtaining their reissue; or 2) replace (i) the
value thereof determined based upon the market value of the Financial
Assets which are the subject of such loss as of the date of the discovery
of such loss, and (ii) the value of any loss of rights or privileges
resulting from the loss of such Financial Assets. The foregoing indemnity
shall be the Bank's exclusive liability to the Customer for the Bank's loss
of Financial Assets from the Custody Account.
In respect of all the Bank's other duties and obligations pursuant to the
terms of this Agreement, the Bank shall be liable to the Customer only to
the extent of the Customer's general damages suffered or incurred as a
result of any act, omission, or failure to act of the Bank or the Bank's
officers, employees or agents which constitutes negligence or willful
misconduct. General damages shall mean only those damages as directly and
necessarily result from such act or omission without reference to any
special conditions or circumstances of the Customer or of any transaction,
whether or not the Bank has been advised of any such special conditions or
circumstances. Anything in this Agreement to the contrary notwithstanding,
in no event shall the Bank be liable to the Customer under this Agreement
for special, indirect or consequential loss or damage of any kind
whatsoever, whether or not the Bank is advised as to the possibility of
such loss or damage and regardless of the form of action through which any
such loss or damage may be claimed.
With respect to Depositories, the Customer agrees to be bound by the
Depository rules and procedures applicable to the Bank as a participant in
respect of any securities held by the Bank in the Bank's account with such
Depository. "Depository" shall mean a "securities depository" as defined
in Rule 17f-4 of the Investment Company Act of 1940.
All collection and receipt of funds or Financial Assets and all payment and
delivery of funds or Financial Assets under this Agreement shall be made by
the Bank as the Customer's agent, at the Customer's risk with respect to
the Customer's actions or omissions and those of persons other than the
Bank (except for a Depository), including, without limitation, the risk
associated with the securities processing practice of delivering securities
against a receipt and the risk that the counterparty in any transaction
into which the Customer enters will not transfer funds or Financial Assets
or otherwise perform in accordance with the Customer's expectation of its
obligations thereunder.
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In no event shall the Bank be responsible or liable for any loss due to
forces beyond the Bank's control, including, but not limited to, acts of
God, flood, nuclear fusion, fission or radiation, war (declared or
undeclared), terrorism, insurrection, revolution, riot, strikes or work
stoppages for any reason, embargo, closure or disruption of any market,
government action, including any laws, ordinances, regulations or the like
which restrict or prohibit the providing of the services contemplated by
this Agreement. In the event that the Bank is unable substantially to
perform for any of the reasons described in the immediately preceding
sentence, the Bank shall so notify the Customer as soon as reasonably
practicable.
The Bank shall be responsible for only those duties expressly stated in
this Agreement or expressly contained in Instructions to perform the
services described herein given to the Bank pursuant to the provisions of
this Agreement and accepted by the Bank. Without limiting the foregoing,
the Bank shall have no duty or responsibility:
(A) to supervise the investment of, or make recommendations with respect
to the purchase, retention or sale of, Financial Assets relating to
the Custody Account, or to maintain any insurance on the Financial
Assets in the Custody Account for the Customer's benefit;
(B) with regard to any Financial Asset in the Custody Account as to which
a default in the payment of principal or interest has occurred: (i) to
give notice of default or make demand for payment to the issuer or
(ii) to take any other action with respect to such default except, in
each instance, where the Bank has been requested by the Customer and
the Bank has agreed in writing to do so;
(C) for any act or omission, or for the solvency or insolvency, or notice
to the Customer of the solvency or insolvency, of any broker or agent
which is selected by the Customer or any third party to effect any
transaction for the Custody Account or to perform any service under
this Agreement;
(D) to evaluate, or report to the Customer regarding, the financial
condition of any person, firm or corporation to which the Bank
delivers Financial Assets or funds pursuant to this Agreement;
(E) for any loss occasioned by delay in the actual receipt of notice by
the Bank of any payment, redemption or other transaction in respect to
which the Bank is authorized to take some action pursuant to this
Agreement, (unless the delay was caused by the negligence or
intentional misconduct of Bank); or
(F) for any errors or omissions made by any third party securities pricing
service used by the Bank to value Securities credited to the Custody
Account as part of any service subscribed to by the Customer from the
Bank.
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7. SETTLEMENTS
The Customer agrees with the Bank that all credits of Financial Assets and
funds by the Bank to the Custody Account and the Custody Cash Account,
respectively, on the settlement or payable date shall be provisional when
made and the Bank shall be entitled to reverse any such credits subject to
actual receipt or collection of immediately available funds.
The Customer shall have sufficient immediately available funds each day in
the Custody Cash Account to pay for the settlement of all Financial Assets
delivered to the Bank against payment and credited to the Custody Account.
Should the Customer fail to have sufficient immediately available funds in
the Custody Cash Account to settle these deliveries of Financial Assets
pursuant to the preceding sentence, this shall constitute a "Deficit." In
the event of a Deficit the Bank, in its sole discretion, may elect (i) to
reject the settlement of any or all of the Financial Assets delivered to
the Bank that day to the Custody Account; (ii) to settle the deliveries on
the Customer's behalf and debit the Custody Cash Account (A) for the amount
of such Deficit, and (B) for the amount of the funding or other cost or
expense incurred or sustained by the Bank for the Customer's failure to
have sufficient immediately available funds in the Custody Cash Account by
the applicable settlement deadline for Customer; or (iii) to reverse the
posting of the Financial Assets credited to the Custody Account.
Bank shall have the right to reverse any erroneous or provisional credit
entries to the Custody Cash Account retroactively to the date upon which
the correct entry, or no entry, should have been made.
The foregoing rights are in addition to and not in limitation of any other
rights or remedies available to the Bank under this Agreement or otherwise.
Any advances made by the Bank to the Customer in connection with the
purchase, sale, redemption, transfer or other designation of Financial
Assets or in connection with disbursements of funds to any party, which
create or result in an overdraft in the Custody Cash Account shall be
deemed a loan by the Bank to the Customer, payable on demand, and bear
interest on the amount of the loan each day that the loan remains unpaid at
the Bank's prime rate in effect as announced by the Bank from time to time.
No prior action or course of dealing on the Bank's part with respect to the
settlement of securities transactions on the Customer's behalf shall be
used by or give rise to any claim or action by the Customer against the
Bank for the Bank's refusal to pay or settle for a securities transaction
the Customer has not timely funded as required herein.
8. DEPOSITORIES
The parties agree that, as of the date of this Agreement, the Depositories
the use of which the Customer has consented are Federal Reserve/Treasury
Book Entry System (the "System"),
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Participant's Trust Company ("PTC"), and The Depository Trust Company
("DTC"). Other Depositories may be used under this Agreement if both
parties consent in writing to the use thereof.
If and to the extent that the Depositories permit the withdrawal of a
Financial Asset in certificated form and Customer requires a certificate
for making a loan or otherwise, Custodian shall take all necessary and
appropriate action to obtain such certificate upon receipt of an Officer's
Certificate requesting the same.
9. RESPONSIBLE AS PRINCIPAL
The Customer agrees that the Customer shall be responsible to the Bank as a
principal for all of the Customer's obligations to the Bank arising under
or in connection with this Agreement, notwithstanding that the Customer may
be acting on behalf of other persons, and the Customer warrants the
Customer's authority to deposit in the Custody Account and Custody Cash
Account, respectively, any Financial Assets and funds which the Bank
receives therefor and to give Instructions relative thereto. The Customer
further agrees that the Bank shall not be subject to, nor shall the Bank's
rights and obligations with respect to this Agreement and the Custody
Account or the Custody Cash Account be affected by, any agreement between
the Customer and any such person.
10. CREDITING AND DEBITING PROCEDURES
With respect to all transactions for the Custody Account and the Custody
Cash Account, including, without limitation, dividend and interest payments
and sales and redemptions of Financial Assets, availability of funds
credited to the Custody Account and Custody Cash Account shall be based on
the type of funds used in the trade settlement or payment, including, but
not limited to, same day availability for federal or same day funds and
next business day availability for clearing house or next day funds.
Furthermore, with respect to all purchases and sales of Financial Assets
for the Custody Account, the proceeds from the sale of Financial Assets
shall be credited to the Custody Cash Account on the date proceeds are
received by the Bank and the cost of Financial Assets purchased shall be
debited to the Custody Cash Account on the date Financial Assets are
received by the Bank, unless the Customer requests the Bank's contractual
settlement service for the Custody Account in which case the following
provisions shall apply with respect to the delivery and receipt of
Financial Assets for the Custody Account for those Financial Assets and
transactions as to which the Bank customarily offers this service:
(A) When the Customer instructs the Bank to deliver or receive Financial
Assets, on the contractual settlement date the Bank shall credit the
Custody Cash Account with the expected proceeds of the transaction and
debit the Custody Account for the Financial Assets which the Customer
has instructed the Bank to deliver, in the case of deliveries, and
debit the Custody Cash Account for the cost of the Financial Assets
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which the Customer has instructed the Bank to receive and credit the
Custody Account with such Financial Assets, in the case of receives.
These credits and debits are provisional accounting entries which the
Bank shall reverse on the Customer's Instructions and which the Bank
may reverse, even in the absence of Instructions from Customer, if the
transaction with respect to which they were made fails to settle
within a reasonable period, determined by the Bank in the Bank's
discretion, after the contractual settlement date, except that if the
Bank delivers Financial Assets which are returned by the recipient
thereof, the Bank may reverse such credits and debits at any time.
The Bank has no obligation to use this crediting and debiting
procedure with respect to a delivery of Financial Assets if the
Customer does not have actually in the Customer's account sufficient
Financial Assets to make the delivery.
(B) As with other transactions processed by the Bank, the Bank's
responsibility with respect to transactions for which the Bank uses
this crediting and debiting procedure shall be governed by the
provisions of this Custody Agreement, including the section headed
"Custodian Responsibility". The Customer agrees that the Bank's using
this procedure is not an assurance by the Bank that the transaction
will actually settle on the contractual settlement date and does not
impose any additional responsibility on the Bank with respect to the
transaction. Without limiting the Bank's right to reverse credits and
debits described above, the account statements which the Bank
furnishes to the Customer shall reflect transactions as to which the
Bank uses this procedure as if they had actually settled on the
contractual settlement date, unless prior to the date to which the
statement relates, the Bank has reversed such credits and debits.
(C) The Customer agrees that the Bank may terminate this contractual
settlement service to the Customer at any time and for any reason.
With respect to Financial Assets or transactions as to which the Bank
does not customarily offer this service, the Bank shall (i) in the
case of deliveries of Financial Assets, credit the proceeds of the
transaction to the Custody Cash Account on the date they are received
by the Bank and debit the Financial Assets from the Custody Account on
the date they are delivered by the Bank, and (ii) in the case of
Financial Assets received, debit the Custody Cash Account for the
cost of such Financial Assets and credit the Custody Account with such
Financial Assets on the date the Financial Assets are received by the
Bank.
11. TAXES
Unless the Customer has already done so, the Customer shall deliver
promptly to the Bank with respect to each Custody Account established under
this Agreement, two duly completed and executed copies of United States
Internal Revenue Service Form W-9, certifying that the Customer is entitled
to receive United States source payments under or in connection with this
Agreement without deduction as withholding or at a reduced rate of
withholding for
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United States federal income taxes. The Customer agrees to provide duly
executed and completed updates of such form (or successor applicable
forms), on or before the date that such form expires or becomes obsolete or
after the occurrence of an event requiring a change in the most recent form
previously delivered by the Customer to the Bank.
Upon receipt of Instructions the Bank is authorized to deduct from the cash
received or credited to the Custody Cash Account any taxes or levies
required by any revenue or governmental authority for whatever reason in
respect of Custody Account.
The Customer further agrees to pay, indemnify, and hold the Bank harmless
from and against any and all liabilities, penalties, interest or additions
to tax with respect to, or resulting from, any delay in, or failure by, the
Bank (i) to pay, withhold or report any federal, state or foreign taxes
imposed on, or in respect of, the property held in the Custody Account(s),
or this Agreement, or (ii) to report interest, dividend or other income
paid or credited to the Custody Cash Account, whether such failure or delay
by the Bank to pay, withhold or report tax or income is a result of (x) the
Customer's failure to comply with the terms of this section, or (y) the
Bank's own acts or omissions; provided, however, that the Customer shall
not be liable to the Bank for penalties or additions to tax as a result of
Bank's failure to pay or withhold tax or to report to Customer interest,
dividend or other income paid or credited to the Custody Cash Account
solely as a result of Bank's negligent acts or omissions.
12. FEES
The Customer agrees to pay the Bank quarterly in arrears such compensation
for the Bank's services pursuant to this Agreement as may mutually be
agreed upon in writing. The current Compensation Schedule is reflected in
Schedule A of this Agreement.
The Customer shall pay the Bank or reimburse the Bank from time to time for
all necessary and proper disbursements and expenses made or incurred by the
Bank in the performance of this agreement.
13. INDEMNIFICATION
(A) Customer agrees to indemnify and hold Bank and its directors,
officers, agents and employees (collectively the "Indemnitees")
harmless from and against any and all claims, liabilities, losses,
damages, fines, penalties, and expenses, including out-of-pocket and
incidental expenses and reasonable legal fees ("Losses") which may be
imposed on, incurred by, or asserted against, the Indemnitees or any
of them for following any Instructions or other directions upon which
Bank is authorized to rely pursuant to the terms of this Agreement.
(B) In addition to and not in limitation of paragraph (a) immediately
above, Customer also agrees to indemnify and hold the Indemnitees and
each of them harmless from
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and against any and all Losses that may be imposed on, incurred by, or
asserted against, the indemnitees or any of them in connection with or
arising out of Bank's performance under this Agreement, provided the
Indemnitees have not acted with negligence or engaged in willful
misconduct.
(C) (i) In the event that an Indemnitee wishes to assert a claim for
indemnification under paragraph (A) or (B) above, within a reasonable
time after receipt of notice or the commencement of an action or other
claim against the Indemnitee, the Indemnitee shall deliver written
notice to the Customer and provide a copy of the action or claim. The
Indemnitee shall cooperate with the Customer with respect to the
Customer's investigation of the claim. The Customer may assume the
defense of the action upon notice to the Indemnitee, with legal
counsel reasonably acceptable to the Indemnitee; provided, if the
Customer is a party to the action the Indemnitee may retain the
defense of such action if the Indemnitee is advised by counsel that
there are legal defenses available to the Indemnitee which are
different from or in addition to those available to the Customer.
(ii) If the customer assumes the defense of the action pursuant to
the foregoing paragraph (i), the following additional provisions shall
apply: (1) the Customer shall provide the Indemnitee with copies of
all documents received by it or by its counsel with respect to the
indemnified matter promptly upon receipt thereof and with copies of
all documents proposed to be delivered by it or by its counsel with
respect to the indemnified matter, and shall use its reasonable best
efforts to provide such documents sufficiently in advance of any
deadline for delivery of such documents to allow the Indemnitee to
review and comment thereon prior to such deadline and prior to actual
delivery; (2) the Customer shall consult with the Indemnitee in good
faith as to the conduct of the defense and shall give due regard to
any comments or suggestions made by the Indemnitee, but the Customer
shall not settle such action without the written consent of the
Indemnitee, which consent shall not be unreasonably withheld; and (3)
in the event the Indemnitee in good faith disagrees with the defense
of the action, the Indemnitee may assume such defense at its own
expense, but the Customer shall not otherwise be released from its
obligation to indemnify the Indemnitee with respect to such action.
(D) It is expressly understood and agreed that Losses claimable by the
Indemnitees against the Customer under the indemnities in paragraphs
(A) and (B) of this section 13 shall not include legal fees incurred
by the Indemnitees to defend themselves against a claim or action by
the Customer that the Indemnitees failed to properly perform under the
terms of this Agreement.
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14. SECURITY INTEREST
To the extent Bank has advanced funds on Customer's behalf in connection
with the settlement of purchases and sales of Securities for the Custody
Account, Bank shall have a security interest in the Securities which are
the subject of such purchases and sales until Customer shall have repaid
the amount of such advance to Bank, and Bank's security interest in such
Securities shall be released upon Customer's repayment of such advance to
Bank.
15. ASSIGNMENT
This Agreement may not be assigned by either party without the written
consent of the other party, which consent shall not be withheld
unreasonably.
16. AMENDMENT
This Agreement may be amended at any time upon mutual written agreement of
the parties. The amendment will state the date upon which it becomes
effective.
Notwithstanding the foregoing, the Compensation Schedule reflected in
Exhibit A to this Agreement may be amended by having both parties sign and
date a new Schedule, without executing a formal amendment. Each such
amended Schedule shall become a part of this Agreement as of a date stated
thereon.
17. TERMINATION
Either party may terminate this Agreement at any time upon sixty (60) days'
written notice to the other party. If Customer notifies Bank of
termination under this provision, and subsequently desires to postpone the
effective date of termination, customer may do so for up to another sixty
(60) days, as long as Customer, prior to the expiration of the original
60-day period, notifies Bank of its intention to postpone.
In the event Bank shall be dissolved or shall become incapable of acting,
or in the event that control of Bank or its offices shall be taken over by
any governmental authority, Customer, to the extent permitted by law, may
terminate this agreement at any time without regard to the 60-day notice
provision set forth in the immediately preceding paragraph.
The Customer's obligations to the Bank pursuant to the sections under the
headings "Settlements," "Fees," "Indemnification," "Taxes," and "Security
Interest" shall survive the termination of this Agreement. In like manner,
the Bank's obligations to the Customer pursuant to the paragraphs under the
headings "Access to Records," "Corporate Actions," and "Custodian
Responsibility" shall survive the termination of this Agreement.
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Except as provided in Section 14, upon termination of this Agreement or in
the event a successor to the Bank shall be selected or appointed the Bank
shall make delivery or payment of cash or Financial Assets held by the Bank
hereunder whether or not full payment shall have been made to the Bank of
all the Bank's fees, compensation, costs, and expenses, or whether the Bank
shall have been furnished with security and indemnity satisfactory to the
Bank against any liability, obligation, fees, compensation, cost or expense
in connection with this Agreement (to the extent the Bank is entitled
thereto under this Agreement.) Anything in this agreement to the contrary
notwithstanding, except as provided in Section 14 nothing herein shall be
construed to allow the Bank to recoup or set off any of the Bank's fees,
charges, or other claims against any Financial Assets held by the Bank as
custodian hereunder.
18. NOTICES
Notices with respect to termination, specification of Authorized Officers
and terms and conditions for Instructions required hereunder shall be in
writing, and shall be deemed to have been duly given if delivered
personally; delivered by courier service; or sent by mail (postage
prepaid), as the case may be, to and received at the following addresses
(or to such other address as either party hereto may from time to time
designate by notice duly given in accordance with this paragraph):
To the Customer at:
Lincoln National Managed Fund, Inc.
Attention: Securities Custody/Treasurer
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
To the Bank, to the attention of the individual designated by the Bank as
the safekeeping account administrator for the Customer's account, at:
The Chase Manhattan Bank
North American Insurance Securities Services
3 Chase Metro Tech Center, Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
19. GOVERNING LAW; HEADINGS
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its law as to conflict of
laws.
The headings of the paragraphs hereof are included for convenience of
reference only and do not form a part of this Agreement.
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20. PRIOR PROPOSALS; SUCCESSORS AND ASSIGNS
This Agreement (including any Riders relating to additional services in
respect of the Custody Account or the Custody Cash Account which the
Customer may request of the Bank) shall contain the complete agreement of
the parties hereto with respect to the Custody Account and the Custody Cash
Account (except as may be expressly provided to the contrary herein) and
supersedes and replaces any previously made proposals, representations,
warranties or agreements with respect thereto by either or both of the
parties hereto. This Agreement shall become effective upon execution hereof
by the Customer and acceptance by the Bank. It is binding on the parties,
their successors and assigns.
21. SEPARABILITY
Any provisions of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
22. RESERVATION OF RIGHT
The Bank shall have the right not to accept for deposit to the Custody
Account any Securities which are in a form or condition which the Bank and
the Customer mutually agree are not suitable for the services which the
Bank provides under this Agreement.
23. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original and together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed, in one or more counterparts, in its name and on its behalf by its duly
authorized representatives:
THE CHASE MANHATTAN BANK The Lincoln National Managed Fund, Inc.
By: By:
-------------------------------- ------------------------------
Typed Name: Typed Name:
------------------------ ----------------------
Title: Title:
----------------------------- ---------------------------
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