Exhibit (h)(11)
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CREDIT AGREEMENT
by and among
THE FUND PORTFOLIOS LISTED FROM TIME TO TIME
ON SCHEDULE I HERETO,
VARIOUS BANKS,
PNC BANK, NATIONAL ASSOCIATION
as Lead Arranger and Administrative Agent
and
THE BANK OF NEW YORK
as Co-Lead Arranger and Syndication Agent
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Dated as of October 29, 2004
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PNC BANK, NATIONAL ASSOCIATION
THE BANK OF NEW YORK
PRUDENTIAL ADVISED MUTUAL FUND PORTFOLIOS
October 29, 2004
INDEX OF CLOSING DOCUMENTS
Document Tab
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Credit Agreement, including Exhibits and Schedules 1
Officer's Certificate 2
Post-Closing Letter 3
Evidence of Termination of Existing Credit Facilities 4
Opinion of Xxxxxxx X. Xxxxxx, Esquire 5
Post-Closing Opinion of Xxxxxxx X. Xxxxx, Esquire 6
Table of Contents
Page
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SECTION 1. Amount and Terms of Credit.......................................1
1.01 The Commitments..................................................1
1.02 Minimum Amount of Each Borrowing.................................3
1.03 Notice of Borrowing..............................................3
1.04 Disbursement of Funds............................................3
1.05 Ledger...........................................................4
1.06 Conversions......................................................4
1.07 Pro Rata Borrowings..............................................5
1.08 Interest.........................................................5
1.09 Interest Periods.................................................6
1.10 Increased Costs; Illegality; Etc.................................6
1.11 Compensation.....................................................9
1.12 Replacement of Banks.............................................9
1.13 Addition of New Borrowers.......................................10
1.14 Removal of Borrowers............................................10
SECTION 2. Fees; Reductions of Commitment..................................10
2.01 Fees............................................................10
2.02 Voluntary Termination of Unutilized Commitments:
Termination of Commitments..................................11
SECTION 3. Prepayments; Payments; Taxes....................................11
3.01 Voluntary Prepayments...........................................11
3.02 Mandatory Repayments............................................11
3.03 Method and Place of Payment.....................................12
3.04 Net Payments....................................................12
SECTION 4. Conditions Precedent to the Effective Date......................14
4.01 Execution of Agreement..........................................14
4.02 Officers' Certificate...........................................14
4.03 Opinion of Counsel..............................................15
4.04 Proceedings; Etc................................................15
4.05 Adverse Change; Etc.............................................15
4.06 Litigation......................................................15
4.07 Fees, Etc.......................................................16
4.08 Existing Credit Facilities......................................16
SECTION 5. Conditions Precedent to All Loans...............................16
5.01 No Default; Representations and Warranties......................16
5.02 Notice of Borrowing.............................................16
SECTION 6. Representations, Warranties and Agreements......................17
6.01 Corporate or Trust Status.......................................17
6.02 Power and Authority.............................................17
6.03 No Violation....................................................17
6.04 Governmental Approvals..........................................18
6.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; etc.................................18
6.06 Litigation......................................................18
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6.07 True and Complete Disclosure....................................19
6.08 Use of Proceeds; Margin Regulations.............................19
6.09 ERISA...........................................................19
6.10 Compliance with Statutes, Etc...................................20
6.11 Investment Company..............................................20
6.12 Investment Adviser..............................................20
6.13 Affiliation with the Banks......................................21
6.14 Senior Status...................................................21
SECTION 7. Affirmative Covenants...........................................21
7.01 Information Covenants...........................................21
7.02 Books, Records and Inspections..................................23
7.03 Compliance with Statutes; Etc...................................23
7.04 Investment Company..............................................23
7.05 Compliance with Investment Practices............................23
7.06 Compliance with Regulation U....................................23
7.07 Use of Proceeds.................................................23
7.08 Anti-Terrorism Laws.............................................23
SECTION 8. Negative Covenants..............................................24
8.01 Liens...........................................................24
8.02 Consolidation, Merger, Sale or Purchase of Assets, Etc..........24
8.03 Indebtedness....................................................25
8.04 Restrictions on Issuance of Capital Stock.......................26
8.05 Modifications of Investment Practices, Articles of
Incorporation, By-Laws and Certain Other Agreements..........26
8.06 Business........................................................26
8.07 ERISA...........................................................26
8.08 Affiliated Person...............................................26
8.09 Asset Coverage Ratio............................................26
8.10 Interfund Lending...............................................26
8.11 Investment Adviser Lending......................................27
SECTION 9. Events of Default...............................................28
9.01 Payments .......................................................28
9.02 Representations; Etc............................................28
9.03 Covenants.......................................................28
9.04 Default Under Other Agreements..................................29
9.05 Bankruptcy; Etc.................................................29
9.06 Judgments.......................................................29
9.07 Investment Adviser..............................................30
9.08 Custody Agreement...............................................30
9.09 ERISA...........................................................30
SECTION 10. Definitions and Accounting Terms................................31
10.01 Defined Terms...................................................31
SECTION 11. The Administrative Agent........................................39
11.01 Appointment.....................................................39
11.02 Nature of Duties................................................40
11.03 Lack of Reliance on the Administrative Agent....................40
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11.04 Certain Rights of the Administrative Agent......................40
11.05 Reliance........................................................41
11.06 Indemnification.................................................41
11.07 The Administrative Agent in its Individual Capacity.............41
11.08 Resignation by the Administrative Agent.........................41
11.09 Syndication Agent; Lead Arranger; Co-Lead Arranger..............42
SECTION 12. Miscellaneous...................................................42
12.01 Payment of Expenses, Indemnification, Etc.......................42
12.02 Right of Setoff.................................................43
12.03 Notices.........................................................43
12.04 Benefit of Agreement............................................44
12.05 No Waiver; Remedies Cumulative..................................46
12.06 Payments Pro Rata...............................................46
12.07 Calculations; Computations......................................46
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.........................................47
12.09 Counterparts....................................................48
12.10 Effectiveness...................................................48
12.11 Table of Contents and Headings Descriptive......................48
12.12 Amendment or Waiver; Etc........................................48
12.13 Survival........................................................49
12.14 Domicile of Loans...............................................49
12.15 Limited Recourse................................................49
12.16 Confidentiality.................................................49
SCHEDULES
Schedule I Borrowers
Schedule II Commitments
Schedule III Bank Addresses
Schedule IV Custody Agreements
Schedule V Investment Management Agreement
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Additional Borrower Request
Exhibit C Form of Removal of Borrower Notice
Exhibit D Form of Officers' Certificate
Exhibit E Form of Opinion of the General Counsel of the Investment
Adviser, counsel to the Borrowers
Exhibit F Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT, dated as of October 29, 2004, among the separate mutual
fund portfolios listed from time to time on Schedule I hereto (each such
portfolio a "Borrower" and, collectively, the "Borrowers"), the Banks party
hereto from time to time, PNC Bank, National Association, as Lead Arranger and
Administrative Agent, and The Bank of New York, as Co-Lead Arranger and
Syndication Agent (all capitalized terms used herein and defined in Section 10
are used herein as therein defined).
WITNESSETH:
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Banks are willing to make available to the Borrowers the credit facilities
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments, (a) Subject to and upon the terms and conditions
set forth herein, each Bank severally agrees, at any time and from time to time
on and after the Effective Date and prior to the Expiry Date, upon the request
of a Borrower, to make loans (each a "Revolving Loan" and, collectively, the
"Revolving Loans") to such Borrower, which Loans (i) shall, at the option of
such Borrower, be Base Rate Loans, Fed Funds Loans or LIBOR Loans, provided that
except as otherwise specifically provided in Section 1.10(b), all Loans
comprising the same Borrowing shall at all times be of the same Type, (ii) may
be repaid and reborrowed in accordance with the provisions hereof, (iii) shall
not exceed for any Bank at any time outstanding, when added to such Bank's
Percentage of all then outstanding Swingline Loans, that aggregate principal
amount which equals the Commitment of such Bank at such time and (iv) shall not
exceed in the aggregate for any Borrower at any time that amount which, when
added to all Swingline Loans, Interfund Loans and Investment Adviser Loans made
to such Borrower which remain outstanding, equals such Borrower's Borrowing Base
at such time.
(b) Subject to and upon the terms and conditions set forth
herein, the Swingline Bank may, in its sole discretion, agree to make, at any
time and from time to time on and after the Effective Date and prior to the
Swingline Expiry Date, a revolving loan or revolving loans (each a "Swingline
Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline
Loans (i) shall, at the option of the respective Borrower, be made and
maintained as Base Rate Loans or Fed Funds Loans, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall not exceed in
aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding at such time,
an amount equal to the Total Commitment at such time (after giving effect to any
reductions to the Total Commitment on such date), (iv) shall not exceed for any
Borrower in aggregate principal amount at any time outstanding, when combined
with the aggregate principal amount of all Revolving Loans then outstanding to
such Borrower at such time, such Borrower's Borrowing Base at such time and (v)
shall not exceed in aggregate principal amount at any time outstanding the
Maximum Swingline Amount. Notwithstanding anything to the contrary contained in
this Section 1.01(b), the Swingline Bank shall not make any Swingline Loan to
any Borrower after it has received written notice from such Borrower or the
Required Banks stating that a Default or an Event of Default exists and is
continuing with
respect to such Borrower until such time as the Swingline Bank shall have
received written notice (i) of rescission of all such notices from the party or
parties originally delivering such notice, (ii) of the waiver of such Default or
Event of Default by the Required Banks or (iii) that the Administrative Agent in
good faith believes that such Default or Event of Default no longer exists.
(c) On any Business Day and in any case within seven Business
Days of the making of a Swingline Loan (provided that any failure to give such
notice within such seven Business Day period shall not effect the obligation of
the respective Borrower or any other Bank to accept such notice and fund the
Revolving Loan or Revolving Loans referred to below), the Swingline Bank may, in
its sole discretion, give notice to the Banks that such Swingline Loan shall be
funded with one or more Borrowings of Revolving Loans in accordance with Section
1.07 (provided that such notice shall be deemed to have been automatically given
upon the occurrence of a Default or an Event of Default under Section 9.05 or
upon the exercise of any of the remedies provided in the last paragraph of
Section 9), in which case one or more Borrowings of Revolving Loans constituting
Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on
the immediately succeeding Business Day by all such Banks with a Commitment
(without giving effect to any reductions thereto pursuant to the last paragraph
of Section 9) pro rata based on each such Bank's respective amount of the Total
Unutilized Commitment (determined before giving effect to any termination of the
Commitments pursuant to the last paragraph of Section 9) and the proceeds
thereof shall be remitted to the Swingline Bank and applied by the Swingline
Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each Bank
that is required to fund Swingline Loans in accordance with this Section 1.01
and Section 1.07 hereby irrevocably agrees to make Revolving Loans upon one
Business Day's notice pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified in
writing by the Swingline Bank notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) any failure to satisfy any conditions specified in
Section 5, (iii) any Default or Event of Default existing on such date, (iv) the
date of such Mandatory Borrowing and (v) the amount of the Total Commitment at
such time. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to any Borrower), then each such Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received by the Swingline Bank from the
respective Borrower on or after such date and prior to such purchase) from the
Swingline Bank such participations in the outstanding Swingline Loans as shall
be necessary to cause such Banks to share in such Swingline Loans ratably based
upon their respective percentages (determined before giving effect to any
termination of the Commitments pursuant to the last paragraph of Section 9),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Bank until the date as of which the respective
participation is purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Bank shall be required to pay the Swingline Blank
interest on the principal amount of the participation purchased for each day
from and including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the overnight Fed Funds Rate for the first three
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days and at the rate otherwise applicable to Revolving Loans maintained as Base
Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of (i) Revolving Loans shall not be less than $1,000,000 and,
if greater, shall be in an integral multiple of $100,000 and (ii) Swingline
Loans shall not be less than $250,000 and, if greater, shall be in an integral
multiple of $100,000. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than three Borrowings of LIBOR Loans for
the account of any one Borrower.
1.03 Notice of Borrowing. Whenever a Borrower desires to make a
Borrowing hereunder (excluding Mandatory Borrowings), it shall give the
Administrative Agent prior notice of each desired Base Rate Loan or Fed Funds
Loan (which must be given prior to 12:00 Noon (Philadelphia time) (or 3:00 P.M.
Philadelphia time in the case of Swingline Loans) if such notice is given on the
day such Borrowing is desired) and at least three Business Days' prior notice
of each desired LIBOR Loan, provided that any such notice shall be deemed to
have been given on a certain day only if given before 12:00 Noon (Philadelphia
time) on such day. Each such notice (each a "Notice of Borrowing") shall be
given by the respective Borrower, in the form of Exhibit A and executed by an
authorized signatory for such Borrower, appropriately completed to specify the
principal amount of the Revolving Loan (or Swingline Loan, in the case of Loans
designated as such) to be made pursuant to such Borrowing, the date of such
Borrowing (which shall be a Business Day), the Borrower on behalf of which such
Revolving Loan is being requested, the Asset Coverage Ratio, together with the
calculations necessary to compute the Asset Coverage Ratio, of such Borrower as
of the close of business on the latest Business Day preceding the date of such
Notice of Borrowing after giving pro forma effect to such Borrowing, whether the
Loan being made pursuant to such Borrowing is to be initially maintained as a
Base Rate Loan, Fed Funds Loan or, if such Loan is a Revolving Loan, LIBOR Loan
and, if a Revolving Loan to be maintained as a LIBOR Loan, the initial Interest
Period to be applicable thereto, provided that a Borrower may provide telephonic
notice to the Administrative Agent of its intent to make a Borrowing, which
telephonic notice shall be deemed effective if given within the time required
above in this Section 1.03 and promptly followed by a Notice of Borrowing, which
Notice of Borrowing shall be received by the Administrative Agent on the day of
such telephonic notice and prior to any disbursement of funds in connection with
such Borrowing. Any telephonic notice given pursuant to the immediately
preceding sentence shall be deemed to be a representation and warranty by the
Borrower giving such notice that all of the facts required to be set forth in a
Notice of Borrowing are true as of the time of the giving of such notice. The
Administrative Agent shall promptly give each Bank notice of such proposed
Borrowing, of such Bank's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
1.04 Disbursement of Funds. Except as otherwise specifically provided
in the immediately succeeding sentence, no later than 2:00 P.M. (Philadelphia
time) on the date specified in each Notice of Borrowing, each Bank will make
available its pro rata portion of each such Borrowing requested to be made on
such date, in Dollars and in immediately available funds to the Administrative
Agent at the address set forth in Section 12.03, and the Administrative Agent
will make the aggregate of the amounts so made available by such Banks available
to the appropriate Borrower at the address set forth in Section 12.03 for the
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Administrative Agent or, if specified in the Notice of Borrowing, such
Borrower's account with its Custodian in accordance with the standard
instructions provided in the Notice of Borrowing. Unless the Administrative
Agent shall have been notified by any Bank prior to the date of Borrowing that
such Bank does not intend to make available to the Administrative Agent such
Bank's portion of any Borrowing to be made on such date, the Administrative
Agent may assume that such Bank has made such amount available to the
Administrative Agent on such date of Borrowing and the Administrative Agent may,
in reliance upon such assumption, make available to the respective Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
respective Borrower or Borrowers, and such Borrower or Borrowers shall
immediately pay (from the assets of such Borrower or Borrowers) such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover on demand from such Bank or the respective Borrower,
as the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to such Borrower or Borrowers until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from the respective Borrower, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Bank from its obligation to make
Loans hereunder or to prejudice any rights which any Borrower may have against
any Bank as a result of any failure by such Bank to make Loans hereunder.
1.05 Ledger. Each Bank will note on its internal records the amount of
each Revolving Loan made by it (and the Swingline Bank shall note the amount of
each Swingline Loan made by it), the Borrower to whom such Loan was made, and
each payment in respect thereof, and will, prior to any transfer of any of its
interest therein, note the outstanding principal amount of Loans (broken down by
Borrower) to be so transferred. Failure to make any such notation (or any error
in such notation) shall not affect the Obligations of the respective Borrowers
in respect of such Loans.
1.06 Conversions. The Borrowers shall have the option to convert, on
any Business Day occurring on or after the Effective Date, all or a portion
equal to at least $250,000 (or at least $500,000 with respect to LIBOR Loans
and, in any event, if greater, in an integral multiple of $100,000) of the
outstanding principal amount of a Borrowing of one or more Types of Revolving
Loans made to a particular Borrower into a Borrowing of another Type of
Revolving Loan to such Borrower, provided that (i) except as otherwise provided
in Section 1.10(6), LIBOR Loans may be converted into Base Rate Loans or Fed
Funds Loans only on the last day of an Interest Period applicable to the Loans
being converted and no such partial conversion of LIBOR Loans shall reduce the
outstanding principal amount of such LIBOR Loans made pursuant to a single
Borrowing to less than $500,000, (ii) Base Rate Loans may only be converted into
LIBOR Loans if no Default or Event of Default is in existence on the date of the
conversion and (iii) no conversion pursuant to this Section 1.06 shall result in
a greater number of Borrowings of LIBOR Loans than is permitted under Section
1.02. Each such conversion shall be effected by the respective Borrower giving
the Administrative Agent prior to
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12:00 Noon (New York time) at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Revolving Loans to be so converted, the
Borrowing(s) pursuant to which such Revolving Loans were made and, if to be
converted into LIBOR Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any such
proposed conversion. Upon any such conversion the proceeds thereof will be
deemed to be applied directly on the day of such conversion to prepay the
outstanding principal amount of the Revolving Loans being converted.
1.07 Pro Rata Borrowings. (a) Except as otherwise provided in this
Section 1.07, all Borrowings of Revolving Loans under this Agreement shall be
incurred from the Banks pro rata on the basis of their respective Commitments.
(b) To the extent that multiple Notices of Borrowing are received
on the same day by the Administrative Agent, the Administrative Agent shall
calculate each Bank's pro rata share of the Revolving Loan to be made thereunder
separately for each Notice of Borrowing in the chronological order in which such
Notice of Borrowing is received by the Administrative Agent.
(c) It is understood that no Bank shall be responsible for any
default by any other Bank of its obligation to make respective Loans hereunder
and that each Bank shall be obligated to make the respective Revolving Loans
provided to be made by it hereunder regardless of the failure of any other Bank
to make its Revolving Loans hereunder.
1.08 Interest. (a) Each Borrower to which a Base Rate Loan is made
agrees to pay interest in respect of the unpaid principal amount of such Base
Rate Loans made to such Borrower from the date the proceeds thereof are made
available to such Borrower until the maturity thereof (whether by acceleration
or otherwise) at a rate per annum which shall be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) Each Borrower to which a Fed Funds Loan is made agrees to pay
interest in respect of the unpaid principal amount of such Fed Funds Loans made
to such Borrower from the date the proceeds thereof are made available to such
Borrower until the maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Applicable Margin plus the Federal Funds Rate in effect
from time to time.
(c) Each Borrower to which a LIBOR Loan is made agrees to pay
interest in respect of the unpaid principal amount of such LIBOR Loans made to
such Borrower from the date the proceeds thereof are made available to such
Borrower until the maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Applicable Margin plus the LIBOR for such Interest
Period.
(d) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
greater of (i) 2% per annum in excess of the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans from time to time
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and (ii) the rate which is 2% in excess of the rate then borne by such Loan, in
each case with such interest to be payable on demand.
(e) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan and Fed Funds Loan, upon repayment or
prepayment (on the amount repaid or prepaid), (ii) in respect of each LIBOR
Loan, on the last day of each Interest Period applicable thereto or on any
repayment or prepayment (on the amount repaid or prepaid), and (iii) in respect
of each Loan, at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(f) Upon each Interest Determination Date, the Administrative
Agent shall determine LIBOR for each Interest Period applicable to LIBOR Loans
and shall promptly notify the respective Borrower and the Banks thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any LIBOR
Loan (in the case of the initial Interest Period applicable thereto) or on the
third Business Day prior to the expiration of an Interest Period applicable to
any such LIBOR Loan (in the case of any subsequent Interest Period), the
Borrowers shall have the right to elect, by giving the Administrative Agent
notice thereof, the interest period (each an "Interest Period") applicable to
such LIBOR Loan, which Interest Period shall be a one month period, provided
that; (v) all LIBOR Loans comprising a Borrowing shall at all times have the
same Interest Period; (w) the initial Interest Period for any LIBOR Loan shall
commence on the date of Borrowing of such Revolving Loan (including the date of
any conversion thereof into a Revolving Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Revolving Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires; (x) if any Interest Period relating to a LIBOR Loan begins on a
day for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month; (y) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any Interest Period for a
LIBOR Loan would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day; and (z) no
Interest Period shall extend beyond the Expiry Date. If, upon the expiration of
any Interest Period applicable to a Borrowing of LIBOR Loans, the respective
Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such LIBOR Loans as provided in this Section 1.09,
such Borrower shall be deemed to have elected to convert such LIBOR Loans into
Base Rate Loans effective as of the expiration date of such current Interest
Period.
1.10 Increased Costs; Illegality; Etc. (a) In the event that any Bank
shall have reasonably determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
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(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the London
interbank Eurodollar market or the domestic interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of LIBOR; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with respect
to any LIBOR Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the
Loans or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Bank, pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of LIBOR and/or (y)
other circumstances since the date of this Agreement affecting such Bank,
the London interbank Eurodollar market or the domestic interbank Eurodollar
market or the position of such Bank in either such market; or
(iii) at any time, that the making or continuance of any
LIBOR Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good faith
with any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the London interbank
Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the affected Borrower or Borrowers and, except in the case of clause
(i) above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks) not
later than 11:00 A.M. (Philadelphia time) on the date such Borrowing was to
occur. Thereafter (x) in the case of clause (i) above, LIBOR Loans, as the case
may be, shall no longer be available until such time as the Administrative Agent
notifies the Borrowers and the Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of Borrowing
or Notice of Conversion given by any of the Borrowers with respect to any
affected LIBOR Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded, (y) in the case of clause (ii) above, the
respective Borrowers shall pay to such Bank, within five Business Days of its
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank shall reasonably determine) as shall be required to compensate such Bank
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the affected
Borrowers by such Bank shall, absent manifest
7
error, be final and conclusive and binding on all the parties hereto) and (z) in
the case of clause (iii) above, the respective Borrowers shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any LIBOR Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the respective Borrower
may (and in the case of a LIBOR Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected LIBOR Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date (if practicable) that such Borrower was notified by the affected Bank
or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii), or if such
notice is given one Business Day (or such shorter period as may be acceptable to
the Administrative Agent) prior to the date scheduled for such Borrowing, change
the Type of Loan or (y) if the affected LIBOR Loan is then outstanding, upon at
least three Business Days' written notice to the Administrative Agent, require
the affected Bank to convert such LIBOR Loan into a Fed Funds Loan or a Base
Rate Loan, provided that, if more than one Bank is affected at any time, all
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
reasonably determines that the introduction of or any change since the date of
this Agreement in any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law)
concerning capital adequacy, or any change since the date of this Agreement in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's portion of the Total
Commitment or its obligations hereunder, then the Borrowers shall pay to such
Bank within three Business Days of its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such other corporation
for the increased cost to such Bank or such other corporation or the reduction
in the rate of return to such Bank or such other corporation as a result of such
increase of capital; provided that the Borrowers shall be permitted, subject to
Section 1.11, to mitigate such costs to the extent practicable by either
canceling any outstanding Notice of Borrowing or changing the Type of Loan
specified in any outstanding Notice of Borrowing as prescribed above in clause
(b) of this Section 1.10. In determining such additional amounts, each Bank will
act reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon determining
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the affected Borrowers, which notice
shall show the basis for calculation of such additional amounts, provided,
however, that failure to give any such notice shall not release or diminish any
obligation of the Borrowers to pay additional amounts pursuant to this Section
1.10(c) upon receipt of such notice.
(d) Each Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section l.lO(a)(ii) or (iii) or 1.10(c) with
respect to such bank, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to avoid or
mitigate any additional amounts payable to the greatest extent practicable
8
(including transferring the Loans affected by such event to another lending
office, unless in the opinion of such Bank, such efforts would result in the
Bank (or its lending office) suffering an economic, legal or regulatory
disadvantage. Nothing in this clause (d) shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in this Section
1.10.
1.11 Compensation. Each Borrower agrees that it shall compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its LIBOR Loans, but not for loss of profit) which
such Bank may sustain in respect of Loans made to such Borrower or a Notice of
Borrowing or Notice of Conversion delivered by such Borrower: (i) if for any
reason (other than a default by such Bank or the Administrative Agent) a
Borrowing by such Borrower of, or conversion from or into, LIBOR Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by such Borrower or deemed withdrawn
pursuant to Section 1.10(a) or otherwise); (ii) if any repayment (including any
repayment made pursuant to Section 3.02 or a result of an acceleration of the
Revolving Loans of such Borrower pursuant to Section 9) or conversion of any of
such Borrower's LIBOR Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of a LIBOR Loan of
such Borrower is not made on any date specified in a notice of prepayment given
by such Borrower; or (iv) as a consequence of (a) any other default by such
Borrower to repay any Loan when required by the terms of this Agreement or (b)
any election made by such Borrower pursuant to Section 1.10(b).
1.12 Replacement of Banks. (x) If any Bank defaults in its obligations
to make Loans (a "Defaulting Bank") or (y) upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or
Section 3.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the other
Banks, the Borrower shall have the right, if no Default or Event of Default will
exist immediately after giving effect to the respective replacement, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferees,
none of which shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 1.12, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 12.04(b) pursuant to
which the Replacement Bank shall acquire all of the Commitments and outstanding
Loans of the Replaced Bank and, in connection therewith, shall pay to the
Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans
together with all then unpaid interest with respect thereof at such time and (B)
an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Bank pursuant to Section 2.01, and (ii) all obligations of the
Borrowers owing to the Replaced Bank (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements and the payment of amounts referred to in
clauses (i) and (ii) above, the Replacement Bank shall become a Bank hereunder
and the Replaced Bank shall cease to
9
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement which shall survive as to such Replaced Bank.
1.13 Addition of New Borrowers. The Investment Adviser may from time
to time request in writing in the form of Exhibit B (each such request, an
"Additional Borrower Request") that a separate affiliated mutual fund portfolio
be included hereunder as an additional Borrower subject to the terms and
conditions of this Agreement (any such separate mutual fund portfolio, an
"Additional Borrower"). Such Additional Borrower Request shall be delivered to
each of the Banks and the Administrative Agent and shall include (a) a
certification by an authorized officer of the Borrowers that (i) the
representations, warranties and agreements of the Borrowers contained in Section
6 are true and correct as if made on the date of such certification and on the
date such Additional Borrower becomes a Borrower hereunder and (ii) no Default
or Event of Default has occurred and is continuing or will occur as a result of
such Additional Borrower becoming a Borrower hereunder and (b) true and correct
copies of the most recent audited and unaudited financial statements of such
Additional Borrower. Upon receipt of an Additional Borrower Request each Bank
shall in its sole discretion determine whether it shall consent to such request,
any such consent to be in writing and delivered to the Administrative Agent.
Failure by any Bank to deliver such a consent within 30 days after receipt of
such request shall be deemed a refusal to consent on the part of such Bank. To
the extent the Administrative Agent receives written consents from all Banks
with respect to a particular Additional Borrower Request, the Administrative
Agent shall notify the Borrowers thereof, and such Additional Borrower shall
become a Borrower hereunder (at which time Schedule I hereto shall be deemed to
be amended to include such new Borrower) upon delivery to the Administrative
Agent of (x) certified copies of documents relating to such Additional Borrower
of the type referred to in Section 4.05 and (y) an executed counterpart hereof
and/or an assumption agreement in form satisfactory to the Administrative Agent.
1.14 Removal of Borrowers. Any Borrower may, from time to time upon
written notice to the Administrative Agent in the form of Exhibit C (each such
notice, a "Removal of Borrower Notice") elect to remove itself as a Borrower
hereunder, provided that at such time such removed Borrower has no Loans or
other Obligations outstanding under this Agreement. Upon the effectiveness of
such removal, such removed Borrower shall cease to be a Borrower for all
purposes of this Agreement, except that all indemnification provisions of this
Agreement shall survive as to such removed Borrower.
SECTION 2. Fees; Reductions of Commitment.
2.01 Fees. (a) Each Borrower agrees to pay to the Administrative
Agent, for pro rata distribution to each Bank, its pro rata share (as calculated
in accordance with the last sentence of this Section 2.01(a)) of a commitment
fee (the "Commitment Fee") for the period from the Effective Date to and
including the Expiry Date (or such earlier date as the Total Commitment shall
have been terminated), computed at a rate for each day equal to 0.075% per annum
on the daily average Total Unutilized Commitment. Accrued Commitment Fees shall
be due and payable quarterly in arrears on the fifteenth day of the month
following such calendar quarter end (unless such day is not a Business Day, in
which case such accrued Commitment Fees shall be payable on the latest preceding
Business Day) and on the Expiry Date, or such earlier date upon which the Total
Commitment is terminated, with the allocation of such
10
obligation among the Borrowers to be pro rata according to the relevant asset
size of the respective Borrowers (or, upon prior written notice to the
Administrative Agent, based on such other method acceptable to the
Administrative Agent as the Board of Trustees/Directors of the Board shall
determine in compliance with the Investment Company Act).
(b) Each Borrower agrees to pay to the Administrative Agent, for
the Administrative Agent's own account, its pro rata share according to the
relevant asset size of the respective Borrowers (or, upon prior written notice
to the Administrative Agent, such other method of allocation acceptable to the
Administrative Agent as the Investment Adviser shall determine in compliance
with the Investment Company Act) of such other fees as have been agreed to in
writing by the Borrowers and the Administrative Agent.
2.02 Voluntary Termination of Unutilized Commitments: Termination of
Commitments. Upon at least three Business Days' prior notice to the
Administrative Agent (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrowers shall have the right, at any time
or from time to time, without premium or penalty, to terminate the Total
Unutilized Commitment, in whole or in part, in integral multiples of $10,000,000
in the case of partial reductions to the Total Unutilized Commitment, provided
that each such reduction shall apply proportionately to permanently reduce the
Commitment of each Bank.
SECTION 3. Prepayments; Payments; Taxes.
3.01 Voluntary Prepayments. The respective Borrowers shall have the
right to prepay any Loan or Loans, without premium or penalty, in whole or in
part at any time and from time to time on the following terms and conditions:
(i) the respective Borrower shall give the Administrative Agent prior to 11:00
A.M. (Philadelphia time) (x) on the same Business Day prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Swingline Loans, (y) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans or Fed Funds Loans that are Revolving Loans, and (z) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay LIBOR Loans, the amount of such prepayment and
the Types of Loans to be prepaid, the Borrower or Borrowers to which such Loans
were made and, in the case of LIBOR Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice the Administrative Agent shall promptly
transmit to each of the Banks; (ii) each prepayment shall be in an aggregate
principal amount of at least $500,000, provided that if any partial prepayment
of LIBOR Loans made pursuant to any Borrowing shall reduce the outstanding LIBOR
Loans made pursuant to such Borrowing to an amount less than $ 1,000,000, then
such Borrowing may not be continued as a Borrowing of LIBOR Loans and any
election of an Interest Period with respect thereto shall have no force or
effect; (iii) prepayments of LIBOR Loans made pursuant to this Section 3.01 may
only be made on the last day of an Interest Period applicable thereto; and (iv)
each prepayment in respect of Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans.
3.02 Mandatory Repayments. (a) On any day on which the aggregate
outstanding principal amount of Loans exceeds the Total Commitment as then in
effect, the respective Borrowers shall prepay principal of Loans made to such
Borrowers in an aggregate
11
amount equal to such excess, provided that, in the event that such repayment is
required as a result of a partial reduction in the Total Commitment, (x) the
allocation of such required prepayment of Loans of the respective Borrowers
shall be determined by the Borrowers or (y) in the absence of a determination by
the Borrowers, the Administrative Agent shall allocate such mandatory repayments
to outstanding Loans in its discretion, with an eye toward, but no obligation
to, minimize breakage costs owing pursuant to Section 1.11.
(b) On any day on which the aggregate outstanding principal
amount of Loans, Interfund Loans and Investment Adviser Loans made to any
Borrower exceeds the Borrowing Base of such Borrower as then in effect, such
Borrower shall prepay principal of outstanding Loans equal to such excess.
(c) On any day upon which any Borrower has had any Loans in any
principal amount outstanding for more than 45 consecutive days, such Borrower
shall repay on such day all then outstanding Loans made to such Borrower,
together with accrued interest thereon.
(d) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, each Borrower promises to repay all then outstanding
Revolving Loans in full on the Expiry Date, and each Borrower promises to repay
all then outstanding Swingline Loans in full on the Swingline Expiry Date.
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made (or a federal
reserve wire number delivered) to the Administrative Agent for the account of
the Bank or Banks entitled thereto not later than 12:00 Noon (Philadelphia time)
on the date when due and shall be made in Dollars in immediately available funds
at the address set forth in Section 12.03 for the Administrative Agent. Whenever
any payment to be made hereunder shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
3.04 Net Payments. (a) All payments made by the Borrowers hereunder
will be made without setoff, counterclaim or other defense. Except as provided
in Section 3.04(b), all such payments will be made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding,
except as provided in the two succeeding sentences, taxes imposed on or measured
by the net income or profits of a Bank pursuant to the laws of the jurisdiction
in which it is organized or in which the principal office or applicable lending
office of such Bank is located or any subdivision thereof or therein), and any
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, each applicable Borrower agrees to pay the full amount of such Taxes
levied in respect of the payments of such Borrower, and such additional amounts
as may be necessary so that every payment of all amounts due from such Borrower
under this Agreement, after withholding or deduction for or on account of any
Taxes, will not be
12
less than the amount provided for herein provided, however, that no such
Borrower shall be required to increase any such amounts payable to any Bank (or
assignee of such Bank) that is not organized under the laws of the United States
if such Bank fails to comply with subsection (b) of this Section 3.04. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, then
the applicable Borrower agrees to reimburse each Bank, upon the written request
of such Bank, for taxes imposed on or measured by the net income or profits of
such Bank pursuant to the laws of the jurisdiction in which the principal office
or applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank is located and for
any withholding or income or similar taxes imposed by the United States of
America as such Bank shall determine are payable by, or withheld from, such Bank
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Borrowers will furnish to the Administrative
Agent, within 45 days after the date the payment of any Taxes are due pursuant
to applicable law, certified copies of tax receipts evidencing such payment by
the Borrowers. The Borrowers agree to indemnify and hold harmless each Bank,
and reimburse each Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees (i) to provide to the Borrowers and the Administrative Agent, on
or prior to the Effective Date, two original signed copies of Internal Revenue
Service Form 4224 or Form 1001, or successor applicable form (including, if
applicable, Form W-8ECI, W-8BEN or W-8IMY), as the case may be, certifying to
such Bank's entitlement as of such date to an exemption from United States
withholding tax with respect to payments to be made under this Agreement and
(ii) (x) with respect to any such Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.12 or 12.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), upon the date of such assignment or transfer to such
Bank, and (y) with respect to any such Bank, from time to time upon the
reasonable written request of the Borrowers or the Administrative Agent after
the Effective Date, such Bank will provide to the Borrowers and the
Administrative Agent two original signed copies of Internal Revenue Service Form
4224 or Form 1001 and Form W-8 or W-9, or successor applicable forms (including,
if applicable, Form W-8ECI, W-8BEN or W-8IMY) certifying to such Bank's
entitlement as of such date to an exemption from, or reduction in, United States
withholding tax with respect to payments to be made under this Agreement or it
shall promptly notify the Borrowers and the Administrative Agent of its
inability as a result of a change in law or treaty to deliver any such form or
certificate, in which case such Bank shall not be required to deliver any such
form or certificate pursuant to this clause (b). Notwithstanding anything to the
contrary contained in Section 3.04(a), but subject to the immediately succeeding
sentence, the Borrowers shall be entitled, to the extent they are required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder (without any obligation
to pay the respective Bank additional amounts with respect thereto) for the
account of any Bank which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes and
which has not provided to such Borrower such forms required to be provided to
the Borrowers pursuant to the first sentence of this Section
13
3.04(b). Notwithstanding anything to the contrary contained in the preceding
sentence and except as set forth in Section 12.04(b), each Borrower agrees to
indemnify each Bank in the manner set forth in Section 3.04(a) in respect of any
amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes that are effective after the Effective Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar Taxes provided, however, that the Borrowers
shall not be obligated to indemnify a Bank for any amount so withheld or
deducted as a result of a failure of such Bank to comply with any certification,
indemnification or other reporting requirements of this Section 3.04 if
compliance with such requirements is a precondition to exemption from, or
reduction in, United States withholding tax with respect to payments made under
this Agreement, including without limitation, the delivery by such Bank of the
forms specified in this Section 3.04(b); provided further, however, that the
Borrowers' obligation to pay such additional amounts (other than amounts
incurred as a result of such delay) shall be reinstated upon receipt of such
forms specified in this Section 3.04(b) or evidence that action with respect to
obtaining such exemption or reduction has been taken.
(c) If the Borrowers are compelled to make the additional
payments required by subsections (a) and (b) of this Section 3.04, the Borrowers
are entitled to remove the Bank with respect to which such payment is made if
such payment is in excess of additional payments charged by other Banks,
provided that no Bank shall be removed unless and until all obligations owing to
such Bank hereunder have been paid in full.
(d) Any Bank claiming any additional amounts payable pursuant to
this Section 3.04 shall use its best efforts (consistent with its internal
policy and legal and regulatory restrictions) to take any actions permissible if
the taking of such action would avoid the need for, or reduce the amount of, any
such additional amounts which may thereafter accrue and would not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such Bank
including changing the jurisdiction of its lending office. If such additional
amounts cannot be eliminated by such actions, the Borrowers shall have the right
to replace the affected Bank hereunder with a Bank not so affected which is
reasonably acceptable to the Administrative Agent and a majority of the
remaining Banks upon payment to such affected Bank of outstanding principal,
accrued interest and fees and all other amounts due pursuant to this Agreement,
including any amounts payable hereunder. No replacement of a Bank shall be made
pursuant hereto if, after giving affect thereto, any amount shall be owing to
such replaced Bank.
SECTION 4. Conditions Precedent to the Effective Date. The obligation of
each Bank to make Loans hereunder and the occurrence of the Effective Date are
subject to the satisfaction of each of the following conditions:
4.01 Execution of Agreement. On or prior to the Effective Date, this
Agreement shall have been executed and delivered as provided in Section 12.10.
4.02 Officers' Certificate. On the Effective Date, the Administrative
Agent shall have received a certificate dated the Effective Date signed on
behalf of the Borrowers by any authorized officer of the Borrowers and attested
to by any other authorized officer of the Borrowers, in the form of Exhibit D
with appropriate insertions, together with copies of the
14
Articles of Incorporation or Declaration of Trust and By-Laws of the Borrowers,
the resolutions of the Borrowers referred to in such certificate and the
Prospectuses, Statements of Additional Information, Investment Management
Agreement and Custody Agreements of each of the Borrowers referred to in such
certificate, and the foregoing shall be in form reasonably acceptable to the
Administrative Agent.
4.03 Opinion of Counsel. On the Effective Date, the Administrative
Agent shall have received from the Chief Legal Officer of the Investment
Adviser, an opinion addressed to the Administrative Agent and each of the Banks
and dated the Effective Date covering the matters set forth in Exhibit E and
such other matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request.
4.04 Proceedings; Etc. On the Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent and
the Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
4.05 Adverse Change; Etc. (a) On the Effective Date, nothing shall
have occurred (and the Banks shall not have become aware of any facts or
conditions not previously known) which either the Administrative Agent or the
Required Banks shall determine has, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Administrative Agent or
the Banks, or on the ability of any Borrower to perform its obligations to the
Administrative Agent and the Banks under any Credit Document or which has, or
could reasonably be expected to have, a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of any Borrower or the Borrowers taken as a whole.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and third party approvals, if any, in connection with the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the consummation of
the transactions contemplated by the Credit Documents or the making of any
Loans.
4.06 Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or, to the knowledge of such
Borrower, threatened with respect to this Agreement or any documentation
executed in connection herewith or the transactions
15
contemplated hereby, or which the Administrative Agent or the Required Banks
shall determine could reasonably be expected to have a material adverse effect
on the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of any Borrower or the Borrowers taken as a whole.
4.07 Fees, Etc. On the Effective Date, the Borrowers shall have paid
to the Administrative Agent and the Banks all costs, fees and expenses
(including, without limitation, outside legal fees and expenses) payable to the
Administrative Agent and the Banks to the extent then due.
4.08 Existing Credit Facilities. (a) On the Effective Date, the
commitments under the Existing Credit Facilities shall have been terminated, all
loans thereunder shall have been repaid in full, together with all accrued and
unpaid interest thereon, all accrued and unpaid fees thereon shall have been
paid in full, all letters of credit (if any) issued thereunder shall have been
terminated and all other amounts then owing pursuant to the Existing Credit
Facilities shall have been repaid in full, and the Administrative Agent shall
have received evidence in form, scope and substance reasonably satisfactory to
them that the matters set forth in this Section 4.08(a) have been satisfied at
such time.
(b) On the Effective Date, all security interests and Liens
created under the Existing Credit Facilities (if any) with respect to the
capital stock of, and/or assets owned by, the Borrowers shall have been
terminated and released, and the Administrative Agent shall have received all
such releases as they may have requested, which releases shall be in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 5. Conditions Precedent to All Loans. No Loan shall be made to any
Borrower hereunder unless the following conditions are satisfied:
5.01 No Default; Representations and Warranties. At the time of each
such Loan and also after giving effect thereto (i) there shall exist no Default
or Event of Default with respect to the Borrower receiving such Loan, (ii) the
respective Borrower shall be in full compliance with the Investment Company Act
(including, without limitation, Section 18 thereof), except such noncompliance
as could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower and (iii) all
representations and warranties by or with respect to such Borrower contained
herein shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on the date of the
making of such Loan (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
5.02 Notice of Borrowing. Prior to the making of each Loan (other than
a Mandatory Borrowing), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03.
The acceptance of the proceeds of each Loan shall constitute a representation
and warranty by the respective Borrower receiving such proceeds to the Banks
that all the conditions specified in
16
Section 4 and in Sections 5.01 and 5.02 and applicable to such Loan are
satisfied as of that time. All of the certificates, legal opinions and other
documents and papers referred to in Section 4 and in Section 5, unless otherwise
specified, shall be delivered to the Administrative Agent at the address set
forth in Section 12.03 and shall be in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order to induce
the Banks to enter into this Agreement and to make the Loans, each of the
Borrowers makes the following representations, warranties and agreements as to
itself, all of which shall survive the execution and delivery of this Agreement
and the making of the Loans, with the incurrence of each Loan on or after the
Effective Date being deemed to constitute a representation and warranty that the
matters specified in this Section 6 are true and correct in all material
respects on and as of the Effective Date and on the date of each such Loan (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.01 Corporate or Trust Status. Such Borrower (i) is a corporation or
trust or a series of a corporation or trust which is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
establishment or incorporation, (ii) has the corporate or trust power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
the ownership, leasing or operation of its property or the conduct of its
business requires such qualifications except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower or the
corporation or trust of which such Borrower is a series taken as a whole.
6.02 Power and Authority. Such Borrower has the power and authority to
execute, deliver and perform the terms and provisions of each of the Credit
Documents and has taken all necessary action (or such action has been taken on
its behalf) to authorize the execution, delivery and performance by it of each
of the Credit Documents. Such Borrower (or the corporation or trust of which it
is a series) has duly executed and delivered each of the Credit Documents to
which it is a party, and each of the Credit Documents constitutes (assuming due
authorization and execution by the parties thereto other than the Borrowers) its
legal, valid and binding obligation enforceable against it in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
6.03 No Violation. Neither the execution, delivery or performance
(including the incurrence of Loans hereunder) by such Borrower of any of the
Credit Documents, nor compliance by such Borrower with the terms and provisions
hereof and thereof, (i) will contravene any provision of any material law,
statute, rule or regulation (including, without limitation, the Investment
Company Act) or any order, writ, injunction or decree of any court or
governmental instrumentality applicable to such Borrower, (ii) will conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under,
17
or result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of such Borrower pursuant to
the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument to which such
Borrower is a party or by which it or any of its property or assets is bound or
to which it may be subject or (iii) will violate or conflict with the Investment
Practices or any provision of the Articles of incorporation or Declaration of
Trust, as applicable, or By-Laws of such Borrower.
6.04 Governmental Approvals. No order, consent, approval, license;
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery or performance by such
Borrower of any Credit Document to which it is a party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; etc. (a) The financial statements, together with the notes and
schedules thereto, of such Borrower furnished to the Banks prior to the
Effective Date present fairly the financial condition of such Borrower at the
respective dates of such statements and the results of the operations of such
Borrower for the period covered thereby. All such financial statements have been
prepared in accordance with generally accepted accounting principles and
practices in the U.S. consistently applied. As of the Effective Date, since the
respective dates of such financial statements, there has been no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of such Borrower, the
corporation or trust of which such Borrower is a series (if applicable), or, to
the best knowledge of such Borrower, all of the Borrowers taken as a whole that
would materially and adversely affect the ability of any Borrower to perform its
obligations hereunder.
(b) Except as fully disclosed in the financial statements
delivered pursuant to Section 6.05(a) and open trading and shareholder
redemption obligations incurred in the ordinary course of business, there were,
as of the Effective Date, no liabilities or obligations with respect to such
Borrower of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, would be material to such Borrower. As of the Effective Date, except
for open trading and shareholder redemption obligations incurred in the ordinary
course of business, such Borrower knows of no basis for the assertion against it
or any other Borrower of any liability or obligation of any nature whatsoever
that is not fully disclosed in the financial statements delivered pursuant to
Section 6.05(a) which, either individually or in the aggregate, could be
material to any Borrower.
6.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of such Borrower after due inquiry, threatened (i)
with respect to any Credit Document or (ii) that would reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower or the
corporation or trust of which such Borrower is a series (if applicable).
18
6.07 True and Complete Disclosure. None of the factual information
furnished by or on behalf of such Borrower in writing to the Banks (including,
without limitation, all information contained in the Credit Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein, and no other such factual
information (taken as a whole) hereafter furnished by or on behalf of such
Borrower in writing to either the Administrative Agent or any of the Banks,
contains, on the date as of which such information is dated or certified, an
untrue statement of a material fact or omits, on the date as of which such
information is dated or certified, a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
6.08 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Loans shall be used by such Borrower to finance temporarily the sale or
purchase of portfolio securities by such Borrower, the repurchase or redemption
of shares of such Borrower, or for other temporary or emergency purposes
consistent with such Borrower's Investment Practices.
(b) Neither the making of any Loan nor the use of the proceeds
thereof by such Borrower will violate or be inconsistent with the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.
6.09 ERISA. (a) Other than with respect to any ERISA Affiliate of the
Prudential Series Fund, Inc., neither such Borrower nor any ERISA Affiliate of
such Borrower (other than the Investment Adviser) has ever maintained or
contributed to or been obligated to contribute to any "employee benefit plan"
(as defined in Section 3(3) of ERISA). Schedule VI sets forth each Plan; each
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401 (a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401 (a) and 501 (a) of the Code; no
Reportable Event has occurred; no Plan is a multiemployer plan (as defined in
Section 4001 (a)(3) of ERISA); no Plan has an accumulated funding deficiency,
within the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made or have been properly accrued on the balance sheet of
such Borrower or any ERISA Affiliate of such Borrower; such Borrower has not
incurred any material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such
liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to such Borrower of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan; no action, suit, proceeding, hearing, and/or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, expected
or threatened, which action, suit, proceeding, hearing, audit or investigation
has resulted in any material liability, or could reasonably be expected to
result in any material liability, to such Borrower, no lien imposed under the
Code or ERISA on the assets of such
19
Borrower or any ERISA Affiliate of such Borrower exists or is likely to arise on
account of any Plan.
(b) To the best knowledge of such Borrower after due inquiry, the
Investment Adviser has never maintained or contributed to or been obligated to
contribute to any "employee benefit plan" (as defined in Section 3(3) of ERISA)
other than a Defined Contribution Plan. To the best knowledge of such Borrower
after due inquiry, (i) each Defined Contribution Plan (and each related trust,
insurance contract or fund) of the Investment Adviser is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code, (ii) each Defined Contribution Plan (and each
related trust, if any) of the Investment Adviser which is intended to be
qualified under Section 401 (a) of the Code has received a determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401 (a) and 501 (a) of the Code, (iii) all contributions required to
be made with respect to a Defined Contribution Plan of the Investment Adviser
have been timely made, (iv) the Investment Adviser has not incurred any material
liability to or on account of a Defined Contribution Plan pursuant to Section
409, 502(i) or 502(1) of ERISA or Section 4975 of the Code nor does it expect to
incur any such liability under any of the foregoing sections with respect to any
Defined Contribution Plan, (v) no condition exists which presents a material
risk to the Investment Adviser or any ERISA Affiliate of incurring a liability
to or on account of a Defined Contribution Plan pursuant to the foregoing
provisions of ERISA and the Code and (vi) no action, suit, proceeding, hearing,
audit or investigation with respect to the administration, operation or the
investment of assets of any Defined Contribution Plan (other than routine claims
for benefits) is pending, expected or threatened.
6.10 Compliance with Statutes, Etc. Such Borrower is in compliance
with (i) all applicable statutes (including, without limitation, the Investment
Company Act), regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property, except such noncompliance as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower or the
corporation or trust of which such Borrower is a series (if applicable), or any
material adverse effect on the legality, validity or enforceability of this
Agreement or any of the other Credit Documents and (ii) all investment policies
and restrictions set forth in such Borrower's Articles of Incorporation or
Declaration of Trust, By-Laws and Investment Practices in all material
respects.
6.11 Investment Company. Such Borrower is duly registered as an
open-end management investment company, or is a series thereof, under the
Investment Company Act, and such registration has not been revoked or rescinded
and is in full force and effect.
6.12 Investment Adviser. The Investment Adviser is the Manager of such
Borrower and is duly registered as an investment adviser under the Investment
Advisers Act, provided that, when not prohibited by law or regulation or by any
other restriction (contractual or otherwise), and so long as no Default or Event
of Default exists or would result therefrom, upon prior written notice to the
Administrative Agent, the Investment Adviser may delegate a successor Manager
that is or is not an affiliate of the Manager and which is also duly registered
under the Investment Advisers Act.
20
6.13 Affiliation with the Banks. Neither the respective Borrower nor
any Affiliated Person of such Borrower is an Affiliated Person of any Bank.
6.14 Senior Status. Except to the extent secured by Liens permitted by
Section 8.01, the Obligations of each Borrower hereunder rank senior to all
other Indebtedness of the respective Borrower.
SECTION 7. Affirmative Covenants. Each Borrower covenants and agrees that
on and after the Effective Date and until the Commitments have terminated and
the Loans, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full:
7.01 Information Covenants. Such Borrower will deliver, or cause to be
delivered, to the Administrative Agent with sufficient copies for each of the
Banks:
(a) Semi-Annual and Annual Financial Statements. Within 75 days
after the close of each semi-annual and as soon as practicable but not more than
120 days after the close of each annual accounting period in each fiscal year of
such Borrower, a statement of assets and liabilities and a statement of
operations as of the end of such accounting period, in each case with respect to
such Borrower, all of which shall be certified by an officer of such Borrower,
subject to normal year-end audit adjustments, together with, in the case of
annual statements, a certification by an independent certified public
accountant of recognized standing stating that its regular audit was conducted
in accordance with generally accepted audit standards.
(b) Quarterly Statements. Within 10 days after the close of each
quarter of each calendar year, the net fund assets of each Borrower as at the
end of such quarter, in the form and detail similar to those customarily
prepared by the management of each of Borrower for internal use and reasonably
satisfactory to the Administrative Agent, certified by an officer of such
Borrower as being fairly stated in all material respects; provided, however,
that if any Borrower has Loans outstanding, such Borrower shall provide the
Administrative Agent with (i) such net fund assets described above in this
Section 7.0l(b) and (ii) a certificate of an officer of such Borrower showing in
reasonable detail the calculations supporting such Borrower's compliance with
Section 8.09, within two Business Days after the end of each calendar week so
long as any Loans to such Borrower remain outstanding.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01 (a), a certificate of an
officer of such Borrower to the effect that the representations and warranties
by or with respect to such Borrower are true and correct in all material
respects and no Default or Event of Default has occurred and is continuing or,
if any Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof.
(d) Notice of Default or Litigation. Promptly, and in any event
within five Business Days after any executive officer of such Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default or (ii) any litigation or governmental
investigation or proceeding pending (A) against any Borrower or Borrowers which
could reasonably be expected to have a material adverse affect on the business,
21
operations, property, assets, liabilities or condition (financial or otherwise)
of such Borrower or (B) with respect to any Credit Document.
(e) ERISA Reports. As soon as possible and, in any event, within
twenty (20) days after such Borrower, or any ERISA Affiliate of such Borrower
knows or has reason to know of the occurrence of any of the following, such
Borrower will deliver to each of the Banks a certificate of an executive officer
of such Borrower setting forth the full details as to such occurrence and the
action, if any, that such Borrower or the ERISA Affiliate of such Borrower are
required or propose to take, together with any notices required or proposed to
be given or filed by such Borrower, a Defined Contribution Plan participant or
the Defined Contribution Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that such Borrower has
previously delivered to the Banks a certificate and notices (if any) concerning
such event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(l) thereof), and an event described in subsection .62, .63,
..64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan or Defined
Contribution Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that proceedings may be or have been instituted to terminate or appoint a
trustee to administer a Plan; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; or that
such Borrower will or may incur any material liability to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan or Defined Contribution
Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409,
502(i) or 502(l) of ERISA. Such Borrower will deliver to each of the Banks
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. In addition
to any certificate or notice delivered to the Banks pursuant to the first
sentence hereof, copies of any records, documents or other information required
to be furnished to the PBGC or any other government agency, and any material
notices received by such Borrower or any ERISA Affiliate of such Borrower with
respect to any Plan shall be delivered to the Banks no later than twenty (20)
days after the date such records, documents and/or information has been
furnished to the PBGC or any other government agency or such notice has been
received by such Borrower or the ERISA Affiliate of such Borrower, as
applicable.
(f) Other Reports and Filings. Reasonably promptly, copies of all
financial information, proxy materials, prospectuses, statements of additional
information, and other information and reports (including without limitation all
information, material and reports filed or distributed pursuant to Section 30 of
the Investment Company Act) which such Borrower shall deliver to its
shareholders as required by such Section 30.
22
(g) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to such Borrower (including,
without limitation, the investments of such Borrower) as any Bank may reasonably
request in writing.
7.02 Books, Records and Inspections. Such Borrower will keep proper
books of record and account with respect to its operations which reflect in all
material respects the transactions to which it is a party in conformity with
generally accepted accounting principles and applicable law. Such Borrower will
permit officers and designated representatives of the Administrative Agent or
any Bank to visit and inspect any of the properties of such Borrower, and to
examine the books of account of such Borrower and discuss the affairs, finances
and accounts of such Borrower with, and be advised as to the same by, its
respective officers, and independent accountants, all at such reasonable times
and intervals during normal business hours and, to the extent permissible under
applicable banking regulations and auditing standards, upon reasonable advance
notice and to such reasonable extent as either the Administrative Agent or such
Bank may request.
7.03 Compliance with Statutes; Etc. Such Borrower will comply with all
applicable statutes (including, without limitation, the Investment Company Act),
regulations and orders of and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of such Borrower or the corporation or trust
of which such Borrower is a series (if applicable), or any material adverse
effect on the legality, validity or enforceability of this Agreement or any of
the other Credit Documents.
7.04 Investment Company. Such Borrower will at all times (i) be a
registered, open-end management investment company or a series thereof under the
Investment Company Act and (ii) qualify and be treated as a regulated investment
company under the Code.
7.05 Compliance with Investment Practices. Such Borrower will at all
times comply in all material respects with the investment policies and
restrictions set forth in its Investment Practices.
7.06 Compliance with Regulation U. Upon the request of any Bank, such
Borrower will furnish to any Bank such information as such Bank may reasonably
require to determine compliance by such Borrower with Regulation U.
7.07 Use of Proceeds. All proceeds of the Loans shall be used as
provided in Section 6.08(a).
7.08 Anti-Terrorism Laws. Such Borrower shall not knowingly (i)
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making of or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person; (ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224; or (iii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to
23
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
USA Patriot Act. Such Borrower shall deliver to the Administrative Agent any
certification or other evidence requested from time to time by the
Administrative Agent in its sole discretion, confirming such Borrower's
compliance with this Section 7.08.
SECTION 8. Negative Covenants. Each Borrower covenants and agrees that on
and after the Effective Date and until the Commitments have terminated and the
Loans, together with interest, Fees and all other Obligations incurred by such
Borrower hereunder are paid in full:
8.01 Liens. Such Borrower will not create, incur, assume or suffer to
exist any Lien upon or with respect to any of its property or assets (real or
personal, tangible or intangible), whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets, assign any right
to receive income or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute or execute any control agreement with respect to any of its property or
assets; provided that the provisions of this Section 8.01 shall not prevent the
creation, incurrence, assumption or existence of the following:
(i) inchoate Liens for taxes, assessments or governmental charges
or levies not yet due or Liens for taxes, assessments or governmental
charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles;
(ii) Liens in respect of property or assets of such Borrower
imposed by law, which were incurred in the ordinary course of business and
do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's, mechanics', brokers' and custodians' liens
and other similar Liens arising in the ordinary course of business and (a)
which do not in the aggregate materially detract from the value of such
Borrower's property or assets or materially impair the use thereof in the
operation of the business of such Borrower or (b) which are being contested
in good faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Hedging Agreements and Liens in respect thereof;
(iv) Liens incurred by such Borrower in favor of such Borrower's
Custodian; and
(v) Liens incurred by such Borrower in the ordinary course of
business in connection with portfolio investments to the extent such Liens
are permitted by the provisions of such Borrower's Prospectus.
8.02 Consolidation, Merger, Sale or Purchase of Assets, Etc. Such
Borrower will not wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or substantially all of their
24
respective property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) all
or substantially all of the property or assets of any Person (or agree to do any
of the foregoing at any future time) without the consent of the Required Banks
(which consent shall not be unreasonably withheld), except:
(i) So long as no Default or Event of Default with respect to
such Borrower has occurred and is continuing, or would result therefrom,
such Borrower may merge with or into, or acquire all or substantially all
the assets of, another Borrower so long as the surviving Borrower assumes
all of the Obligations (including, without limitation, all indemnity
obligations) of such non-surviving Borrower; and
(ii) such Borrower may sell its assets and purchase investments,
in each case in the ordinary course of business as described in such
Borrower's Prospectus.
8.03 Indebtedness. Such Borrower will not contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) accrued expenses, deferred taxes and current trade accounts
payable, in each case incurred in the ordinary course of business;
(iii) Indebtedness in favor of such Borrower's Custodian
consisting of extensions of credit from the Custodian in the ordinary
course of business;
(iv) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as judgments or awards do not constitute an Event of Default and so
long as execution is not levied thereunder or in respect of which such
Borrower (A) shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review or (B) shall have obtained
a performance bond and Indebtedness in respect of such performance bond;
and
(v) Indebtedness (other than Indebtedness for borrowed money)
arising in connection with any other transaction permissible under the
Investment Company Act and such Borrower's investment objectives and
fundamental investment restrictions, including, but not limited to, Reverse
Repurchase Agreements, mortgage dollar rolls, delayed delivery transactions
(provided that the assets with respect thereto are segregated), when-issued
securities (provided that the assets with respect thereto are segregated)
and loans from other Borrowers or any other Borrower, provided that (x)
Indebtedness of such Borrower pursuant to Reverse Repurchase Agreements
shall not exceed 5.0% of such Borrower's total net asset value and (y) all
such Indebtedness incurred by such Borrower pursuant to this clause (v)
shall not exceed in the aggregate 50% of such Borrower's Asset Coverage
Numerator.
25
Notwithstanding anything to the contrary contained in this Agreement, in no
event shall such Borrower contract, create, incur, assume or suffer to exist any
Senior Securities other than the Loans pursuant to this Agreement.
8.04 Restrictions on Issuance of Capital Stock. No Borrower will issue
any preferred stock which would constitute a senior security under the
Investment Company Act.
8.05 Modifications of Investment Practices, Articles of Incorporation,
By-Laws and Certain Other Agreements. Such Borrower will not amend or modify, or
permit the amendment or modification of, (i) such Borrower's Investment
Practices in any material respect, (ii) such Borrower's Articles of
Incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or Declaration of Trust, as applicable, or By-
Laws, or any agreement entered into by it with respect to its capital stock, or
enter into any new agreement with respect to its capital stock or (iii) its
Investment Advisory Agreement or the Custody Agreements other than any
amendments or modifications pursuant to clauses (ii) or (iii) of this Section
8.05 which are not materially adverse to the interests of the Banks.
8.06 Business. Such Borrower will not engage (directly or indirectly)
in any business other than the business in which such Borrower is engaged on the
Effective Date and other businesses reasonably related thereto.
8.07 ERISA. Such Borrower will not, or will not permit any ERISA
Affiliate of such Borrower (other than the Investment Adviser or any ERISA
Affiliate of the Prudential Series Fund, Inc.) to maintain or contribute or
become obligated to contribute to any "employee benefit plan" (as defined in
Section 3(3) of ERISA).
8.08 Affiliated Person. Neither such Borrower nor any Affiliated
Person of such Borrower will directly or indirectly own, control or hold with
power to vote 5% or more of the outstanding voting securities of (or otherwise
be or become an Affiliated Person of) the Administrative Agent or any Bank.
8.09 Asset Coverage Ratio. No Borrower shall at any time permit its
Asset Coverage Ratio to be less than 3.0:1.0 or such greater ratio as is
provided in such Borrower's Prospectus.
8.10 Interfund Lending. (a) Notwithstanding anything in this Agreement
to the contrary (including section 8.03 hereof), any Borrower may make an
Interfund Loan to another Borrower or borrow an Interfund Loan from another
Borrower, may repay principal and/or interest with respect to an Interfund Loan,
and the mere making, borrowing, or repaying of principal and/or interest in
respect of an Interfund Loan in and of itself shall not, with respect to any
Borrower party thereto (as a lender or a borrower), constitute a violation of
any condition precedent, representation or covenant contained herein or
constitute a Default or an Event of Default; provided that all other terms and
conditions of this Agreement are satisfied, and provided, further, that:
(i) such Interfund Loan (u) does not cause either (A) the
Asset Coverage Ratio of any Borrower to be less than the applicable minimum
Asset Coverage Ratio of such Borrower pursuant to Section 8.09 of this
Agreement at the time of
26
incurrence thereof or (B) the aggregate principal amount of Loans,
Interfund Loans and Investment Adviser Loans outstanding to any Borrower at
the time of incurrence thereof to exceed the Borrowing Base of such
Borrower at such time, (v) is not otherwise prohibited by law, (w) has been
duly authorized, (x) is consistent with the terms of an applicable order of
the United States Securities and Exchange Commission, (y) is not in
contravention of such Borrower's Prospectus and (z) expressly ranks junior
in priority to the repayment in full in cash of all outstanding Obligations
under this Agreement; provided however that principal and/or interest with
respect to an Interfund Loan may be repaid so long as no Default or Event
of Default has occurred and is continuing under this Agreement; and
(ii) if, at any time, (x) an Interfund Loan is outstanding
to such Borrower, (y) such Borrower has Loans outstanding, and (z) either
(A) the Asset Coverage Ratio for such Borrower is less than the applicable
minimum Asset Coverage Ratio of such Borrower pursuant to Section 8.09 of
this Agreement or (B) the aggregate principal amount of Loans, Interfund
Loans and Investment Adviser Loans outstanding to such Borrower at any time
exceeds the Borrowing Base of such Borrower at such time, then such
Borrower shall prepay outstanding Loans hereunder to the extent necessary
to ensure that both the Asset Coverage Ratio of such Borrower after such
prepayments is at least equal to the applicable minimum Asset Coverage
Ratio of such Borrower pursuant to Section 8.09 of this Agreement and the
aggregate principal amount of Loans, Interfund Loans and Investment Adviser
Loans outstanding to such Borrower does not exceed the Borrowing Base of
such Borrower.
(b) Without otherwise limiting the purposes for which proceeds of
any Borrowing may be used as specified in Section 6.08, subject to the
satisfaction of the conditions set forth in Section 5 and the other conditions
of this Agreement, including pro forma compliance with the Borrowing Base of
such Borrower after giving effect to such Borrowing, a Borrower shall be
expressly permitted to use the proceeds of a Borrowing of Loans hereunder to
repay principal and/or interest with respect to an outstanding Interfund Loan of
such Borrower.
8.11 Investment Adviser Lending. (a) Notwithstanding anything in this
Agreement to the contrary (including Section 8.03 hereof), any Borrower may
borrow an Investment Adviser Loan, may repay principal and/or interest with
respect to an Investment Adviser Loan, and the mere borrowing or repaying of
principal and/or interest in respect of an Investment Adviser Loan, in and of
itself shall not, with respect to any Borrower party thereto, constitute a
violation of any condition precedent, representation or covenant contained
herein or constitute a Default or an Event of Default; provided that all other
terms and conditions of this Agreement are satisfied, and provided, further,
that:
(i) such Investment Adviser Loan (v) does not cause either
(A) the Asset Coverage Ratio of any Borrower to be less than the applicable
minimum Asset Coverage Ratio of such Borrower pursuant to Section 8.09 of
this Agreement at the time of incurrence thereof or (B) the aggregate
principal amount of Loans, Interfund Loans and Investment Adviser Loans
outstanding to any Borrower at the time of incurrence thereof to exceed the
Borrowing Base of such Borrower at such time, (w) is not otherwise
prohibited by law, (x) has been duly authorized, (y) is not in
contravention of such
27
Borrower's Prospectus and (z) expressly ranks junior in priority to the
repayment in full in cash of all outstanding Obligations under this
Agreement; provided however that principal and/or interest with respect to
an Investment Adviser Loan may be repaid so long as no Default or Event of
Default has occurred and is continuing under this Agreement; and
(ii) if, at any time, (x) an Investment Adviser Loan is
outstanding to such Borrower, (y) such Borrower has Loans outstanding, and
(z) either (A) the Asset Coverage Ratio for such Borrower is less than the
applicable minimum Asset Coverage Ratio of such Borrower pursuant to
Section 8.09 of this Agreement or (B) the aggregate principal amount of
Loans, Interfund Loans and Investment Adviser Loans outstanding to such
Borrower at any time exceeds the Borrowing Base of such Borrower at such
time, then such Borrower shall prepay outstanding Loans hereunder to the
extent necessary to ensure that both the Asset Coverage Ratio of such
Borrower after such prepayments is at least equal to the applicable minimum
Asset Coverage Ratio of such Borrower pursuant to Section 8.09 of this
Agreement and the aggregate principal amount of Loans, Interfund Loans and
Investment Adviser Loans outstanding to such Borrower does not exceed the
Borrowing Base of such Borrower.
(b) Without otherwise limiting the purposes for which proceeds of
any Borrowing may be used as specified in Section 6.08, subject to the
satisfaction of the conditions set forth in Section 5 and the other conditions
of this Agreement, including pro forma compliance with the Borrowing Base of
such Borrower after giving effect to such Borrowing, a Borrower shall be
expressly permitted to use the proceeds of a Borrowing of Loans hereunder to
repay principal and/or interest with respect to an outstanding Investment
Adviser Loan of such Borrower.
SECTION 9. Events of Default. If at any time any of the following specified
events (each an "Event of Default") shall be in effect with respect to a
Borrower:
9.01 Payments. Such Borrower shall (i) default in the payment when due
of any principal of any Loan or (ii) default, and such default shall continue
unremedied for two or more Business Days, in the payment when due of any
interest on any Loan, or any Fees or any other amounts owing under this
Agreement or with respect to any Loan other than as covered above in clause (i);
or
9.02 Representations; Etc. Any representation, warranty or statement
made by such Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
9.03 Covenants. Such Borrower shall (i) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
7.01 (c), 7.04, 7.05, 7.07 or Section 8, other than Section 8.09; (ii) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 8.09 and such default shall continue unremedied for a
period of three days; or (iii) default in the due performance or observance by
it of any other term, covenant or agreement contained in this Agreement and such
default shall
28
continue unremedied for a period of 30 days after written notice to such
Borrower by the Administrative Agent or any Bank; or
9.04 Default Under Other Agreements. Such Borrower shall (i) default
in any payment of any Indebtedness (other than the Obligations) having an
aggregate principal amount in excess of $5,000,000, beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness
was created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness having an aggregate principal amount
in excess of $5,000,000, or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity;
9.05 Bankruptcy; Etc. Such Borrower or any corporation or trust of
which such Borrower, is a series shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against such Borrower or any corporation or trust
of which such Borrower is a series, and the petition is not controverted within
10 days, or shall continue in effect unstayed for any period of 60 consecutive
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of such Borrower or any corporation or trust of which such
Borrower is a series, or such Borrower or any corporation or trust of which such
Borrower is a series commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to such Borrower or any corporation or trust of which such
Borrower is a series, or there is commenced against such Borrower or any
corporation or trust of which such Borrower is a series any such proceeding
which shall continue in effect unstayed for any period of 60 consecutive days,
or such Borrower or any corporation or trust of which such Borrower is a series
is adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or such Borrower or any
corporation or trust of which such Borrower is a series suffers any appointment
of any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 consecutive days; or such
Borrower or any corporation or trust of which such Borrower is a series makes a
general assignment for the benefit of creditors; or any corporate or trust
action is taken by such Borrower or any corporation or trust of which such
Borrower is a series for the purpose of effecting any of the foregoing; or
9.06 Judgments. One or more judgments or decrees shall be entered
against such Borrower (whether or not other Borrowers are parties thereto)
involving a liability (not fully covered by a reputable and solvent insurance
company or otherwise paid or discharged) in the aggregate amount of $10,000,000
and such judgments and decrees either shall be final and non-appealable or
shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 30 consecutive days; or
29
9.07 Investment Adviser. (i) The Investment Adviser shall cease to be
such Borrower's Manager, except to the extent the Administrative Agent has
received prior notice of the appointment of a successor Manager that is or is
not an affiliate of the Investment Adviser or (ii) any Investment Advisory
Agreement with such Borrower shall cease to be in full force and effect or the
Investment Adviser shall deny or disaffirm any material obligations to be
performed by it under any Investment Advisory Agreement with such Borrower or
shall default in the performance of any of its obligations thereunder; or
9.08 Custody Agreement. Any Custody Agreement with such Borrower shall
cease to be in full force and effect, or such Borrower or the Custodian shall
have given notice, pursuant to any Custody Agreement, of the termination of such
Custody Agreement, except in either case to the extent the Banks have received
prior notice of the appointment of a successor custodian that is a bank or trust
company organized under the laws of the U.S. having assets under custody of at
least $10,000,000,000 and a long-term debt rating of not less than "A-" from a
recognized rating organization and such successor Custodian has entered into an
agreement that is in all material respects the same as such Custody Agreement
immediately prior to the termination thereof or otherwise in form and substance
satisfactory to the Administrative Agent; or
9.09 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA; a Reportable Event shall have occurred; a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
shall be subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(l) thereof) and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 shall be reasonably expected to occur with respect to such Plan within the
following 30 days; any Plan shall have had or is likely to have a trustee
appointed to administer such Plan; any Plan shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA; a
contribution required to be made with respect to a Plan has not been timely
made; such Borrower or any ERISA Affiliate of such Borrower has incurred or is
likely to incur any liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or a "default", within the meaning
of Section 4219(c)(5) of ERISA, shall occur with respect to any Plan; (b) there
shall result from any such event or events the imposition of a lien against such
Borrower, the granting of a security interest against such Borrower; or a
liability or a material risk of incurring a liability with respect to such
Borrower; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Banks, has had, or could
reasonably be expected to have, a material adverse effect upon the business,
operations, condition (financial or otherwise) or prospects of such Borrower;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to such Borrower, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent or any Bank to enforce its claims against such Borrower (provided, that,
if an Event of Default specified in Section 9.05 shall occur, the result which
30
would occur upon the giving of written notice by the Administrative Agent to
such Borrower as specified in clauses (i) and (a) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment with respect to such Borrower terminated, whereupon the Total
Commitment with respect to such Borrower shall forthwith terminate immediately
and any accrued but unpaid Commitment Fee owing by such Borrower shall forthwith
become due and payable without any other notice of any kind; and (ii) declare
the principal of and any accrued interest in respect of all Loans, and all other
Obligations owing from such Borrower hereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Borrower.
SECTION 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Borrower" shall have the meaning provided in Section 1.13.
"Additional Borrower Request" shall have the meaning provided in
Section 1.13.
"Administrative Agent" shall mean PNC Bank, National Association, in
such capacity as Administrative Agent.
"Affiliated Person" shall have the meaning provided in the Investment
Company Act.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Anti-Terrorism Law" shall mean any law relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.
"Applicable Margin" shall mean (i) in the case of Loans maintained as
Base Rate Loans, 0% and (ii) in the case of Loans maintained as Fed Funds Loans
or LIBOR Loans, 0.50%.
"Asset Coverage Denominator" shall mean, at any time with respect to
any Borrower, the aggregate amount of Senior Securities (including in any event
all Loans hereunder, all Interfund Loans and all Investment Adviser Loans)
representing Indebtedness of such Borrower at such time, determined in
accordance with Section 18 of the Investment Company Act.
"Asset Coverage Numerator" shall mean, at any time with respect to any
Borrower, the total value of the investments and other assets of such Borrower,
less all liabilities and Indebtedness of such Borrower not represented by Senior
Securities, all determined in accordance with Section 18 of the Investment
Company Act, provided that for purposes of this Agreement (i) in no event shall
the total value of the investments and other assets of such Borrower as so
calculated exceed such total value as would be determined in computing net asset
31
value as described in the relevant Prospectus and (ii) in no event shall the
liabilities and Indebtedness (other than Senior Securities) of such Borrower be
less than the respective liabilities attributed to such Borrower for purposes of
calculating net asset value as described in such Borrower's Prospectus.
"Asset Coverage Ratio" shall mean, at any time with respect to any
Borrower, the ratio of the Asset Coverage Numerator for such Borrower at such
time to the Asset Coverage Denominator for such Borrower at such time.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit F (appropriately
completed).
"Bank" shall mean each financial institution listed on Schedule II, as
well as any Person which becomes a "Bank" hereunder pursuant to Section
12.04(b).
"Bank Affiliate" shall mean, with respect to any Bank, (i) an entity
that controls, is controlled by or is under common control with such Bank or
(ii) any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or otherwise investing in bank loans
and similar extensions of credit in the ordinary course of its business and is
administered or managed by such Bank or an entity that controls, is controlled
by or is under common control with such Bank.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (i) 0.50% in excess
of the Fed Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated
as such by the respective Borrower at the time of the incurrence thereof or
conversion thereto.
"Blocked Person" shall have the meaning assigned to such term in
Section 6.14.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean and include the borrowing of one Type of Loan
from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of LIBOR Loans the same Interest
Period, provided that Base Rate Loans or Fed Funds Loans incurred pursuant to
Sections 1.10(b) shall be considered part of the related Borrowing of LIBOR
Loans.
"Borrowing Base" shall mean, at any time for each Borrower, an amount
equal to the lesser of (i) 33 1/3% of the current market value of the total
assets contained in such Borrower's portfolio determined daily according to
independent pricing sources and (ii) any explicit maximum borrowing amount then
specified by such Borrower's Prospectus.
"Business Day" shall mean (i) for all purposes other than as covered
by clauses (ii) and (iii) below, any day except Saturday, Sunday and any day
which shall be in New York
32
City or Philadelphia a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close, (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, LIBOR Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the domestic or London (as the case may be) interbank Eurodollar market
and (iii) with respect to the Asset Coverage Ratio information required to be
delivered in each Notice of Borrowing, any day on which the respective
Borrower's net asset value is required to be calculated in accordance with its
Prospectus as in effect on the Effective Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, for each Bank, the amount set forth opposite
such Bank's name in Schedule II directly below the column entitled "Commitment",
as same may be (i) reduced from time to time pursuant to Sections 2.02 and/or 9
or (ii) adjusted from time to time as a result of assignments to or from such
Bank pursuant to Section 12.04(b).
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, lease,
dividend or other obligation ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (a) for the
purchase or payment of any such primary obligation or (b) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and any other documents
executed and delivered in connection herewith.
"Credit Event" shall mean the making of a Loan.
"Custodian" shall mean Bank of New York, Morgan Xxxxxxx Trust Company,
PFPC Trust Company or State Street Bank and Trust Company, in its capacity as
Custodian, as
33
the case may be with respect to the applicable Borrower, or any successor
Custodian appointed pursuant to the requirements of Section 9.08.
"Custody Agreements" shall mean the custody agreements listed on
Schedule IV hereto, as amended from time to time in accordance with the terms
hereof and thereof and any similar agreements with any successor Custodian to
the extent such agreements meet the requirements of Section 9.08.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defined Contribution Plan" shall mean any pension plan as defined in
Section 3(34) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute) the Investment Adviser or any Borrower.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include any bank (as defined in
the Investment Company Act); provided that no Affiliated Person of any Borrower
and no Affiliated Person of such an Affiliated Person of any Borrower shall be
an Eligible Transferee.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with any Borrower would be deemed to be a "single
employer" within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning provided in Section 9.
"Executive Order No. 13224" shall mean the Executive Order No. 13224
titled "Blocking Property and Prohibiting Transactions with Persons who Commit,
Threaten to Commit, or Support Terrorism", effective September 24, 2001, as the
same has been, or shall hereafter be, renewed, extended, amended or replaced.
"Existing Credit Facilities" shall mean (i) the Credit Agreement,
dated as of March 11, 1999, between the Prudential Series Fund, various banks
and State Street Bank and Trust Company as Operations Agent and Deutsche Bank
AG, New York Branch as Administrative Agent, (ii) the Credit Agreement, dated as
of April 30, 2004, between American Skandia Mutual Funds on behalf of each
series or portfolio named therein and PNC Bank, National Association, and (iii)
and any other "redemption facility" to which any Borrower is a party.
34
"Expiry Date" shall mean October 28, 2005.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fed Funds Loans" shall mean each Loan designated or deemed designated
as such by the respective Borrower at the time of incurrence thereof or
conversion thereto.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 2.01.
"Hedging Agreement" shall mean any financial futures contracts,
agreement to purchase and sell (or write) exchange listed or over-the-counter
put and call options on securities, fixed income indices and securities indices,
Interest Rate Protection Agreements, foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements. Repurchase Agreements,
Reverse Repurchase Agreements or any other securities or financial instruments
or arrangements with a leveraging effect created in the ordinary course of the
investment process or operations of any Borrower to the extent permitted by such
Borrower's Investment Practices.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the face amount of all letters of credit issued for the account
of such Person and, without duplication, all drafts drawn thereunder, (iii) all
Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi), (vii)
or (viii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (iv)
the aggregate amount required to be capitalized under leases under which such
Person is the lessee, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person, (vii) borrowings of securities by such Person and (viii) all
obligations under any Hedging Agreement or under any similar type of agreement.
"Interest Determination Date" shall mean the second Business Day prior
to the commencement of any Interest Period relating to any LIBOR Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
35
"Interfund Lending Agreement" means an agreement entered into between
Borrowers party thereto, providing for the making of subordinated loans from
time to time from one such fund to other such funds.
"Interfund Loan" means any loan by a Borrower to a Borrower pursuant
to an Interfund Lending Agreement.
"Investment Adviser" shall mean Prudential Investments LLC.
"Investment Advisers Act" shall mean the Investment Advisers Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Adviser Lending Agreement" means an agreement entered into
between a Borrower and the Investment Adviser, any entity controlling,
controlled by, or in common control with the Investment Adviser, or any
Subsidiary of the Investment Adviser, as the case may be, providing for the
making of subordinated loans from time to time from the Investment Adviser, any
entity controlling, controlled by, or in common control with the Investment
Adviser, or any Subsidiary of the Investment Adviser, to such Borrower.
"Investment Adviser Loan" means any loan by the Investment Adviser,
any entity controlling, controlled by, or in common control with the Investment
Adviser, or any Subsidiary of the Investment Adviser to a Borrower pursuant to
an Investment Adviser Lending Agreement.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, including the rules and regulations promulgated thereunder.
"Investment Management Agreement" shall mean the Investment Management
Agreement, listed on Schedule V hereto.
"Investment Practices" shall mean the investment objectives and
fundamental investment policies and restrictions of a respective Borrower as set
forth in such Borrower's Prospectus.
"LIBOR" shall mean with respect to each Interest Period for a LIBOR
Loan, (i) an interest rate per annum (rounded upwards, if necessary, to the next
l/100th of 1%) equal to the rate determined by the Administrative Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the average of the London interbank offered rate of
interest per annum for Dollars quoted by the British Bankers' Association set
forth on Moneyline Telerate (or appropriate successor, or if the British
Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent), display page 3750 (or such
other display page on the Moneyline Telerate System as may replace such page
3750) for an amount approximately equal in principal amount to such LIBOR Loan
and having a borrowing date and a maturity comparable to the Interest Period for
such LIBOR Loan, divided (and rounded upward to the next whole multiple of 1/100
of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in
36
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"LIBOR Loan" shall mean each Loan designated as such by the respective
Borrower at the time of the making thereof or conversion thereto bearing
interest at the rates provided in Section 1.08(c).
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, material encumbrance, material lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Manager" shall mean as to each Borrower, the "Manager" as defined in
such Borrower's Prospectus on the Effective Date.
"Margin Stock" shall have the meaning provided in Regulations T, U and
X.
"Maximum Swingline Amount" shall mean $50,000,000.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Obligations" shall mean all amounts owing to the Administrative Agent
or any Bank pursuant to the terms of this Agreement or any other Credit
Document.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Commitment of such Bank at such
time and the denominator of which is the Total Commitment at such time; provided
that if a Percentage of any Bank is to be determined after the Total Commitment
has been terminated, then the Percentage of such Bank shall be determined
immediately prior (and without giving effect) to such termination.
"Person" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA
which is subject to Title IV of ERISA and/or Section 412 of the Code and which
is maintained or contributed to by (or to which there is an obligation to
contribute of) any ERISA Affiliate of the Prudential Series Fund, Inc., and each
such plan for the five year period immediately following
37
the latest date on which such ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan.
"Prime Lending Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"Prospectus" shall mean each Borrower's prospectus, in each case
together with any Statement of Additional Information incorporated therein and
as supplemented, amended or modified from time to time in accordance with the
provisions of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time, to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Reportable Event" shall mean an event described in Section 4043 (c)
of ERISA with respect to a Plan as to which the notice requirement has not been
waived by the PBGC.
"Repurchase Agreement" shall mean any agreement to purchase an asset
presently and then to sell such asset to any other Person in the future.
"Required Banks" shall mean Banks, the sum of whose outstanding
Commitments (or after the termination thereof, the total outstanding Loans) at
such time exceeds 50% of the Total Commitment (or after the termination thereof,
the total outstanding Loans), provided that at any time there are only two Banks
hereunder, it shall mean both Banks.
"Reverse Repurchase Agreement" shall mean any agreement to sell an
asset presently and then to repurchase such asset in the future.
"Revolving Loan" shall have the meaning set forth in Section 1.01.
38
"Senior Securities" shall have the meaning ascribed to such term in
Section 18 of the Investment Company Act.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture, limited liability company or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Swingline Bank" shall mean PNC Bank, National Association.
"Swingline Expiry Date" shall mean the date which is seven Business
Days prior to the Expiry Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Taxes" shall have the meaning provided in Section 3.04(a).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, an amount equal
to the remainder of (i) the Total Commitment at such time less (ii) the
aggregate principal amount of Loans then outstanding, provided that, for
purposes of calculating the Commitment Fee pursuant to Section 2.01(a), "Total
Unutilized Commitment" shall mean an amount equal to the remainder of (i) the
Total Commitment at such time less (ii) the aggregate principal amount of
Revolving Loans then outstanding.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan, a Fed Funds
Loan or a LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"USA Patriot Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, Public Law 107-56, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.
"United States" and "U.S." shall each mean the United States of
America.
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate PNC Bank, National
Association as Administrative Agent to act as specified herein and in the other
Credit
39
Documents. Each Bank hereby irrevocably authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder by or through its officers, directors, agents, employees or
affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Administrative Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by it or them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Administrative Agent
shall be mechanical and administrative in nature; the Administrative Agent shall
not have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Bank; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Administrative Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein.
11.03 Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Bank, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrowers in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrowers and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any credit
or other information with respect thereto, whether coming into its possession
before the making of any Loan or at any time or times thereafter. The
Administrative Agent shall not be responsible to any Bank for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of any Borrower or Borrowers, or be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of any Borrower or Borrowers, or the
existence or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank shall have any right
of action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting
40
hereunder or under any other Credit Document in accordance with the instructions
of the Required Banks.
11.05 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
11.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrowers, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
Percentages, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties hereunder or under
any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct.
11.07 The Administrative Agent in its Individual Capacity. With
respect to its obligations to make Loans under this Agreement, the
Administrative Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks", "Required Banks"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its capacity as such. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with the Borrowers or any affiliate of a
Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower or any affiliate of a
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
11.08 Resignation by the Administrative Agent. (a) The Administrative
Agent may resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 15 Business Days'
prior written notice to the Borrowers and the Banks. Such resignation by the
Administrative Agent shall take effect upon the appointment of a successor
Administrative Agent pursuant to Sections 11.08(b) and (c) below or as otherwise
provided in this Agreement.
(b) Upon any such notice of resignation, the Banks shall appoint
a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrowers (it
being understood and agreed that any Bank is deemed to be acceptable to the
Borrowers).
41
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrowers (such consent not to be unreasonably withheld), shall
then appoint a successor Administrative Agent who shall serve as Administrative
Agent hereunder or thereunder until such time, if any, as the Banks appoint a
successor Administrative Agent as provided in Section 11.08(b).
(d) If no successor Administrative Agent has been appointed
pursuant to Section 11.08(b) or 11.08(c) by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Banks shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Banks appoint a
successor Administrative Agent as provided in Section 11.08(b).
11.09 Syndication Agent; Lead Arranger; Co-Lead Arranger. The
Syndication Agent, Lead Arranger and Co-Lead Arranger shall have no duties or
responsibilities under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, Indemnification, Etc. The Borrowers shall:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees, costs and disbursements of
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Administrative Agent in
connection with their syndication efforts with respect to this Agreement and of
the Administrative Agent and each of the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent
and for each of the Banks); (ii) pay and hold each of the Banks harmless from
and against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank) to pay such
taxes; and (iii) indemnify the Administrative Agent and each Bank, and each of
their respective officers, directors, employees, representatives and agents from
and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions or any other environmental claims),
losses, damages, penalties, claims, actions, judgments, suits, costs, expenses
and disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Bank is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any of
the proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents;
42
provided that the Borrowers shall have no obligation under this Section 12.01 to
the Administrative Agent or any Bank with respect to any liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses and disbursements to the extent arising from the gross
negligence or willful misconduct of the Person to be indemnified. To the extent
that the undertaking to indemnify, pay or hold harmless any Person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrowers shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law. Each Borrower's obligations under this Section
12.01 are several and not joint, with such obligations to be allocated to each
Borrower pro rata based on the relative asset size of the Borrowers (or, upon
prior written notice to the Administrative Agent, based on such other method
acceptable to the Administrative Agent as the Board of Trustee/Directors of the
Board shall determine in compliance with the Investment Company Act).
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the defaulting Borrower, the Investment
Adviser or any other Person, any such notice being hereby expressly waived, to
setoff and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of such defaulting Borrower against and on
account of the Obligations and liabilities of such defaulting Borrower to such
Bank under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to Section 12.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder.
Each Bank agrees to promptly notify the relevant Borrower after the exercise by
such Bank of any right of setoff; provided that any failure on the part of any
Bank to so notify such Borrower shall not affect the validity of such setoff.
12.03 Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by electronic transmission, telecopy
transmission or posting on a secured web site), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or three days after being deposited in the mail, postage prepaid, or
the next Business Day if sent by reputable overnight courier, postage prepaid,
for delivery on the next Business Day, or, in the case of telecopy notice, when
received during normal business hours, or in the case of electronic
transmission, when received and in the case of posting on a secured web site,
upon receipt of (i) notice of such posting and (ii) rights to access such web
site, addressed as follows in the case of the Borrowers, the Administrative
Agent and the Swingline Bank, in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective parties
hereto:
43
If to the Borrowers: Prudential Investments Fund Management LLC
000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxx 0
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
If to a Bank: At such party's address specified opposite its name
on Schedule III hereto
If to the Administrative PNC Bank, National Association
Agent: Agency Services
PNC Firstside Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telecopy: (000)000-0000
provided that any notice, request or demand given to or made upon the
Administrative Agent shall not be effective until received by the Administrative
Agent.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that no Borrower may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of each of the Banks and,
provided further, that although any Bank may transfer, assign or grant
participations in its rights as provided hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitment hereunder except as provided in Section 12.04(b)) and
the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall transfer
or grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would extend the final
scheduled maturity of any Loan in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment shall not constitute a change
in the terms of such participation, and that an increase in the Total Commitment
or Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof). In the case
of any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrowers hereunder shall be determined as if
such Bank had not sold such participation. Notwithstanding the foregoing, so
long as no Default or Event of Default exists and is continuing, without the
prior written consent of the Borrowers (which
44
consent shall not be unreasonably withheld or delayed), no Bank may grant a
participation in its rights hereunder to any participant; provided that no such
consent shall be required if the participant is (i) such Bank's parent company,
(ii) a Bank Affiliate or (iii) Bank under the Credit Agreement.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitment
and related outstanding Obligations hereunder to its parent company and/or any
affiliate of such Bank or to one or more Banks, provided that any such assignee
is an Eligible Transferee and written notice of such assignment is provided as
soon as practicable to the Administrative Agent and the Borrowers or (y) assign
all or a portion of such Commitment to one or more Eligible Transferees upon the
prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld or delayed, and so long as no Default or Event of Default
exists and is continuing, the Borrowers, which consent shall not be unreasonably
withheld or delayed, each of which assignees shall become party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement;
provided further that (i) at such time Schedule II shall be deemed modified to
reflect the Commitments of such new Bank and of the existing Banks, (ii)
assignments shall be in minimum amounts of $5,000,000 and (iii) the
Administrative Agent shall receive, at the time of each such assignment, from
the assigning or assignor Bank, the payment of a non-refundable fee of $3,500.
To the extent of any assignment pursuant to this Section 12.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its assigned
Commitment. At the time of each assignment pursuant to this Section 12.04(b) to
a Person which is not already a Bank hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes, the respective assignee Bank shall, to the extent
legally entitled to do so, provide to the Borrowers the forms described in
clause (ii) of Section 3.04(b). To the extent that an assignment of all or any
portion of a Bank's Commitment and related outstanding Obligations pursuant to
this Section 12.04(b) would, at the time of such assignment, result in increased
costs under this Agreement, including under Section 1.10, 1.11 or 3.04 from
those being charged by the respective assigning Bank prior to such assignment,
then the Borrowers shall not be obligated to pay such increased costs (although
the Borrowers shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Notwithstanding anything to the contrary contained in this
Section 12.04, in connection with any participation or assignment the respective
Bank granting the assignment or participation shall (i), in the agreement with
respect thereto, obtain a representation from the participant or assignee to the
effect that it is not an Affiliated Person of the Investment Adviser or any
Borrower, or an Affiliated Person of such an Affiliated Person of the Investment
Adviser or any Borrower and (ii) inform such Person in writing that its review
of all non-public information made available to such Person is subject to the
confidentiality provisions contained in Section 12.16 of this Agreement.
(d) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans to a Federal Reserve Bank in support of borrowings made
by such Bank from such Federal Reserve Bank, provided that no such pledge shall
release the xxxxxxx Bank from its obligations hereunder.
45
12.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Investment Adviser and/or the Borrowers and the Administrative Agent
or any Bank shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document, unless expressly provided
otherwise, are cumulative and not exclusive of any rights, powers or remedies
which the Administrative Agent or any Bank would otherwise have. No notice to or
demand on any Borrower or the Investment Adviser shall in any case entitle any
Borrower or the Investment Adviser to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Bank to any other or further action in any
circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of any Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that if it receives any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Commitment Fee, and which is in a greater proportion (relative
to the amount then owed all Banks) than the amount received at the time by all
other Banks, then such Bank receiving such excess payment shall purchase for
cash without recourse or warranty from the other Banks an interest in the
Obligations of the respective Borrowers to such Banks in such amount as shall
result in a proportional participation by all the Banks in such amount; provided
that if all or any portion of such excess amount is thereafter recovered from
such Bank, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the relevant Borrower to the
Banks); provided, however, that, except as otherwise specifically provided
herein, all computations determining compliance with Section 8 shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks pursuant to Section
6.05(a).
(b) All computations of interest and Commitment Fees hereunder
shall be made on the basis of a year of 365/366 days for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or Commitment Fees are payable.
46
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA
WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA OR OF THE UNITED
STATES FOR THE EASTERN DISTRICT OF PENNSYLVANIA, AND, BY EXECUTION AND DELIVERY
OF THIS AGREEMENT, EACH OF THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH OF THE BORROWERS HEREBY FURTHER IRREVOCABLY WAIVES
ANY CLAIM THAT SUCH COURTS LACK JURISDICTION OVER SUCH PERSON, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY
SUCH COURT LACKS JURISDICTION OVER SUCH BORROWER EACH OF THE BORROWERS FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, WITH RETURN RECEIPT REQUESTED, TO
SUCH PERSON AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER RECEIPT. EACH OF THE BORROWERS TO THE EXTENT
PERMITTED BY LAW HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED UNDER THIS AGREEMENT OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT
OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY TO THIS AGREEMENT
IN ANY OTHER JURISDICTION.
(b) TO THE EXTENT PERMITTED BY LAW, EACH OF THE BORROWERS HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
47
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers at their
office for delivery or notices, the Administrative Agent and each of the Banks.
12.10 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which each Borrower and each of the Banks shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered the same to the Administrative Agent at address set forth
in Section 12.03 or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it and each of the conditions set forth in Section 4 have been satisfied or
waived. The Administrative Agent will give the Borrowers and each Bank prompt
notice of the occurrence of the Effective Date.
12.11 Table of Contents and Headings Descriptive. The table of
contents and the headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver; Etc. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by each Borrower and the Required Banks, provided that no such
change, waiver, discharge or termination shall, without the consent of each Bank
(with Obligations being directly affected in the case of following clause (i)),
(i) extend the final scheduled maturity of any Loan, or reduce the rate or
extend the time of payment of interest or Fees thereon, or reduce the principal
amount thereof, (ii) amend, modify or waive any provision of Section 1.14 or
this Section 12.12, (iii) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Commitments are included on the Effective Date) or
(iv) consent to the assignment or transfer by any Borrower of any of its
respective rights or obligations under this Agreement or any Credit Document;
provided further, that no such change, waiver, discharge or termination shall
(i) increase the Total Commitment of any Bank over the amount thereof then in
effect without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of the Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank) or (ii) without the consent of the Administrative
Agent, amend, modify or waive any provision of Section 11 or any other provision
as same relates to the rights or obligations of the Administrative Agent.
48
12.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 3.04, 12.01 and 12.06 shall survive the
execution, delivery and termination of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 12.14 would, at the time of such
transfer, result in increased under this Agreement, including costs under
Section 1.10, 1.11 or 3.04 from those being charged by the respective Bank prior
to such transfer, then the relevant Borrower shall not be obligated to pay such
increased costs (although the Borrowers shall be obligated to pay any other
increased costs of the type above resulting from changes after the date of the
respective transfer).
12.15 Limited Recourse. (a) Anything contained in this Agreement to
the contrary notwithstanding, the agreements as set forth in this Agreement
between each Borrower and the Administrative Agent and Banks shall be several,
separate and distinct from those between each other Borrower and the
Administrative Agent and Banks, and the Obligations of each Borrower shall be
repaid solely from the assets of such Borrower. The Banks agree that repayment
of the Obligations of a Borrower is without recourse to the assets of any other
Borrower. If such Borrower is a corporation or trust, then the Banks may look
solely to the assets of that corporation or trust for repayment of the
Obligations. If such Borrower is a series of a corporation or trust, then the
Banks may look solely to the assets of that series of the corporation or trust
and not to any other assets of the corporation or trust of which it is a series.
(b) The parties hereto agree that, with respect to the
obligations of any Borrower which is a trust or a series of a trust, (i) the
officers, trustees and shareholders of such trust or series of a trust shall
have no personal liability in their capacity as officer, trustee or shareholder
of such trust or series of a trust and (ii) the Banks shall have no recourse to
the personal assets or property of any officer, trustee or shareholder of such
trust; provided that nothing in this clause (b) shall limit the recourse of the
Banks to any assets or property of any trust or any series of a trust.
12.16 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 12.16, each Bank agrees that it shall not disclose without the
prior consent of a Borrower (other than to its employees, auditors, advisors or
counsel or to another Bank), and shall use solely for the purpose of analyzing
the financial condition of the Borrowers, any information with respect to such
Borrower which is now or in the future furnished pursuant to this Agreement or
any other Credit Document and which is material non-public information of any
Borrower, provided that any Bank may disclose such information (i) as has become
generally available to the public, (ii) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having jurisdiction over such Bank such as the Federal Reserve
Board or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (iii) as may be
required or appropriate in respect of any summons or subpoena binding upon it or
in connection with any litigation, (iv) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (v) to the Administrative Agent
and (vi) to any prospective or actual transferee or participant in connection
with any contemplated transfer or participation in any of the
49
Commitments or any interest therein by such Bank, provided that such prospective
transferee agrees to be bound by the provisions of this Section 12.16.
(b) Each Borrower hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information related to such Borrower
(including, without limitation, any non-public customer information regarding
the creditworthiness of such Borrower, provided such Persons shall be subject to
the provisions of this Section 12.16 to the same extent as such Bank).
[Signature Page to Follow]
50
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
000 Xxxxxxxx Xxxxxx, Xxxxxxx Center 3 AUTHORIZED OFFICER, on behalf of
Xxxxxx, Xxx Xxxxxx 00000-0000 each Borrower
Telephone No.: (000)000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
-------------------------------
Name:
Title: Treasurer
PNC BANK, NATIONAL ASSOCIATION,
Individually and as Administrative
Agent
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
Individually and as Syndication
Agent
By:
-------------------------------
Name:
Title:
Signature Page to Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
000 Xxxxxxxx Xxxxxx, Xxxxxxx Center 3 AUTHORIZED OFFICER, on behalf of
Xxxxxx, Xxx Xxxxxx 00000-0000 each Borrower
Telephone No.: (000)000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx By:
-------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
Individually and as Administrative
Agent
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Director
THE BANK OF NEW YORK,
Individually and as Syndication
Agent
By:
-------------------------------
Name:
Title:
Signature Page to Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
000 Xxxxxxxx Xxxxxx, Xxxxxxx Center 3 AUTHORIZED OFFICER, on behalf of
Xxxxxx, Xxx Xxxxxx 00000-0000 each Borrower
Telephone No.: (000)000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx By:
-------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
Individually and as Administrative
Agent
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
Individually and as Syndication
Agent
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: XXXXXX X. XXXXXXX
Title: Vice President
Signature Page to Credit Agreement
SCHEDULE I
BORROWERS
1. AST Alger All-Cap Growth Portfolio, a series of American Skandia Trust
2. AST Alliance Growth and Income Portfolio, a series of American Skandia
Trust
3. AST Alliance Growth Portfolio, a series of American Skandia Trust
4. AST Alliance/Xxxxxxxx Growth + Value Portfolio, a series of American
Skandia Trust
5. AST American Century Income & Growth Portfolio, a series of American
Skandia Trust
6. AST American Century Strategic Balanced Portfolio, a series of American
Skandia Trust
7. AST Xxxxx & Steers Realty Portfolio, a series of American Skandia Trust
8. AST XxXX Global Allocation Portfolio, a series of American Skandia Trust
9. AST XxXX International Equity Portfolio, a series of American Skandia Trust
10. AST XxXX Large-Cap Value Portfolio, a series of American Skandia Trust
11. AST XxXX Small-Cap Growth Portfolio, a series of American Skandia Trust
12. AST XxXX Small-Cap Value Portfolio, a series of American Skandia Trust
13. AST Federated Aggressive Growth Portfolio, a series of American Skandia
Trust
14. AST Gabelli All-Cap Value Portfolio, a series of American Skandia Trust
15. AST Gabelli Small-Cap Value Portfolio, a series of American Skandia Trust
16. AST Xxxxxxx Sachs Concentrated Growth Portfolio, a series of American
Skandia Trust
17. AST Xxxxxxx Xxxxx High Yield Portfolio, a series of American Skandia Trust
18. AST Xxxxxxx Sachs Mid-Cap Growth Portfolio, a series of American Skandia
Trust
19. AST Xxxxxxx Xxxxx Small-Cap Value Portfolio, a series of American Skandia
Trust
20. AST Hotchkis & Wiley Large-Cap Value Portfolio, a series of American
Skandia Trust
21. AST JPMorgan International Equity Portfolio, a series of American Skandia
Trust
I-1
SCHEDULE I
22. AST Lord Xxxxxx Bond-Debenture Portfolio, a series of American Skandia
Trust
23. AST Xxxxxxx Capital Growth Portfolio, a series of American Skandia Trust
24. AST MFS Global Equity Portfolio, a series of American Skandia Trust
25. AST MFS Growth Portfolio, a series of American Skandia Trust
26. AST Xxxxxxxxx Xxxxxx Mid-Cap Growth Portfolio, a series of American Skandia
Trust
27. AST Xxxxxxxxx Xxxxxx Mid-Cap Value Portfolio, a series of American Skandia
Trust
28. AST PIMCO Limited Maturity Bond Portfolio, a series of American Skandia
Trust
29. AST PIMCO Total Return Bond Portfolio, a series of American Skandia Trust
30. AST Xxxxxxx Xxxxxxxxx Core Value Portfolio, a series of American Skandia
Trust
31. AST Xxxxxxx Xxxxxxxxx Managed Index 500 Portfolio, a series of American
Skandia Trust
32. AST State Street Research Small-Cap Growth Portfolio, a series of American
Skandia Trust
33. AST X. Xxxx Price Asset Allocation Portfolio, a series of American Skandia
Trust
34. AST X. Xxxx Price Global Bond Portfolio, a series of American Skandia Trust
35. AST X. Xxxx Price Natural Resources Portfolio, a series of American Skandia
Trust
36. AST Xxxxxxx Xxxxx International Growth Portfolio, a series of American
Skandia Trust
37. California Income Series, a series of Xxxxxx California Municipal Fund
38. California Series, a series of Xxxxxx California Municipal Fund
39. Conservative Balanced Portfolio, a series of The Prudential Series Fund,
Inc.
40. Diversified Bond Portfolio, a series of The Prudential Series Fund, Inc.
41. Diversified Conservative Growth Portfolio, a series of The Prudential
Series Fund, Inc.
42. Xxxxxx Active Allocation Fund, a series of The Prudential Investment
Portfolios, Inc.
43. Xxxxxx Global Total Return Fund, Inc.
44. Xxxxxx Government Income Fund, Inc.
I-2
SCHEDULE I
45. Xxxxxx High Yield Fund, Inc.
46. Xxxxxx International Equity Fund, a series of Prudential World Fund, Inc.
47. Xxxxxx Large-Cap Core Equity Fund, a series of Xxxxxx Tax-Managed Funds
48. Xxxxxx National Municipals Fund, Inc.
49. Xxxxxx Short-Term Corporate Bond Fund, a series of Xxxxxx Short-Term
Corporate Bond Fund, Inc.
50. Xxxxxx Small-Cap Core Equity Fund, Inc.
51. Xxxxxx Stock Index Fund, a series of Xxxxxx Index Series Fund
52. Xxxxxx Total Return Bond Fund, Inc.
53. Xxxxxx Ultra Short Bond Fund, a series of the Xxxxxx Short-Term Corporate
Bond Fund, Inc.
54. Equity Portfolio, a series of The Prudential Series Fund, Inc.
55. Flexible Managed Portfolio, a series of The Prudential Series Fund, Inc.
56. Florida Series, a series of Xxxxxx Municipal Series Fund
57. Global Portfolio, a series of The Prudential Series Fund, Inc.
58. Government Income Portfolio, a series of The Prudential Series Fund, Inc.
59. High Income Series, a series of Xxxxxx Municipal Bond Fund
60. High Yield Bond Portfolio, a series of The Prudential Series Fund, Inc.
61. Insured Series, a series of Xxxxxx Municipal Bond Fund
62. Intermediate-Term Bond Portfolio, a series of The Target Portfolio Trust
63. International Bond Portfolio, a series of The Target Portfolio Trust
64. International Equity Portfolio, a series of The Target Portfolio Trust
65. Xxxxxxxx 20/20 Focus Portfolio, a series of The Prudential Series Fund,
Inc.
66. Xxxxxxxx Equity Opportunity Fund, a series of The Prudential Investment
Portfolios, Inc.
67. Xxxxxxxx Financial Services Fund, a series of Xxxxxxxx Sector Funds, Inc.
I-3
SCHEDULE I
68. Xxxxxxxx Global Growth Fund, a series of Prudential World Fund, Inc.
69. Xxxxxxxx Growth Fund, a series of The Prudential Investment Portfolios,
Inc.
70. Xxxxxxxx Health Sciences Fund, a series of Xxxxxxxx Sector Funds, Inc.
71. Xxxxxxxx Natural Resources Fund, Inc.
72. Xxxxxxxx Portfolio, a series of The Prudential Series Fund, Inc.
73. Xxxxxxxx Small Company Fund, Inc.
74. Xxxxxxxx Technology Fund, a series of Xxxxxxxx Sector Funds, Inc.
75. Xxxxxxxx U.S. Emerging Growth Fund, Inc.
76. Xxxxxxxx Utility Fund, a series of Xxxxxxxx Sector Funds, Inc.
77. Xxxxxxxx Value Fund
78. JennisonDryden Conservative Allocation Fund, a series of The Prudential
Investment Portfolios, Inc.
79. JennisonDryden Growth Allocation Fund, a series of The Prudential
Investment Portfolios, Inc.
80. JennisonDryden Moderate Allocation Fund, a series of The Prudential
Investment Portfolios, Inc.
81. Jennsion 20/20 Focus Fund
82. Large Capitalization Growth Portfolio, a series of The Target Portfolio
Trust
83. Large Capitalization Value Portfolio, a series of The Target Portfolio
Trust
84. Mortgage Backed Securities Portfolio, a series of The Target Portfolio
Trust
85. Natural Resources Portfolio, a series of The Prudential Series Fund, Inc.
86. New Jersey Series, a series of Xxxxxx Municipal Series Fund
87. New York Series, a series of Xxxxxx Municipal Series Fund
88. Xxxxxxxx-Xxxxxxxxx Growth Equity Fund, a series of Xxxxxxxx-Xxxxxxxxx Fund,
Inc.
89. Pennsylvania Series, a series of Xxxxxx Municipal Series Fund
90. Prudential's Gibraltar Fund
I-4
SCHEDULE I
91. Small Capitalization Growth Portfolio, a series of The Target Portfolio
Trust
92. Small Capitalization Stock Portfolio, a series of The Prudential Series
Fund, Inc.
93. Small Capitalization Value Portfolio, a series of The Target Portfolio
Trust
94. SP Aggressive Growth Asset Allocation Portfolio, a series of The Prudential
Series Fund, Inc.
95. SP AIM Aggressive Growth Portfolio, a series of The Prudential Series Fund,
Inc.
96. SP AIM Core Equity Portfolio, a series of The Prudential Series Fund, Inc.
97. SP Alliance Large Cap Growth Portfolio, a series of The Prudential Series
Fund, Inc.
98. SP Balanced Asset Allocation Portfolio, a series of The Prudential Series
Fund, Inc.
99. SP Conservative Asset Allocation Portfolio, a series of The Prudential
Series Fund, Inc.
100. XX Xxxxx Value Portfolio, a series of The Prudential Series Fund, Inc.
101. SP Deutsche International Equity Portfolio, a series of The Prudential
Series Fund, Inc.
102 XX Xxxxxxx Sachs Small Cap Value Portfolio, a series of The Prudential
Series Fund, Inc.
103. SP Growth Asset Allocation Portfolio, a series of The Prudential Series
Fund, Inc.
104. SP Large Cap Value Portfolio, a series of The Prudential Series Fund Inc.
105. SP MFS Capital Opportunities Portfolio, a series of The Prudential Series
Fund, Inc.
106. SP Mid Cap Growth Portfolio, a series of The Prudential Series Fund, Inc.
107. SP PIMCO High Yield Portfolio, a series of The Prudential Series Fund, Inc.
108. SP PIMCO Total Return Portfolio, a series of The Prudential Series Fund,
Inc.
109. SP Prudential U.S. Emerging Growth Portfolio, a series of The Prudential
Series Fund, Inc.
110. SP State Street Research Small-Cap Growth Portfolio, a series of The
Prudential Series Fund, Inc.
111. SP Strategic Partners Focused Growth Portfolio, a series of The Prudential
Series Fund, Inc.
112. SP Technology Portfolio, a series of The Prudential Series Fund, Inc.
113. SP Xxxxxxx Xxxxx International Growth Portfolio, a series of The Prudential
Series Fund, Inc.
I-5
SCHEDULE I
114. Stock Index Portfolio, a series of The Prudential Series Fund, Inc.
115. Strategic Partners Balanced Fund, a series of Strategic Partners Mutual
Funds, Inc.
116. Strategic Partners Bond Fund, a series of Strategic Partners Mutual Funds,
Inc.
117. Strategic Partners Capital Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
118. Strategic Partners Capital Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
119. Strategic Partners Concentrated Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
120. Strategic Partners Conservative Growth Fund, a series of Strategic Partners
Asset Allocation Funds
121. Strategic Partners Core Value Fund, a series of Strategic Partners Mutual
Funds, Inc.
122. Strategic Partners Equity Fund, Inc.
123. Strategic Partners Equity Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
124. Strategic Partners Focused Growth Fund, a series of Strategic Partners
Opportunity Funds
125. Strategic Partners Focused Value Fund, a series of Strategic Partners
Opportunity Funds
126. Strategic Partners Growth with Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
127. Strategic Partners Health Sciences Fund, a series of Strategic Partners
Mutual Funds, Inc.
128. Strategic Partners High Growth Fund, a series of Strategic Partners Asset
Allocation Funds
129. Strategic Partners High Yield Bond Fund, a series of Strategic Partners
Mutual Funds, Inc.
130. Strategic Partners International Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
131. Strategic Partners International Value Fund, a series of Prudential World
Fund, Inc.
132. Strategic Partners Large Capitalization Growth Fund, a series of Strategic
Partners Style Specific Funds
133. Strategic Partners Large Capitalization Value Fund, a series of Strategic
Partners Style Specific Funds
134. Strategic Partners Managed Index 500 Fund, a series of Strategic Partners
Mutual Funds, Inc.
135. Strategic Partners Managed Large Cap Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
136. Strategic Partners Managed OTC Fund, a series of Strategic Partners Mutual
Funds, Inc.
I-6
SCHEDULE I
137. Strategic Partners Managed Small Cap Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
138. Strategic Partners Mid Cap Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
139. Strategic Partners Mid-Cap Value Fund, a series of Strategic Partners
Opportunity Funds
140. Strategic Partners Moderate Growth Fund, a series of Strategic Partners
Asset Allocation Funds
141. Strategic Partners New Era Growth Fund, a series of Strategic Partners
Opportunity Funds
142. Strategic Partners Real Estate Securities Fund
143. Strategic Partners Relative Value Fund, a series of Strategic Partners
Mutual Funds, Inc.
144. Strategic Partners Small Cap Growth Opportunity Fund, a series of Strategic
Partners Mutual Funds, Inc.
145. Strategic Partners Small Capitalization Growth Fund, a series of Strategic
Partners Style Specific Funds
146. Strategic Partners Small Capitalization Value Fund, a series of Strategic
Partners Style Specific Funds
147. Strategic Partners Small Company Fund, a series of Strategic Partners
Mutual Funds, Inc.
148. Strategic Partners Technology Fund, a series of Strategic Partners Mutual
Funds, Inc.
149. Strategic Partners Total Return Bond Fund, a series of Strategic Partners
Style Specific Funds
150. Total Return Bond Portfolio, a series of The Target Portfolio Trust
151. Value Portfolio, a series of The Prudential Series Fund, Inc.
152. Zero Coupon Bond Portfolio 2005, a series of The Prudential Series Fund,
Inc.
I-7
SCHEDULE II
COMMITMENTS
Revolving
Credit Swing Line
Name of Bank Commitment Commitment
------------------------------ ------------ -----------
PNC Bank, National Association $250,000,000 $50,000,000
The Bank of New York $250,000,000 $ 0
TOTAL $500,000,000 $50,000,000
============ ===========
II-1
SCHEDULE III
BANK ADDRESSES
PNC Bank, National Association 0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
Attention: D. Xxxx Xxxxxxx, Vice President
The Bank of New York Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Managing Director
III-1
SCHEDULE IV
CUSTODY AGREEMENTS
CUSTODIAN CONTRACT
Between
EACH OF THE PARTIES INDICATED ON APPENDIX A
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held by It....................-1-
2. Duties to the Custodian with Respect to Property of The Fund Held By
the Custodian in the United States....................................-2-
2.1 Holding Securities.................................................-2-
2.2 Delivery of Securities.............................................-2-
2.3 Registration of Securities.........................................-6-
2.4 Bank Accounts......................................................-7-
2.5 Availability of Federal Funds......................................-7-
2.6 Collection of Income...............................................-8-
2.7 Payment of Fund Monies.............................................-8-
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased......................................................-11-
2.9 Appointment of Agents.............................................-11-
2.10 Deposit of Securities in Securities Systems.......................-11-
2.10A Fund Assets Held in the Custodian's Direct Paper System...........-13-
2.11 Segregated Account................................................-14-
2.12 Ownership Certificates for Tax Purposes...........................-15-
2.13 Proxies.......................................................... -16-
2.14 Communications Relating to Fund Portfolio Securities..............-16-
2.15 Reports to Trust by Independent Public Accountants................-16-
3. Duties of the Custodian with Respect to Property of the Fund Held
Outside of the United States.........................................-17-
3.1 Appointment of Foreign Sub-Custodians.............................-17-
3.2 Assets to be Held.................................................-17-
3.3 Foreign Securities Depositories...................................-18-
3.4 Segregation of Securities.........................................-18-
3.5 Agreements with Foreign Banking Institutions......................-18-
3.6 Access of Independent Accountants of the Fund.....................-19-
3.7 Reports by Custodian..............................................-19-
3.9 Liability of Foreign Sub-Custodians...............................-20-
3.10 Liability of Custodian............................................-21-
3.11 Reimbursements for Advances.......................................-21-
3.12 Monitoring Responsibilities.......................................-22-
3.13 Branches of U.S. Banks............................................-22-
4. Payments for Repurchases or Redemptions and Sales of Shares of the
Fund.................................................................-23-
-i-
5. Proper Instructions...............................................-24-
6. Actions Permitted without Express Authority.......................-24-
7. Evidence of Authority.............................................-25-
8. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income........................-26-
9. Records...........................................................-26-
10. Opinion of Fund's Independent Accountant..........................-27-
11. Compensation of Custodian.........................................-27-
12. Responsibility of Custodian.......................................-27-
13. Effective Period, Termination and Amendment.......................-29-
14. Successor Custodian...............................................-30-
15. Interpretive and Additional Provisions............................-32-
16. Massachusetts Law to Apply........................................-32-
17. Prior Contracts...................................................-32-
18. The Parties.......................................................-32-
19. Limitation of Liability...........................................-33-
-ii-
CUSTODIAN CONTRACT
This Contract between State Street Bank and Trust Company, a Massachusetts
trust company, having its principal place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the "Custodian", and each Fund
listed on Appendix A which evidences its agreement to be bound hereby executing
a copy of this Contract (each such Fund individually hereinafter referred to as
the "Fund").
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of its assets,
including securities it 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") pursuant to the provisions of the Articles of
Incorporation/ Declaration of Trust. The Fund agrees to deliver to the Custodian
all securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Fund from time to time, and the cash consideration received by it
for such new or treasury shares of capital stock, ("Shares") of the Fund as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall 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 Directors/ Trustees of the Fund, and
provided that the Custodian shall have the same responsibility or liability to
the Fund on account of any actions or omissions of any sub-custodian so employed
as any such sub-custodian has to the Custodian, provided that the Custodian
agreement with any such domestic sub-custodian shall impose on such
sub-custodian responsibilities and liabilities similar in nature and scope to
those imposed by this Agreement with respect to the functions to be performed by
such sub-custodian. The Custodian may employ as sub-custodians for the Fund's
securities and other assets the foreign banking institutions and foreign
securities depositories designated in Schedule "A" hereto but only in accordance
with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of The Fund Held By the
Custodian in the United States.
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in the
United States, including all domestic securities owned by the Fund, other than
(a) securities which are maintained pursuant to Section 2.10 in a clearing
agency which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of Treasury, collectively referred to herein
as "Securities System" and (b) commercial paper of an issuer for which State
Street Bank and Trust Company acts as issuing and paying agent ("Direct Paper")
which is deposited and/or maintained in the Direct Paper System of the Custodian
pursuant to Section 2.10A.
2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book-entry
system account ("Direct Paper System") only upon receipt of Proper Instructions,
which may be continuing instructions when deemed
-2-
appropriate by the parties, and only in the following cases:
(1) Upon sale of such securities for the account of the Fund 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 Fund;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
(4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
(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 Fund 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 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 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 Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with
-3-
"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 or willful misconduct;
(8) For exchange or conversation 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 Fund, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund,
which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is
to be credited to the Custodian's account in the book-entry
-4-
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 Fund prior to the receipt of such
collateral;
(11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, but only against
receipt of amounts borrowed;
(12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
(13) For delivery in accordance with the provisions of any agreement
among the Fund, 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 and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund;
(14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in
-5-
connection with distributions in kind, as may be described from
time to time in the Fund's currently effective prospectus and
statement of additional information ("prospectus"), in
satisfaction of requests by holders of Shares for repurchase or
redemption; and
(15) For any other proper business purpose, but only upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors/Trustees or of the Executive
Committee signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, specifying the securities to
be delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper business
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the Fund or in
the name of any nominees of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, unless the Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment adviser as the
Fund, or in the name or nominee name of any agent appointed pursuant to Section
2.9 or in the name or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on behalf of the Fund under
the terms of this Contract shall be in "street name" or other good delivery
form. If, however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts to timely collect
-6-
income due the Fund on such securities and to notify the Fund on a best efforts
basis of relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject only
to draft or order by the Custodian acting pursuant to the terms of this
Contract, 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 Fund, other than
cash maintained by the Fund, in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940. Funds held
by the Custodian for the Fund 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 Investment Company Act of 1940 and that each such bank or
trust company and the funds to be approved by vote of a majority of the Board of
Directors/Trustees of the Fund. Such funds shall be deposited by the Custodian
in its capacity as Custodian and shall be withdrawable by the Custodian only in
that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
and the Custodian, the Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to the Fund as of specified times agreed upon from
time to time by the Fund and the Custodian in the amount of checks received in
payment for Shares of the Trust which are deposited into the Fund's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian
-7-
shall collect on a timely basis all income and other payments with respect to
registered securities held hereunder to which the Fund 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 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 the Fund'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 the Fund on
securities loaned pursuant to the provisions of Section 2.2(10) shall be the
responsibility of the 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 Fund is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of the Fund in the following cases only:
(1) Upon the purchase of securities held domestically, options,
futures contracts or options on futures contracts for the account
of the Fund 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 Investment Company Act of
-8-
1940, as amended, to act as a custodian and has been designated
by the Custodian as its agent for this purpose) registered in the
name of the Fund 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 Securities
System, in accordance with the conditions set forth in Section
2.10 hereof; (c) in the case of a purchase involving the Direct
Paper System, in accordance with the conditions set forth in
Section 2.10A; (d) in the case of repurchase agreements entered
into between the Fund and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (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 Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund 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 in
Article 5;
(2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares issued by the Fund as
set forth
-9-
in Article 4 hereof;
(4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: 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 declared pursuant to the
governing documents of the Fund;
(6) For payment of the amount of dividends received in respect of
securities sold short;
(7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution
of Board of Directors/Trustees or of the Executive Committee of
the Fund signed by an officer of the Fund and certified by its
Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is
to be made, declaring such purpose to be a proper purpose, and
naming the person or persons to whom such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every case
where payment for purchase of securities for the account of the Fund is made by
the Custodian in advance of receipt of the securities purchased in the absence
of specific written instructions from the Fund to so pay in
-10-
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by the
Custodian.
2.9 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 Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Article 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.
2.10 Deposit of Securities in Securities Systems. The Custodian may deposit
and/or maintain domestic securities owned by the Fund in a clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934, which acts as a securities depository, or in
the book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities System"
in accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
(1) The Custodian may keep domestic securities of the Fund in a
Securities System provided that such securities are represented
in an account ("Account") of the Custodian in the Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
(2) The records of the Custodian with respect to domestic securities
of the Fund which are maintained in a Securities System shall
identify by book-
-11-
entry those securities belonging to the Fund;
(3) The Custodian shall pay for domestic securities purchased for the
account of the Fund upon (i) receipt of advice from the
Securities System that such securities have been transferred to
the Account, and (ii.) the making of an entry on the records of
the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer domestic
securities sold for the account of the Fund upon (i) receipt of
advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Fund. Copies of
all advices from the Securities System of transfers of domestic
securities for the account of the Fund shall identify the Fund,
be maintained for the Fund by the Custodian and be provided to
the Fund at its request. Upon request, the Custodian shall
furnish the Fund confirmation of each transfer to or from the
account of the Fund in the form of a written advice or notice
and shall furnish promptly to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund.
(4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
-12-
(5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 13 hereof;
(6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
2.10A Fund Assets Held in the Custodian's Direct Paper System The Custodian may
deposit and/or maintain securities owned by the Fund in the Direct Paper System
of the Custodian subject to the following provisions:
(1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions;
(2) The Custodian may keep securities of the Fund in the Direct Paper
System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which
shall not include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise
-13-
for customers;
(3) The records of the Custodian with respect to securities of the
Fund which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Fund;
(4) The Custodian shall pay for securities purchased for the account
of the Fund upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to
the account of the Fund. The Custodian shall transfer securities
sold for the account of the Fund upon the making of an entry on
the records of the Custodian to reflect such transfer and receipt
of payment for the account of the Fund;
(5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of a
written advice or notice, of Direct Paper on the next business
day following such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's transaction in
the Direct Paper System for the account of the Fund;
(6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Fund may reasonably
request from time to time;
2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.10 hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer registered
under
-14-
the Exchange Act and a member of the 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 Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash, government securities or liquid,
high-grade debt obligations in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon purchased
or sold by the Fund, (iii) for the purpose of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in the case of
clause (iv), upon receipt of, in addition to Proper Instructions, a certified
copy of a resolution of the Board of Directors/Trustees or of the Executive
Committee signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.12 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 the Fund held by it and in connection with transfers of
such securities.
2.13 Proxies. 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
-15-
securities are registered otherwise than in the name of the Fund or a nominee of
the Fund, 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.
2.14 Communications Relating to Fund Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the Fund all
written information (including, without limitation, pendency of calls and
maturities of securities held domestically and expirations of rights in
connection therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the securities being held for the
Fund. With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Fund all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Fund desires to
take action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least three business
days prior to the date of which the Custodian is to take such action.
2.15 Reports to Fund by Independent Public Accountants. The Custodian shall
provide the Fund, at such times as the 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 Securities System, relating to the services provided by the Custodian under
this Contract; such reports shall be of sufficient scope and in sufficient
detail, as
-16-
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.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside of
the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Fund's securities
and other assets maintained outside the United States the foreign banking
institutions and foreign securities depositories designated on Schedule A hereto
("foreign sub-custodians"). Upon receipt of "Proper Instructions", as defined
in Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Directors/Trustees, the Custodian and the Fund may agree to
amend Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as
sub-custodian. Upon receipt of Proper Instructions, the Fund may instruct the
Custodian to cease the employment of any one or more such sub-custodians for
maintaining custody of the Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
asserts maintained in the custody of the foreign sub-custodians to: (a) "foreign
securities", as defined in paragraph (c)(1) of Rule 17f-5 under the Investment
Company Act of 1940, and (b) cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably necessary to effect the
Fund's foreign securities transactions.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Fund shall be maintained
in foreign
-17-
securities depositories only through arrangements implemented by the foreign
banking institutions serving as sub-custodians pursuant to the terms hereof.
Where possible, such arrangements shall include entry into agreements containing
the provisions set forth in Section 3.5 hereof.
3.4 Segregation of Securities. The Custodian shall identify on its books as
belonging to the Fund, the foreign securities of the Fund held by each foreign
sub-custodian. Each agreement pursuant to which the Custodian employs a foreign
banking institution shall require that such institution establish a custody
account for the Custodian on behalf of the Fund and physically segregate in that
account, securities and other assets of the Fund, and, in the event that such
institution deposits the Fund's securities in a foreign securities depository,
that it shall identify on its books as belonging to the Custodian, as agent for
the Fund, the securities so deposited.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall be substantially in the form set forth in
Exhibit I hereto and shall provide that (a) the Fund's assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of the foreign banking institution or its creditors or agent, except a
claim of payment for their safe custody or administration; (b) beneficial
ownership of the Fund's assets will be freely transferable without the payment
of money or value other than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging to the Fund; (d) officers
of or auditors employed by, or other representatives of the Custodian, including
to the extent permitted under applicable law the independent public accountants
for the Fund, will be given access to the books and records of the foreign
banking institution relating to
-18-
its actions under its agreement with the Custodian; and (e) assets of the Fund
held by the foreign sub-custodian will be subject only to the instructions of
the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of any
foreign banking institution employed as a foreign sub-custodian insofar as such
books and records relate to the performance of such foreign banking institution
under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the securities and
other assets of the Fund held by foreign sub-custodians, including but not
limited to an identification of entities having possession of the Fund's
securities and other assets and advices or notifications of any transfers of
securities to or from each custodial account maintained by a foreign banking
institution for the Custodian on behalf of the Fund indicating, as to securities
acquired for the Fund, the identity of the entity having physical possession of
such securities.
3.8 Transactions in Foreign Custody Account
(a) Except as otherwise provided in paragraph (b) of this Section 3.8,
the provision of Sections 2.2 and 2.7 of this Contract shall apply, in their
entirety to the foreign securities of the Fund held outside the United States by
foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of the Fund and
delivery of securities maintained for the account of the Fund may be effected
in accordance with the customary established securities trading or securities
processing practices and procedures in the jurisdiction
-19-
or market in which the transaction occurs, including, without limitation,
delivering securities to the purchaser thereof or to a dealer therefore (or an
agent for such purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same extent as set
forth in Section 2.3 of this Contract, and the Fund agrees to hold any such
nominee harmless from any liability as a holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign sub-custodian
shall require the institution to exercise reasonable care in the performance of
its duties and to indemnify, and hold harmless, the Custodian and each Fund from
and against any loss, damage, cost, expense, liability or claim arising out of
or in connection with the institution's performance of such obligations. At the
election of the Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking institution as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set forth with
respect to sub-custodians generally in this Contract and, regardless of whether
assets are maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated by paragraph
3.13 hereof, the Custodian shall not be liable for any loss, damage,
-20-
cost, expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where the
sub-custodian has otherwise exercised reasonable care. Notwithstanding the
foregoing provisions of this paragraph 3.10, in delegating custody duties to
State Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except such loss
as may result from (a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses (excluding
a bankruptcy or insolvency of State Street London Ltd. not caused by political
risk) due to Acts of God, nuclear incident or other losses under circumstances
where the Custodian and State Street London Ltd. have exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or sale of
foreign exchange or of contracts for foreign exchange, or in the event that the
Custodian or its nominees shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as any arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund 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 the Fund assets to the
extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be similar in
kind and scope to that furnished to the Fund in
-21-
connection with the initial approval of this Contract. In addition, the
Custodian will promptly inform the Fund in the event that the Custodian learns
of a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the case of
any foreign sub-custodian not the subject of an exemptive order from the
Securities and Exchange Commission is notified by such foreign sub-custodian
that there appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the equivalent thereof) or that
its shareholders' equity has declined below $200 million (in each case computed
in accordance with generally accepted U.S. accounting principles).
3.13 Branches of U.S. Banks
(a) Except as otherwise set forth in this Contract, the provisions of
Article 3 shall not apply where the custody of the Fund assets are maintained in
a foreign branch of a banking institution which is a "bank" as defined by
Section 2(a)(5) of the Investment Company Act of 1940 meeting the qualification
set forth in Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.
(b) Cash held for the Fund in the United Kingdom shall be maintained
in an interest bearing account established for the Fund with the Custodian's
London branch, which account shall be subject to the direction of the Custodian,
State Street London Ltd. or both.
4. Payments for Repurchases or Redemptions and Sales of Shares of the Fund
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation/Declaration of Trust and any
applicable votes of the Board of Directors/Trustees of the Fund pursuant
thereto, the Custodian shall, upon receipt of instructions
-22-
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 of
the Fund, 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 of the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the 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 the Fund and the
Custodian.
The Custodian shall receive from the distributor for the Fund's Shares or
from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
5. Proper Instructions
Proper Instructions as used herein means a writing signed or initialed by
one or more person or persons as the officers of the Fund shall have from time
to time authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the purpose
for which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
It is understood and agreed that the Board
-23-
of Directors/Directors/Trustees has authorized (i) Prudential Mutual Fund
Management Inc., as Manager of the Fund, and (ii) The Prudential Investment
Corporation (or Prudential-Bache Securities Inc.), as Subadviser to the Fund, to
deliver proper instructions with respect to all matters for which proper
instructions are required by this Article 5. The Custodian may rely upon the
certificate of an officer of the Manager or Subadviser, as the case may be, with
respect to the person or persons authorized on behalf of the Manager and
Subadviser, respectively, to sign, initial or give proper instructions for the
purpose of this Article 5. Proper Instructions may include communications
effected directly between electro-mechanical or electronic devices provided that
the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the Fund's assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian pursuant to
any three-party agreement which requires a segregated asset account in
accordance with Section 2.11.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
(1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund;
(2) surrender securities in temporary form for securities in
definitive form;
(3) endorse for collection, in the name of the Fund, 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
-24-
of the Fund except as otherwise directed by the Board of Directors/Trustees of
the Fund.
7. 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 Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors/Trustees of the Fund as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any determination or of
any action by the Board of Directors/ Trustees pursuant to the Articles of
Incorporation/Declaration of Fund as described in such vote, and such vote may
be considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
8. 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 Board of Directors/Trustees of the Fund to
keep the books of account of the Fund and/or compute the net asset value per
share of the outstanding shares of the Fund or, if directed in writing to do so
by the Fund, 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 Fund as described in the Fund's currently effective
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. The calculations of the net asset
value per share and the daily income of the Fund shall be made at the time or
times described
-25-
from time to time in the Fund's currently effective prospectus.
9. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, 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 the Fund and employees and
agents of the Securities and Exchange Commission. The Custodian shall, at the
Fund's request, supply the Fund with a tabulation of securities owned by the
Fund 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.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund 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, Form N-2 (in the case of a closed
end fund) and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
11. 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 the Fund and
the Custodian.
-26-
12. 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 Contract 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 Contract but shall be
kept indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for the Fund) on
all matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into between the
Custodian and the Fund.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States and, regardless of whether assets are maintained
in the custody of a foreign banking institution, a foreign securities depository
or a branch of a U.S. bank as contemplated by paragraph 3.11 hereof, the
Custodian shall not be liable for any loss, damage, cost, expense, liability or
claim resulting from, or caused by, the direction of or authorization by the
Fund to maintain custody or any securities or cash of the Fund in a foreign
country including, but not limited to, losses resulting from nationalization,
-27-
expropriation, currency restrictions, or acts of war or terrorism.
If the Fund 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 being liable for the payment of money or incurring liability of some
other form, the Fund, 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 the Fund requires the Custodian to advance cash or securities for any
purpose 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 Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund 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 the Fund
assets to the extent necessary to obtain reimbursement provided, however that,
prior to disposing of Fund assets hereunder, the Custodian shall give the Fund
notice of its intention to dispose of assets identifying such assets and the
Fund shall have one business day from receipt of such notice to notify the
Custodian if the Fund wishes the Custodian to dispose of Fund assets of equal
value other than those identified in such notice.
13. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement
-28-
of the parties hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than sixty (60) days after the date of
such delivery or mailing; provided, however that the Custodian shall not act
under Section 2.10 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Directors/Trustees of
the Fund has approved the initial use of a particular Securities System and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Directors/Trustees has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended and that the Custodian shall not act under
Section 2.10A hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors/Trustees has
approved the initial use of the Direct Paper System and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Board of
Directors/Trustees has reviewed the use by the Fund of the Direct Paper System;
provided further, however, that the Fund shall not amend or terminate this
Contract in contravention of any applicable federal or state regulations, or any
provision of the Articles of Incorporation/Declaration of Trust, and further,
provided, that the Fund may at any time by action of its Board of
Directors/Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation
-29-
as may be due as of the date of such termination and shall likewise reimburse
the Custodian for its costs, expenses and disbursements.
14. Successor Custodian
If a successor custodian shall be appointed by the Board of
Directors/Trustees of the Fund, the Custodian shall, upon termination, deliver
to such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities then held by it hereunder and shall
transfer to an account of the successor custodian all of the Fund's securities
held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors/Trustees of the Fund, deliver at the office of the Custodian and
transfer such securities, funds and other properties in accordance with such
vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors/Trustees 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 Investment Company Act of
1940, doing business in Boston, Massachusetts, 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 and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the
-30-
Custodian under this Contract.
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 the Fund to procure the certified copy of the vote referred to or of
the Board of Directors/Trustees to appoint a successor custodian, 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 Contract relating to the duties and obligations of
the Custodian shall remain in full force and effect.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both 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
the Articles of Incorporation/ Declaration of Trust of the Fund. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
16. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
17. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between
-31-
the Fund and the Custodian relating to the custody of the Fund's assets.
18. The Parties
All references herein to the "Fund" are to each of the Funds listed on
Appendix A individually, as if this Contract were between such individual Fund
and the Custodian. With respect to any Fund listed on Appendix A which is
organized as a Massachusetts Business trust, references to Board of Directors
and Articles of Incorporation shall be deemed a reference to Board of
Directors/Trustees and Articles of Incorporation/Declaration of Trust
respectively and reference to shares of capital stock shall be deemed a
reference to shares of beneficial interest.
19. Limitation of Liability
Each Fund listed on Appendix A that is referenced as a Massachusetts
Business Trust is the designation of the Trustees under a Declaration of Trust,
dated (see Appendix A) and all persons dealing with the Fund must look solely to
the property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the dates set forth on Appendix A.
-00-
XXXXXX XXXXX XXXXXX BANK AND TRUST COMPANY
By
------------------------------ -----------------------------------
ATTEST EACH OF THE FUNDS LISTED ON APPENDIX A
By
------------------------------ -----------------------------------
S. Xxxx Xxxx Xxxxxxx X. Xxxxxxx
Secretary President
-33-
CUSTODY AGREEMENT
AGREEMENT, dated as of November 7, 2002 between each Fund listed on the
attached Schedule A hereto, including any series thereof (each a "Fund") each
having its principal office and place of business at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxxx 00000 (the "Fund") and The Bank of New York, a New York
corporation authorized to do a banking business having its principal office and
place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "Authorized Person" shall be any person, whether or not an officer or
employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.
2. "BNY Affiliate" shall mean any office, branch or subsidiary of The Bank
of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering securities, its successors and nominees.
4. "Business Day" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "Certificate" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to Custodian,
which is actually received by Custodian by letter or facsimile transmission and
signed on behalf of the Fund by an Authorized Person or a person reasonably
believed by Custodian to be an Authorized Person.
6. "Composite Currency Unit" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "Depository" shall include (a) the Book-Entry System, (b) the Depository
Trust Company, (c) any other clearing agency or securities depository registered
with the Securities and Exchange Commission identified to the Fund from time to
time, and (d) the respective successors and nominees of the foregoing.
8. "Foreign Depository" shall mean (a) Euroclear, (b) Clearstream Banking,
societe anonyme, (c) each Eligible Securities Depository as defined in Rule
17f-7 under the Investment Company Act of 1940, as amended, identified to the
Fund from time to time, and (d) the respective successors and nominees of the
foregoing.
9. "Instructions" shall mean communications transmitted by electronic or
telecommunications media, including S.W.I.F.T., computer-to-computer interface,
or dedicated transmission lines.
10. "Oral Instructions" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
11. "Series" shall mean the various portfolios, if any, of the Funds listed
on Schedule A hereto, and if none are listed references to Series shall be
references to the Funds.
12. "Securities" shall include, without limitation, any common stock and
other equity securities, bonds, debentures and other debt securities, notes,
mortgages or other obligations, and any instruments representing rights to
receive, purchase, or subscribe for the same, or representing any other rights
or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
13. "Subcustodian" shall mean a bank (including any branch thereof) or
other financial institution (other than a Foreign Depository) located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities hereunder and identified to the Fund from time to time,
and their respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all Securities
and cash at any time delivered to Custodian during the term of this Agreement,
and authorizes Custodian to hold Securities in registered form in its name or
the name of its nominees. Custodian hereby accepts such appointment and agrees
to establish and maintain one or more securities accounts and cash accounts for
each Series in which Custodian will hold Securities and cash as provided herein.
Custodian shall maintain books and records segregating the assets of each Series
from the assets of any other Series. Such accounts (each, an "Account";
collectively, the "Accounts") shall be in the name of the Fund.
(b) Custodian may from time to time establish on its books and records
such sub-accounts within each Account as the Fund and Custodian may agree upon
(each a "Special
-2-
Account"), and Custodian shall reflect therein such assets as the Fund may
specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, futures commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian shall transfer to such account such Securities and money as the Fund
may specify in a Certificate or Instructions.
2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered by
the Fund, approved by a resolution of its board, constitutes a valid and legally
binding obligation of the Fund, enforceable in accordance with its terms, and
there is no statute, regulation, rule, order or judgment binding on it, and no
provision of its charter or by-laws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property, which would
prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with all
applicable laws and requirements, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted;
(d) It will not knowingly use the services provided by Custodian
hereunder in any manner that is, or will result in, a violation of any law, rule
or regulation applicable to the Fund;
(e) Unless The Bank of New York is the Fund's foreign custody manager,
as defined in Rule 17f-5 under the Investment Company Act of 1940, as amended
(the '"40 Act"), either its board or its foreign custody manager has determined
that use of each Subcustodian (including any Replacement Custodian) and each
Depository which Custodian or any Subcustodian is authorized to utilize in
accordance with Section l(a) of Article III hereof, satisfies the applicable
requirements of the '40 Act and Rules 17f-4 or 17f-5 thereunder, as the case may
be;
(f) The Fund or its investment adviser has determined that the custody
arrangements of each Foreign Depository provide reasonable safeguards against
the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the '40 Act;
(g) It is fully informed of the protections and risks associated with
various methods of transmitting Instructions and Oral Instructions and
delivering Certificates to Custodian, understands that there may be more secure
methods of transmitting or delivering the
-3-
same than the methods selected by the Fund, agrees that the security procedures
(if any) to be utilized provide a commercially reasonable degree of protection
in light of its particular needs and circumstances, and acknowledges and agrees
that Instructions need not be reviewed by Custodian, may conclusively be
presumed by Custodian to have been given by person(s) duly authorized, and may
be acted upon as given;
(h) It shall manage its borrowings, including, without limitation, any
advance or overdraft (including any day-light overdraft) in the Accounts, so
that the aggregate of its total borrowings for each Fund does not exceed the
amount such Fund is permitted to borrow under the '40 Act;
(i) Its transmission or giving of, and Custodian acting upon and in
reliance on, Certificates, Instructions, or Oral Instructions pursuant to this
Agreement shall at all times comply with the '40 Act;
(j) It shall impose and maintain restrictions on the destinations to
which cash may be disbursed by Instructions to ensure that each disbursement is
for a proper purpose; and
(k) It has the right to make the pledge and grant the security
interest and security entitlement to Custodian contained in Section 1 of Article
V hereof, free of any right of redemption or prior claim of any other person or
entity, such pledge and such grants shall have a first priority subject to no
setoffs, counterclaims, or other liens or grants prior to or on a parity
therewith, and it shall take such additional steps as Custodian may require to
assure such priority.
3. The Fund hereby covenants that it shall from time to time complete and
execute and deliver to Custodian upon Custodian's request a Form FR U-l (or
successor form) whenever the Fund borrows from Custodian any money to be used
for the purchase or carrying of margin stock as defined in Federal Reserve
Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any Securities received by it from time to time for the Fund's account.
Custodian shall be entitled to utilize Depositories, Subcustodians, and, subject
to subsection(c) of this Section 1, Foreign Depositories, to the extent possible
in connection with its performance hereunder. Securities and cash held in a
Depository or Foreign Depository will be held subject to the rules, terms and
conditions of such entity. Securities and cash held through Subcustodians shall
be held subject to the terms and conditions of Custodian's agreements with such
Subcustodians. Subcustodians may be authorized to hold Securities in Foreign
Depositories in which such Subcustodians participate. Unless otherwise required
by local law or practice or a particular subcustodian agreement, Securities
deposited with a Subcustodian, a Depositary or a Foreign Depository will be held
in a commingled account, in the name of Custodian, holding only Securities held
by Custodian as custodian for its customers. Custodian shall identify on its
books and records the Securities and cash belonging to the Fund, whether held
directly or indirectly through Depositories, Foreign Depositories, or
Subcustodians. Custodian shall, directly or indirectly
-4-
through Subcustodians, Depositories, or Foreign Depositories, endeavor, to the
extent feasible, to hold Securities in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for cancellation and/or payment and/or
registration, or where such Securities are acquired. Custodian at any time may
cease utilizing any Subcustodian and/or may replace a Subcustodian with a
different Subcustodian (the "Replacement Subcustodian"). In the event Custodian
selects a Replacement Subcustodian, Custodian shall not utilize such Replacement
Subcustodian until after the Fund's board or foreign custody manager has
determined that utilization of such Replacement Subcustodian satisfies the
requirements of the '40 Act and Rule 17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to the
contrary, Custodian shall hold Securities indirectly through a Subcustodian only
if (i) the Securities are not subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors or
operators, including a receiver or trustee in bankruptcy or similar authority,
except for a claim of payment for the safe custody or administration of
Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
(c) With respect to each Foreign Depository, Custodian shall exercise
reasonable care, prudence, and diligence (i) to provide the Fund with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing basis
and promptly notify the Fund of any material change in such risks in accordance
with the requirements of the '40 Act and Rule 17f-7 hereunder. The Fund
acknowledges and agrees that such analysis and monitoring shall be made on the
basis of, and limited by, information gathered from Subcustodians or through
publicly available information otherwise obtained by Custodian, and shall not
include any evaluation of Country Risks. As used herein the term "Country Risks"
shall mean with respect to any Foreign Depository: (a) the financial
infrastructure of the country in which it is organized, (b) such country's
prevailing custody and settlement practices, (c) nationalization, expropriation
or other governmental actions, (d) such country's regulation of the banking or
securities industry, (e) currency controls, restrictions, devaluations or
fluctuations, and (f) market conditions which affect the order execution of
securities transactions or affect the value of securities. In the event that the
Custodian shall determine that a Foreign Depository no longer meets the
requirements of Rule 17f-7, the Fund's assets maintained in such Foreign
Depository shall be withdrawn as soon as reasonably practical, and the Custodian
shall notify the Fund of any securities maintained in any such Foreign
Depository which may not be withdrawn.
2. Custodian shall furnish the Fund with an advice of daily transactions
(including a confirmation of each transfer of Securities) and a monthly summary
of all transfers to or from the Accounts.
3. With respect to all Securities held hereunder, Custodian shall, unless
otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund as
promptly as practicable of any such amounts due but not paid;
-5-
(b) Present for payment and receive the amount paid upon all
Securities which may mature and advise the Fund as promptly as practicable of
any such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents that it
may actually receive from an issuer of Securities which, in the opinion of
Custodian, are intended for the beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates under any tax laws now or hereafter in
effect in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or a
Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall promptly notify the Fund of rights or discretionary
actions with respect to Securities held hereunder, and of the date or dates by
when such rights must be exercised or such action must be taken, provided that
Custodian has actually received, from the issuer or the relevant Depository
(with respect to Securities issued in the United States) or from the relevant
Subcustodian, Foreign Depository, or a nationally or internationally recognized
bond or corporate action service to which Custodian subscribes, timely notice of
such rights or discretionary corporate action or of the date or dates such
rights must be exercised or such action must be taken. Absent actual receipt of
such notice, Custodian shall have no liability for failing to so notify the
Fund.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business Days
prior to the last scheduled date to act with respect to such Securities (or such
earlier date or time as Custodian may specify in writing to the Fund). Absent
Custodian's timely receipt of such Certificate or Instructions, Custodian shall
not be liable for failure to take any action relating to or to exercise any
rights conferred by such Securities, provided that Custodian shall have provided
prompt timely notice of any notice it actually received.
5. All voting rights with respect to Securities, however registered, shall
be exercised by the Fund or its designee. For Securities issued in the United
States, Custodian's only duty shall be to mail to the Fund any documents
(including proxy statements, annual reports and signed proxies) actually
received by Custodian relating to the exercise of such voting rights. With
respect to Securities issued outside of the United States, Custodian's only duty
shall be to
-6-
provide the Fund with access to a provider of global proxy services at the
Fund's request. The Fund shall be responsible for all costs associated with its
use of such services.
6. Custodian shall promptly advise the Fund upon Custodian's actual receipt
of notification of the partial redemption, partial payment or other action
affecting less than all Securities of the relevant class. If Custodian, any
Subcustodian, any Depository, or any Foreign Depository holds any Securities in
which the Fund has an interest as part of a fungible mass, Custodian, such
Subcustodian, Depository, or Foreign Depository may select the Securities to
participate in such partial redemption, partial payment or other action in any
non-discriminatory manner that it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and other
governmental charges, including any interest or penalty with respect thereto
("Taxes"), with respect to any cash or Securities held on behalf of the Fund or
any transaction related thereto. The Fund shall indemnify Custodian and each
Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or
any other withholding agent is required under applicable laws (whether by
assessment or otherwise) to pay on behalf of, or in respect of income earned by
or payments or distributions made to or for the account of the Fund (including
any payment of Tax required by reason of an earlier failure to withhold).
Custodian shall, or shall instruct the applicable Subcustodian or other
withholding agent to, withhold the amount of any Tax which is required to be
withheld under applicable law upon collection of any dividend, interest or other
distribution made with respect to any Security and any proceeds or income from
the sale, loan or other transfer of any Security. In the event that Custodian or
any Subcustodian is required under applicable law to pay any Tax on behalf of
the Fund, Custodian is hereby authorized to withdraw cash from any cash account
in the amount required to pay such Tax and to use such cash, or to remit such
cash to the appropriate Subcustodian or other withholding agent, for the timely
payment of such Tax in the manner required by applicable law. If the aggregate
amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian
shall promptly notify the Fund of the additional amount of cash (in the
appropriate currency) required, and the Fund shall directly deposit such
additional amount in the appropriate cash account promptly after receipt of such
notice, for use by Custodian as specified herein. In the event that Custodian
reasonably believes that Fund is eligible, pursuant to applicable law or to the
provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax
which is otherwise required to be withheld or paid on behalf of the Fund under
any applicable law, Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold or pay such Tax at such
reduced rate or refrain from withholding or paying such Tax, as appropriate;
provided that Custodian shall have received from the Fund all documentary
evidence of residence or other qualification for such reduced rate or exemption
required to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is obtainable only by means of an application for refund, Custodian and the
applicable Subcustodian shall have no responsibility for the accuracy or
validity of any forms or documentation provided by the Fund to Custodian
hereunder. The Fund hereby agrees to
-7-
indemnify and hold harmless Custodian and each Subcustodian in respect of any
liability arising from any underwithholding or underpayment of any Tax which
results from the inaccuracy or invalidity of any such forms or other
documentation, and such obligation to indemnify shall be a continuing obligation
of the Fund, its successors and assigns notwithstanding the termination of this
Agreement.
9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the actual settlement of
all sale transactions, based upon advices received by Custodian from
Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in
U.S. dollars or such other currency as the Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a BNY Affiliate
acting as principal or otherwise through customary banking channels. The Fund
may issue a standing Certificate or Instructions with respect to foreign
exchange transactions, but Custodian may establish rules or limitations
concerning any foreign exchange facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding cash denominated in a
foreign currency.
10. Custodian shall promptly send to the Fund (a) any reports it receives
from a Depository on such Depository's system of internal accounting control,
and (b) such reports on its own system of internal accounting control as the
Fund may reasonably request from time to time.
11. Until such time as Custodian receives a certificate to the contrary
with respect to a particular Security, Custodian may release the identity of the
Fund to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and shareholder.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund, the Fund
shall deliver to Custodian a Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be settled on the same day
the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed
-8-
simultaneously. Notwithstanding any provision in this Agreement to the contrary,
settlements, payments and deliveries of Securities may be effected by Custodian
or any Subcustodian in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction in
which the transaction occurs, including, without limitation, delivery to a
purchaser or dealer therefor (or agent) against receipt with the expectation of
receiving later payment for such Securities. The Fund assumes full
responsibility for all risks, including, without limitation, credit risks,
involved in connection with such deliveries of Securities.
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of Securities or interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will not be
"final" until Custodian shall have received immediately available funds which
under applicable local law, rule and/or practice are irreversible and not
subject to any security interest, levy or other encumbrance, and which are
specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf of
any Fund which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Fund shall be insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Fund, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises in the separate
account of a Fund for some other reason, including, without limitation, because
of a reversal of a conditional credit or the purchase of any currency, or if the
Fund is for any other reason indebted to Custodian with respect to a Fund,
including any indebtedness to The Bank of New York under the Fund's Cash
Management and Related Services Agreement, if any (except a borrowing for
investment or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of Section 2 of
this Article), such overdraft or indebtedness shall be deemed to be a loan made
by Custodian to the Fund payable on demand and shall bear interest from the date
incurred at a rate per annum ordinarily charged by Custodian to its
institutional customers, as such rate may be adjusted from time to time. In
addition, the Fund hereby agrees that Custodian shall to the maximum extent
permitted by law have a continuing lien, security interest, and security
entitlement in and to any property, including, without limitation, any
investment property or any financial asset, of such Fund at any time held by
Custodian for the benefit of such Fund or in which such Fund may have an
interest which is then in Custodian's possession or control or in possession or
control of any third party acting in Custodian's behalf. The Fund authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Funds' credit on Custodian's books, provided that Custodian
shall promptly notify the Fund of any such charges.
-9-
2. If the Fund borrows money from any bank (including Custodian if the
borrowing is pursuant to a separate agreement) or from any other person (as may
be permitted by an SEC exemptive order), for investment or for temporary or
emergency purposes using Securities held by Custodian hereunder as collateral
for such borrowings, the Fund shall deliver to Custodian a Certificate
specifying with respect to each such borrowing: (a) the Series to which such
borrowing relates; (b) the name of the bank, (c) the amount of the borrowing,
(d) the time and date, if known, on which the loan is to be entered into, (e)
the total amount payable to the Fund on the borrowing date, (f) the Securities
to be delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount of any particular
Securities, and (g) a statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such loan is in
conformance with the '40 Act and the Fund's prospectus. Custodian shall deliver
on the borrowing date specified in a Certificate the specified collateral
against payment by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or loan
agreement. Custodian shall deliver such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this Section. The Fund shall cause all Securities released from
collateral status to be returned directly to Custodian, and Custodian shall
receive from time to time such return of collateral as may be tendered to it. In
the event that the Fund fails to specify in a Certificate the Series, the name
of the issuer, the title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by Custodian, Custodian
shall not be under any obligation to deliver any Securities.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund ("Shares") it
shall deliver to Custodian a Certificate or Instructions specifying the amount
of money and/or Securities to be received by Custodian for the sale of such
Shares and specifically allocated to an Account for such Fund.
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Fund for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian to
make payment out of the money held by Custodian hereunder in connection with a
redemption of any Shares, it shall furnish to Custodian a Certificate or
Instructions specifying the total amount to be paid for such Shares. Custodian
shall make payment of such total amount to the transfer agent specified in such
Certificate or Instructions out of the money held in an Account of the
appropriate Fund.
4. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, Custodian, unless
otherwise instructed by a Certificate or Instructions, shall, upon presentment
of such check, charge the amount thereof against the money
-10-
held in the Account of the Fund of the Shares being redeemed, provided, that if
the Fund or its agent timely advises Custodian that such check is not to be
honored, Custodian shall return such check unpaid.
ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution on
Shares it shall furnish to Custodian Instructions or a Certificate setting forth
with respect to the Fund specified therein the date of the declaration of such
dividend or distribution, the total amount payable, and the payment date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the account of such Fund the total
amount payable to the dividend agent of the Fund specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall not
be liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories, or, except to the extent such
action or inaction is a direct result of the Custodian's failure to fulfill its
duties hereunder, of any Foreign Depositories. With respect to any Losses
incurred by the Fund as a result of the acts or any failures to act by any
Subcustodian (other than a BNY Affiliate), Custodian shall take appropriate
action to recover such Losses from such Subcustodian; and Custodian's sole
responsibility and liability to the Fund shall be limited to amounts so received
from such Subcustodian (exclusive of costs and expenses incurred by Custodian).
In no event shall Custodian be liable to the Fund or any third party for
special, indirect or consequential damages, or lost profits or loss of business,
arising in connection with this Agreement, nor shall BNY or any Subcustodian be
liable: (i) for acting in accordance with any Certificate or Oral Instructions
actually received by Custodian and reasonably believed by Custodian to be given
by an Authorized Person; (ii) for acting in accordance with Instructions without
reviewing the same; (iii) for conclusively presuming that all Instructions are
given only by person(s) duly authorized; (iv) for conclusively presuming that
all disbursements of cash directed by the Fund, whether by a Certificate, an
Oral Instruction, or an Instruction, are in accordance with Section 2(i) of
Article II hereof; (v) for holding property in any particular country,
including, but not limited to, Losses resulting from nationalization,
expropriation or other governmental actions; regulation of the banking or
securities industry; exchange or currency controls or restrictions, devaluations
or fluctuations; availability of cash or Securities or market conditions which
prevent the transfer of property or execution of Securities transactions or
affect the value of property; (vi) for any Losses due to forces beyond the
control of Custodian, including without limitation strikes, work stoppages, acts
of war or terrorism, insurrection, revolution, nuclear or natural catastrophes
or acts of God, or interruptions, loss or malfunctions of utilities,
communications or computer (software and
-11-
hardware) services; (vii) for the insolvency of any Subcustodian (other than a
BNY Affiliate), any Depository, or, except to the extent such action or inaction
is a direct result of the Custodian's failure to fulfill its duties hereunder,
any Foreign Depository; or (viii) for any Losses arising from the applicability
of any law or regulation now or hereafter in effect, or from the occurrence of
any event, including, without limitation, implementation or adoption of any
rules or procedures of a Foreign Depository, which may affect, limit, prevent or
impose costs or burdens on, the transferability, convertibility, or availability
of any currency or Composite Currency Unit in any country or on the transfer of
any Securities, and in no event shall Custodian be obligated to substitute
another currency for a currency (including a currency that is a component of a
Composite Currency Unit) whose transferability, convertibility or availability
has been affected, limited, or prevented by such law, regulation or event, and
to the extent that any such law, regulation or event imposes a cost or charge
upon Custodian in relation to the transferability, convertibility, or
availability of any cash currency or Composite Currency Unit, such cost or
charge shall be for the account of the Fund, and Custodian may treat any account
denominated in an affected currency as a group of separate accounts denominated
in the relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms and conditions
as it deems necessary or appropriate to perform its services hereunder. No such
subcontract, agreement or understanding shall discharge Custodian from its
obligations hereunder or result in any additional costs to a Fund except as
otherwise provided in the Fee Schedule between the Funds and the Custodian.
(c) The Fund agrees to indemnify Custodian and hold Custodian harmless
from and against any and all Losses sustained or incurred by or asserted against
Custodian by reason of or as a result of any action or inaction, or arising out
of Custodian's performance hereunder, including reasonable fees and expenses of
counsel incurred by Custodian in a successful defense of claims by the Fund;
provided however, that the Fund shall not indemnify Custodian for those Losses
arising out of Custodian's own negligence or willful misconduct. This indemnity
shall be a continuing obligation of the Fund, its successors and assigns,
notwithstanding the termination of this Agreement.
2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a result of
the receipt or acceptance of fraudulent, forged or invalid Securities, or
Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(c) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
-12-
(d) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor shall
Custodian be under any duty or obligation to see to it that any cash or
collateral delivered to it by a broker, dealer or financial institution or held
by it at any time as a result of such loan of portfolio Securities is adequate
security for the Fund against any loss it might sustain as a result of such
loan, which duty or obligation shall be the sole responsibility of the Fund. In
addition, Custodian shall be under no duty or obligation to see that any broker,
dealer or financial institution to which portfolio Securities of the Fund are
lent makes payment to it of any dividends or interest which are payable to or
for the account of the Fund during the period of such loan or at the termination
of such loan, provided, however that Custodian shall promptly notify the Fund in
the event that such dividends or interest are not paid and received when due;
(g) The sufficiency or value of any amounts of money and/or Securities
held in any Special Account in connection with transactions by the Fund; whether
any broker, dealer, futures commission merchant or clearing member makes payment
to the Fund of any variation margin payment or similar payment which the Fund
may be entitled to receive from such broker, dealer, futures commission merchant
or clearing member, or whether any payment received by Custodian from any
broker, dealer, futures commission merchant or clearing member is the amount the
Fund is entitled to receive, or to notify the Fund of Custodian's receipt or
non-receipt of any such payment; or
(h) Whether any Securities at any time delivered to, or held by it or
by any Subcustodian, for the account of the Fund and specifically allocated to a
Fund are such as properly may be held by the Fund or such Fund under the
provisions of its then current prospectus and statement of additional
information, or to ascertain whether any transactions by the Fund, whether or
not involving Custodian, are such transactions as may properly be engaged in by
the Fund.
3. Custodian may, with respect to questions of law specifically regarding
an Account, obtain the advice of counsel and shall be fully protected with
respect to anything done or omitted by it in good faith in conformity with such
advice.
4. Custodian shall be under no obligation to take action to collect any
amount payable on Securities in default, or if payment is refused after due
demand and presentment.
5. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any transactions
affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with
-13-
the conversion of the Fund's Securities hereunder and the transfer of Securities
and records kept in connection with this Agreement. The Fund shall also
reimburse Custodian for out-of-pocket expenses which are a normal incident of
the services provided hereunder.
7. Custodian has the right to debit any cash account for any amount payable
by the Fund in connection with any and all obligations of the Fund to Custodian.
In addition to the rights of Custodian under applicable law and other
agreements, at any time when the Fund shall not have honored any of its
obligations to Custodian, Custodian shall have the right without notice to the
Fund to retain or set-off, against such obligations of the Fund, any Securities
or cash Custodian or a BNY Affiliate may directly or indirectly hold for the
account of the Fund, and any obligations (whether matured or unmatured) that
Custodian or a BNY Affiliate may have to the Fund in any currency or Composite
Currency Unit. Any such asset of, or obligation to, the Fund may be transferred
to Custodian and any BNY Affiliate in order to effect the above rights.
8. The Fund agrees to forward to Custodian a Certificate or Instructions
confirming Oral Instructions by the close of business of the same day that such
Oral Instructions are given to Custodian. The Fund agrees that the fact that
such confirming Certificate or Instructions are not received or that a contrary
Certificate or contrary Instructions are received by Custodian shall in no way
affect the validity or enforceability of transactions authorized by such Oral
Instructions and effected by Custodian. If the Fund elects to transmit
Instructions through an on-line communications system offered by Custodian, the
Fund's use thereof shall be subject to the Terms and Conditions attached as
Appendix I hereto, and Custodian shall provide user and authorization codes,
passwords and authentication keys only to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person.
9. The books and records pertaining to the Fund which are in possession of
Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the '40 Act and the rules thereunder. The
Fund, or its authorized representatives, shall have access to such books and
records during Custodian's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Custodian to
the Fund or its authorized representative. Upon the reasonable request of the
Fund, Custodian shall provide in hard copy or on computer disc any records
included in any such delivery which are maintained by Custodian on a computer
disc, or are similarly maintained.
10. Custodian agrees that all non-public books, records and information
prepared or maintained by it in connection with its performance of services
under this Agreement shall remain confidential and shall not be voluntarily
disclosed to any other person, entity or organization, except Custodian may
disclose the same to its examiners, regulators, and its internal and external
accountants, auditors and counsel, and to any other person, entity or
organization if the Custodian is advised by its counsel that it could be liable
for a failure to do so. In the event of any demand served on or received by
Custodian for the production or release of any non-public books, records or
information, Custodian shall endeavor where circumstances permit promptly to
notify the Fund of such demand or request and to seek permission from the Fund.
-14-
11. It is understood that Custodian is authorized to supply any information
regarding the Accounts which is required by any law, regulation or rule now or
hereafter in effect. The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal accounting control of a
Depository, and with such reports on its own system of internal accounting
control as the Fund may reasonably request from time to time.
12. Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the board of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits. In the event such notice is given by Custodian, the Fund shall, on or
before the termination date, deliver to Custodian a copy of a resolution of the
board of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to the
successor custodian all Securities and money then owned by the Fund and held by
it as Custodian, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or Custodian in
accordance with the preceding Section, the Fund shall upon the date specified in
the notice of termination of this Agreement and upon the delivery by Custodian
of all Securities (other than Securities which cannot be delivered to the Fund)
and money then owned by the Fund be deemed to be its own custodian and Custodian
shall thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities which cannot be
delivered to the Fund to hold such Securities hereunder in accordance with this
Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of Authorized
Persons in the event of any change in the then present Authorized Persons. Until
such new Certificate is received, Custodian shall be fully protected in acting
upon Certificates or Oral Instructions of such present Authorized Persons.
-15-
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and received by it at its offices at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxx 00000, or at such other place as the Fund may from time to time
designate in writing.
4. Each and every right granted to either party hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
by either party of any right preclude any other or future exercise thereof or
the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. This Agreement
shall extend to and shall be binding upon the parties hereto, and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. The Fund hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby irrevocably waives any and all rights
to trial by jury in any legal proceeding arising out of or relating to this
Agreement.
7. Nothing combined in this Agreement shall affect the terms and conditions
of that certain Foreign Custody Manager Agreement between The Bank of New York
and the Fund of each date.
8. Custodian shall annually provide to the Fund its FAS 70 Report.
9. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
-16-
10. All references herein to the "Fund" are to each of the Funds listed on
the attached Schedule A individually, as if this Agreement were between such
individual Fund and the Custodian. Without limiting the generality of the
foregoing, no Fund or series of a Fund shall be liable for any obligations of
any other Fund or series, as applicable.
11. With respect to each Fund listed on Schedule A that is a Massachusetts
business trust, all persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Directors/Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Fund.
12. This Agreement contains the full and complete understanding between the
parties with respect to the transactions covered and contemplated hereunder, and
supersedes all prior agreements or understandings between the parties relating
to the subject matter hereof, whether oral or written, express or implied.
13. The Custodian agrees to provide to the Fund such certifications with
respect to the Xxxxxxxx-Xxxxx Act of 2002, as Custodian generally provides to
its mutual fund custodial customers.
-17-
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the day
and year first above written.
EACH FUND LISTED ON SCHEDULE A
HERETO
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Vice President
Tax Identification No:
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
--------------------------
Title: Vice President
-18-
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and acting
of each Fund listed on Schedule A hereto (each a "Fund"), and
---------------
further certifies that the following officers or employees of the Fund have been
duly authorized in conformity with the Fund's Declaration of Trust and By-Laws
to deliver Certificates and Oral Instructions to The Bank of New York
("Custodian") pursuant to the Custody Agreement between the Fund and Custodian
dated , and that the signatures appearing opposite their names are
-----------
true and correct:
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
-------------------------- ------------------------ ------------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you may
currently have on file.
[seal] By:
-------------------------------
Title:
Date:
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. License; Use. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person of the Fund of
software enabling the Fund to obtain access to the System (the "Software"),
Custodian grants to the Fund a personal, nontransferable and nonexclusive
license to use the Software solely for the purpose of transmitting Written
Instructions, receiving reports, making inquiries or otherwise communicating
with Custodian in connection with the Account(s). The Fund shall use the
Software solely for its own internal and proper business purposes and not in
the operation of a service bureau. Except as set forth herein, no license or
right of any kind is granted to the Fund with respect to the Software. The Fund
acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Software, including any trade secrets or
other ideas, concepts, know-how, methodologies, or information incorporated
therein and the exclusive rights to any copyrights, trademarks and patents
(including registrations and applications for registration of either), or other
statutory or legal protections available in respect thereof. The Fund further
acknowledges that all or a part of the Software may be copyrighted or
trademarked (or a registration or claim made therefor) by Custodian or its
suppliers. The Fund shall not take any action with respect to the Software
inconsistent with the foregoing acknowledgments, nor shall the Fund attempt to
decompile, reverse engineer or modify the Software. The Fund may not copy, sell,
lease or provide, directly or indirectly, any of the Software or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory copyright notice or other notice included
in the Software or on any media containing the Software. The Fund shall
reproduce any such notice on any reproduction of the Software and shall add any
statutory copyright notice or other notice to the Software or media upon
Custodian's request.
2. Equipment. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. Proprietary Information. The Software, any data base and any proprietary
data, processes, information and documentation made available to the Fund (other
than which are or become part of the public domain or are legally required to be
made available to the public) (collectively, the "Information"), are the
exclusive and confidential property of Custodian or its suppliers. The Fund
shall keep the Information
confidential by using the same care and discretion that the Fund uses with
respect to its own confidential property and trade secrets, but not less than
reasonable care. Upon termination of the Agreement or the Software license
granted herein for any reason, the Fund shall return to Custodian any and all
copies of the Information which are in its possession or under its control.
4. Modifications. Custodian reserves the right to modify the Software from
time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and whether
with or without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND
SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE,
SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE
PROVIDED "AS IS." OTHER THAN AS PROVIDED SECTION 5.1 BELOW, IN NO EVENT SHALL
EITHER PARTY OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT
SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY INCUR IN CONNECTION WITH THE
SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF SUCH PARTY OR SUCH SUPPLIER HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY
SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR
MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES, LABOR
DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE
CONTROL.
5.1 (a) Custodian shall defend the Fund, and pay any damages finally
awarded by a court of competent jurisdiction, in any action or proceeding
commenced by a third party against the Fund based on a claim that the Software
or Services infringe upon a United States patent, copyright, or trade secret,
provided that the Fund (i) notifies Custodian promptly of any such action or
claim, (ii) grants Custodian full and exclusive authority to defend, compromise
or settle such claim or action, and (iii) provides Custodian all assistance
reasonably necessary to so defend, compromise or settle. The foregoing
obligations shall not apply, however, to any claim or action arising from (i)
the Fund's use of the Software or Services in a manner not authorized by this
Agreement, (ii) the Fund's use of the Software or Services in combination with
other software or services not supplied by the Bank or (iii) the Fund's use of a
superseded version of the Software after a current version has been made
available to the Fund.
(b) In the event that the Software or Services are found to infringe
upon a patent, copyright, trade secret, or other proprietary right, or in
Custodian's opinion the Software or Services are likely to be found to so
infringe, Custodian may, at its sole option, (i) procure for the Fund the right
to continue using the Software or Services, (ii) replace the Software or
Services with software or services that are non-infringing, or (iii) terminate
this Agreement and refund to the Fund any pre-paid charges relating to the
Software or Services.
(c) THIS SECTION 5.1 STATES THE CUSTODIAN'S SOLE OBLIGATION, AND THE
FUND'S SOLE REMEDY, WITH RESPECT TO ANY CLAIM OF INFRINGEMENT BY THE SOFTWARE OR
SERVICES.
6. Security; Reliance; Unauthorized Use. The Fund will cause all persons
utilizing the Software and System to treat all applicable user and authorization
codes, passwords and authentication keys with extreme care, and it will
establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions.
Custodian agrees that the Fund's investment advisor shall be entitled to use,
install and/or access the Software for the benefit of the Fund, provided such
investment advisor agrees in an executed writing delivered to Custodian to be
bound by the terms of this Appendix. Custodian is hereby irrevocably authorized
to act in accordance with and rely on Instructions received by it through the
System. The Fund acknowledges that it is its sole responsibility to assure that
only persons duly authorized use the System and that Custodian shall not be
responsible nor liable for any unauthorized use thereof.
7. System Acknowledgments. Custodian shall acknowledge through the System
its receipt of each transmission communicated through the System, and in the
absence of such acknowledgment Custodian shall not be liable for any failure to
act in accordance with such transmission and the Fund may not claim that such
transmission was received by Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may not be
available for every communication through the System, or for all data. The Fund
agrees that Custodian may deactivate any encryption features at any time,
without notice or liability to the Fund, for the purpose of maintaining,
repairing or troubleshooting the System or the Software.
SCHEDULE A
Strategic Partners Style Specific Funds
Strategic Partners Large Capitalization Growth Fund
Strategic Partners Large Capitalization Value Fund
Strategic Partners Small Capitalization Value Fund
Strategic Partners Small Capitalization Growth Fund
Strategic Partners Total Return Fund
Strategic Partners International Equity Fund
Strategic Partners Opportunity Funds
Strategic Partners Mid Cap Value Fund
Strategic Partners Focused Growth Fund
Strategic Partners Focused Value Fund
Strategic Partners New Era Growth Fund
Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Growth Fund
Strategic Partners High Growth Fund
Strategic Partners Conservative Growth Fund
SCHEDULE A (continued)
The Target Portfolio Trust
Large Capitalization Growth Portfolio
Large Capitalization Value Portfolio
Small Capitalization Growth Portfolio
Small Capitalization Value Portfolio
International Equity Portfolio
International Bond Portfolio
Total Return Bond Portfolio
Intermediate-Term Bond Portfolio
Mortgage-Backed Securities Portfolio
U.S. Government Money Market Portfolio
The High Yield Plus Fund, Inc.
AMENDMENT TO CUSTODIAN SERVICES AGREEMENT
This Amendment, dated the 12th day of May, 1999, is entered into between
AMERICAN SKANDIA ADVISOR FUNDS, INC., a Maryland corporation (the "Fund") and
PFPC TRUST COMPANY, (successor to PNC Bank, N.A.) ("PFPC Trust").
WHEREAS, the Fund and PFPC Trust have entered into a Custodian Services
Agreement dated as of June 1,1997 as the same may be amended from time to time
(the "Agreement"), pursuant to which the Fund appointed PFPC Trust to act as
custodian for its investment portfolios; and
WHEREAS, the Fund and PFPC Trust now wish to amend the Agreement as it
relates to Written Instructions; and
WHEREAS, the Fund's Board of Directors has approved or will ratify this
Amendment;
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Defined Terms. From and after the date hereof, the following term as
used in the Agreement shall be amended and restated in its entirety as follows:
"Written Instructions". The term "Written Instructions" shall mean (i)
written instructions signed by two Authorized Persons and received by
PFPC Trust or (ii) trade instructions transmitted by means of an
electronic transaction reporting system access to which requires the
use of a password or other authorized identifier. The instructions may
be delivered electronically or by hand, mail, tested telegram, cable,
telex or facsimile sending device.
2. Miscellaneous. Except to the extent amended and supplemented hereby, the
Agreement shall remain unchanged and in full force and effect and is hereby
ratified, confirmed and approved in all respects as amended and supplemented
hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date and year first above written.
AMERICAN SKANDIA ADVISOR FUNDS, INC.
By: /s/ Illegible
--------------------------------
Title: Treasurer
PFPC TRUST COMPANY
By: /s/ Illegible
--------------------------------
Title: Sr. V. P.
AMENDMENT TO CUSTODIAN SERVICES AGREEMENT
This Amendment, dated the 10th day of April, 1998, is entered into between
AMERICAN SKANDIA ADVISER FUNDS, INC., a Maryland corporation (the "Fund") and
PNC BANK, N.A., a national banking association ("PNC Bank").
WHEREAS, the Fund and PNC Bank have entered into a Custodian Services
Agreement dated as of June 1,1997 (the "Agreement"), pursuant to which the Fund
appointed PNC Bank to act as custodian for its investment portfolios; and
WHEREAS, the Fund and PNC Bank now wish to amend the Agreement as it
relates to Authorized Persons; and
WHEREAS, the Fund's Board of Directors has approved this Amendment;
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Defined Terms. From and after the date hereof, the following term as
used in the Agreement shall be amended and restated in its entirety as follows:
"Authorized Person" means any officer of the Fund and any other person
authorized by an officer of the Fund to give Oral Instructions and
Written Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto and made a part hereof or
any amendment thereto as may be received by PNC Bank. An Authorized
Person's scope of authority may be limited by the Fund by setting
forth such limitation in the Authorized Persons Appendix.
2. Miscellaneous. Except to the extent amended and supplemented hereby, the
Agreement shall remain unchanged and in full force and effect and is hereby
ratified, confirmed and approved in all respects as amended and supplemented
hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date and year first above written.
AMERICAN SKANDIA ADVISOR FUNDS, INC.
By: /s/ Illegible
--------------------------------
Title: Vice President
PNC BANK, N.A.
By: /s/ Xxx Xxxxxxxx, XX
--------------------------------
Title: XXX XXXXXXXX, XX
VICE PRESIDENT
PNC BANK, N.A.
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of June 1,1997 by and between PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC Bank"), and AMERICAN SKANDIA
ADVISOR FUNDS, INC., a Maryland corporation (the "Fund").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PNC Bank to provide custodian services
to its investment portfolios listed on Exhibit A attached hereto and made a
part hereof, as such Exhibit A may be amended from time to time (each a
"Portfolio"), and PNC Bank wishes to furnish domestic custodian services, either
directly or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, In consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As Used in This Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person duly authorized by the Fund's Board of Directors to give Oral
Instructions and Written Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto and made a part hereof or any
amendment thereto as may be received by PNC Bank. An Authorized Person's scope
of authority may be limited by the Fund by setting forth such limitation in the
Authorized Persons Appendix.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system maintained by
an exchange registered with the SEC or otherwise under the 0000 Xxx.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PNC Bank
from an Authorized Person or from a person reasonably believed by PNC Bank to be
an Authorized Person.
(g) "PNC Bank" means PNC Bank, National Association or a subsidiary or
affiliate of PNC Bank, National Association.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(k) "Property" means:
(i) any and all domestic securities and other investment items
which the Fund may from time to time deposit, or cause to be
deposited, with PNC Bank or which PNC Bank may from time to
time hold for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
2
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PNC Bank from time to time, from or on
behalf of the Fund.
(k) "Written Instructions" mean written instructions signed by two
Authorized Persons and received by PNC Bank. The instructions may be delivered
by hand, mail, tested telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PNC Bank to provide domestic
custodian services to the Fund, on behalf of each Portfolio, and PNC Bank
accepts such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PNC Bank with the following:
(a) certified or authenticated copies of the resolutions of the
Fund's Board of Directors, approving the appointment of PNC Bank
or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of each Portfolio's advisory agreement;
(d) a copy of the distribution agreement with respect to each class
of Shares;
(e) a copy of each Portfolio's administration agreement if PNC Bank
is not providing the Portfolio with such services;
(f) copies of any shareholder servicing agreements made in respect of
the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Laws.
3
PNC Bank undertakes to comply with all applicable requirements of the
Securities Laws and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to be performed by PNC Bank
hereunder. Except as specifically set forth herein, PNC Bank assumes no
responsibility for such compliance by the Fund or any Portfolio.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PNC Bank shall act
only upon Oral Instructions and Written Instructions.
(b) PNC Bank shall be entitled to rely upon any Oral Instructions and
Written Instructions it receives from an Authorized Person (or from a person
reasonably believed by PNC Bank to be an Authorized Person) pursuant to this
Agreement. PNC Bank may assume that any Oral Instructions or Written
Instructions received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any vote, resolution or
proceeding of the Fund's Board of Directors or of the Fund's shareholders,
unless and until PNC Bank receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PNC Bank Written Instructions
confirming Oral Instructions (except where such Oral Instructions are given by
PNC Bank or its affiliates) so that PNC Bank receives the Written Instructions
as promptly as practicable and in any event by the close of business on the day
after such Oral Instructions are received. The fact that such confirming Written
Instructions are not received by PNC Bank or differ from the Oral Instructions
shall in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions. Where Oral Instructions or
Written Instructions reasonably appear to have been
4
received from an Authorized Person, PNC Bank shall incur no liability to the
Fund in acting upon such Oral Instructions or Written Instructions provided that
PNC Bank's actions comply with the other provisions of this Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PNC Bank is in doubt as to any action it
should or should not take, PNC Bank may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any
question of law pertaining to any action it should or should not take, PNC Bank
may request advice at its own cost from such counsel of its own choosing (who
may be counsel for the Fund, the Fund's investment adviser or PNC Bank, at the
option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PNC Bank receives from the
Fund, and the advice it receives from counsel, PNC Bank shall be entitled to
rely upon and follow the advice of counsel.
(d) Protection of PNC Bank. PNC Bank shall be protected in any action
it takes or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions it receives from the Fund or from counsel
and which PNC Bank believes, in good faith, to be consistent with those
directions, advice or Oral Instructions or Written Instructions. Nothing in this
section shall be construed so as to impose an obligation upon PNC Bank (i) to
seek such direction, advice or Oral Instructions or Written Instructions, or
(ii) to act in accordance with such directions, advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions of this
5
Agreement, the same is a condition of PNC Bank's properly taking or not taking
such action. Nothing in this subsection shall excuse PNC Bank when an action or
omission on the part of PNC Bank constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard by PNC Bank of any duties, obligations or
responsibilities set forth in this Agreement.
7. Records: Visits. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PNC Bank, shall
be the property of the Fund. Such books and records shall be surrendered to the
Fund or an authorized representative of the Fund promptly upon request, at the
Fund's expense. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The Fund and Authorized Persons shall have access to such books and
records at all times during PNC Bank's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by PNC Bank to the Fund or to an authorized representative of the Fund,
at the Fund's expense.
8. Confidentiality. PNC Bank agrees to keep confidential all records of the
Fund and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in writing,
by the Fund. The Fund agrees that such consent shall not be unreasonably
withheld and may not be withheld where PNC Bank may be exposed to civil or
criminal contempt proceedings or when required to divulge such information or
records to duly constituted authorities.
9. Cooperation with Accountants. PNC Bank shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in the
performance of its obligations under
6
this Agreement to ensure that the necessary information is made available to
such accountants for the expression of their opinion, as required by the Fund.
10. Disaster Recovery. PNC Bank shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PNC Bank shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PNC Bank shall have no liability with respect to
the loss of data or service interruptions caused by equipment failure provided
such loss or interruption is not caused by PNC Bank's own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties or obligations
under this Agreement.
11. Compensation. As compensation for custody services rendered by PNC Bank
during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PNC Bank a fee or fees as may be agreed to in writing
from time to time by the Fund and PNC Bank.
12. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PNC Bank and its affiliates from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws, and amendments thereto), and expenses, including
(without limitation) attorneys' fees and disbursements, arising directly or
indirectly from any action or omission to act which PNC Bank takes (i) at the
request or on the direction of or in reliance on the advice of the Fund or (ii)
upon Oral Instructions or Written Instructions. Neither PNC Bank, nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such liability)
7
arising out of PNC Bank's or its affiliates' own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties under this Agreement. Any
amounts payable by the Fund hereunder shall be satisfied only against the
relevant Portfolio's assets and not against the assets of any other investment
portfolio of the Fund.
13. Responsibility of PNC Bank.
(a) PNC Bank shall be under no duty to take any action on behalf of
the Fund or any Portfolio except as specifically set forth herein or as may be
specifically agreed to by PNC Bank in writing. PNC Bank shall be obligated to
exercise care and diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. PNC Bank shall be liable
for any damages arising out of PNC Bank's failure to perform its duties under
this agreement to the extent such damages arise out of PNC Bank's willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties
under this Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PNC Bank shall not be under any duty or
obligation to inquire into and shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement, and which PNC Bank reasonably believes to be
genuine; or (B) subject to section 10, delays or errors or loss of data
occurring by reason of circumstances beyond PNC Bank's control, including acts
of civil or military authority, national emergencies, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
8
(c) Notwithstanding anything in this Agreement to the contrary,
neither PNC Bank nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages which the
Fund may incur or suffer by or as a consequence of PNC Bank's or its affiliates'
performance of the services provided hereunder, whether or not the likelihood of
such losses or damages was known by PNC Bank or its affiliates.
14. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PNC Bank, all the Property owned by the Portfolios, including cash
received as a result of the distribution of Shares, during the period that is
set forth in this Agreement. PNC Bank will not be responsible for any assets
until actual receipt.
(b) Receipt and Disbursement of Money. PNC Bank, acting upon Written
Instructions, shall open and maintain separate accounts in the Fund's name using
all cash received from or for the account of the Fund, subject to the terms of
this Agreement. In addition, upon Written Instructions, PNC Bank shall open
separate custodial accounts for each separate Portfolio of the Fund
(collectively, the "Accounts") and shall hold in the Accounts all cash received
from or for the Accounts of the Fund specifically designated to each separate
Portfolio.
PNC Bank shall make cash payments from or for the Accounts of a Portfolio
only for:
(i) purchases of domestic securities in the name of a Portfolio or
PNC Bank or PNC Bank's nominee as provided in sub-section (j) and
for which PNC Bank has received a copy of the broker's or
dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PNC
Bank;
9
(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management
fees or similar expenses which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, an amount
equal to the amount of dividends and distributions stated in the
Written Instructions to be distributed in cash by the transfer
agent to shareholders, or, in lieu of paying the Fund's transfer
agent, PNC Bank may arrange for the direct payment of cash
dividends and distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by and among
the Fund, PNC Bank and the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of domestic securities
owned or subscribed to by the Fund and held by or delivered to
PNC Bank;
(vi) payments of the amounts of dividends received with respect to
domestic securities sold short;
(vii) payments made to a sub-custodian pursuant to the provisions in
sub-section (c) of this Section; and
(viii) payments, upon Written Instructions, made for other proper Fund
purposes.
PNC Bank is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received as custodian for the Accounts.
(c) Receipt of Securities: Subcustodians.
(i) PNC Bank shall hold all securities received by it for the
Accounts in a separate account that physically segregates
such securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry
System. All such securities shall be held or disposed of
only upon Written Instructions of the Fund pursuant to the
terms of this Agreement. PNC Bank shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except upon
the express terms of this Agreement and upon Written
Instructions, accompanied by a certified resolution of the
Fund's Board of Directors, authorizing the
10
transaction. In no case may any member of the Fund's Board
of Directors, or any officer, employee or agent of the Fund
withdraw any securities.
At PNC Bank's own expense and for its own convenience, PNC
Bank may enter into sub-custodian agreements with other
United States banks or trust companies to perform duties
described in this sub-section (c). Such bank or trust
company shall have an aggregate capital, surplus and
undivided profits, according to its last published report,
of at least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PNC Bank, or at least twenty
million dollars ($20,000,000) if such bank or trust company
is not a subsidiary or affiliate of PNC Bank. In addition,
such bank or trust company must be qualified to act as
custodian and agree to comply with the relevant provisions
of the 1940 Act and other applicable rules and regulations.
Any such arrangement will not be entered into without prior
written notice to the Fund.
PNC Bank shall remain responsible for the performance of all
of its duties as described in this Agreement and shall hold
the Fund and each Portfolio harmless from its own acts or
omissions, under the standards of care provided for herein,
or the acts and omissions of any sub-custodian chosen by
PNC Bank under the terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PNC Bank, directly or
through the use of the Book-Entry System, shall:
(i) deliver any domestic securities held for a Portfolio against the
receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated in such
Oral Instructions or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the authority
of a Portfolio as owner of any domestic securities may be
exercised;
(iii) deliver any domestic securities 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
ll
delivered to PNC Bank;
(iv) deliver any domestic securities held for a Portfolio against
receipt of other domestic securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing,
tender offer, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(v) deliver any domestic securities held for a Portfolio to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such
delivery;
(vi) make such transfer or exchanges of the assets of the Portfolios
and take such other steps as shall be stated in said Oral
Instructions or Written Instructions to be for the purpose of
effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Fund;
(vii) release domestic securities belonging to a Portfolio to any bank
or trust company for the purpose of a pledge or hypothecation to
secure any loan incurred by the Fund on behalf of that
Portfolio; provided, however, that such securities shall be
released only upon payment to PNC Bank of the monies borrowed,
except that in cases where additional collateral is required to
secure a borrowing already made subject to proper prior
authorization, further such securities may be released for that
purpose; and repay such loan upon redelivery to it of the
domestic securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing the loan;
(viii) release and deliver domestic securities owned by a Portfolio in
connection with any repurchase agreement entered into on behalf
of the Fund, but only on receipt of payment therefor; and pay out
moneys of the Fund in connection with such repurchase agreements,
but only upon the delivery of such securities;
(ix) release and deliver or exchange domestic securities owned by the
Fund in connection with any conversion of such domestic
securities, pursuant to their terms, into other domestic
securities;
(x) release and deliver domestic securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon delivery
thereof to PNC Bank;
12
and
(xi) release and deliver or exchange domestic securities owned by the
Fund for other corporate purposes.
PNC Bank must also receive a certified resolution describing the
nature of the corporate purpose and the name and address of the
person(s) to whom delivery shall be made when such action is
pursuant to sub-paragraph d.
(e) Use of Book-Entry System. The Fund shall deliver to PNC Bank
certified resolutions of the Fund's Board of Directors approving, authorizing
and instructing PNC Bank on a continuous basis, to deposit in the Book-Entry
System all domestic securities belonging to the Portfolios eligible for deposit
therein and to utilize the Book-Entry System to the extent possible in
connection with settlements of purchases and sales of domestic securities by the
Portfolios, and deliveries and returns of domestic securities loaned, subject
to repurchase agreements or used as collateral in connection with borrowings.
PNC Bank shall continue to perform such duties until it receives Written
Instructions or Oral Instructions authorizing contrary actions.
PNC Bank shall administer the Book-Entry System as follows:
(i) With respect to domestic securities of each Portfolio which are
maintained in the Book-Entry System, the records of PNC Bank
shall identify by Book-Entry or otherwise those domestic
securities belonging to each Portfolio. PNC Bank shall furnish to
the Fund a detailed statement of the Property held for each
Portfolio under this Agreement at least monthly and from time to
time and upon written request.
(ii) Domestic securities and any cash of each Portfolio deposited in
the Book-Entry System will at all times be segregated from any
assets and cash controlled by PNC Bank in other than a fiduciary
or custodian capacity but may be commingled with other assets
held in such capacities. PNC Bank and its sub-custodian, if any,
will pay out money only upon receipt of domestic securities and
will deliver domestic securities only upon the receipt of money.
13
(iii) All books and records maintained by PNC Bank which relate to the
Fund's participation in the Book-Entry System will at all times
during PNC Bank's regular business hours be open to the
inspection of Authorized Persons, and PNC Bank will furnish to
the Fund all information in respect of the services rendered as
it may require.
PNC Bank will also provide the Fund with such reports on its own system of
internal control as the Fund may reasonably request from time to time.
(f) Registration of Domestic securities. All domestic securities held
for a Portfolio which are issued or issuable only in bearer form, except such
domestic securities held in the Book-Entry System, shall be held by PNC Bank in
bearer form; all other domestic securities held for a Portfolio may be
registered in the name of the Fund on behalf of that Portfolio, PNC Bank, the
Book-Entry System, a sub-custodian, or any duly appointed nominees of the Fund,
PNC Bank, Book-Entry System or sub-custodian. The Fund reserves the right to
instruct PNC Bank as to the method of registration and safekeeping of the
domestic securities of the Fund. The Fund agrees to furnish to PNC Bank
appropriate instruments to enable PNC Bank to hold or deliver in proper form for
transfer, or to register in the name of its nominee or in the name of the
Book-Entry System, any domestic securities which it may hold for the Accounts
and which may from time to time be registered in the name of the Fund on behalf
of a Portfolio.
(g) Voting and Other Action. Neither PNC Bank nor its nominee shall
vote any of the domestic securities held pursuant to this Agreement by or for
the account of a Portfolio, except in accordance with Written Instructions. PNC
Bank, directly or through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies and proxy soliciting materials
to the registered holder of such domestic securities. If the registered holder
is not the Fund
14
on behalf of a Portfolio, then Written Instructions or Oral Instructions must
designate the person who owns such domestic securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PNC Bank is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each Portfolio,
all income, dividends, distributions, coupons, option
premiums, other payments and similar items, included or
to be included in the Property, and, in addition,
promptly advise each Portfolio of such receipt and
credit such income, as collected, to each Portfolio's
custodian account;
(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment
of money;
(C) receive and hold for the account of each Portfolio all
domestic securities received as a distribution on the
Portfolio's domestic securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement
or distribution of rights or similar domestic
securities issued with respect to any domestic
securities belonging to a Portfolio and held by PNC
Bank hereunder;
(D) present for payment and collect the amount payable upon
all securities held hereunder which may mature or be
called, redeemed, or retired, or otherwise become
payable on the date such securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
15
(A) PNC Bank is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of a Portfolio in accordance with
street delivery custom;
(2) for the exchange of interim receipts or temporary
domestic securities for definitive domestic
securities; and
(3) for transfer of domestic securities into the name
of the Fund on behalf of a Portfolio or PNC Bank
or nominee of either, or for exchange of domestic
securities for a different number of bonds,
certificates, or other evidence, representing the
same aggregate face amount or number of units
bearing the same interest rate, maturity date and
call provisions, if any; provided that, in any
such case, the new domestic securities are to be
delivered to PNC Bank.
(B) Unless and until PNC Bank receives Oral Instructions or
Written Instructions to the contrary, PNC Bank shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of each Portfolio;
(2) collect interest and cash dividends received on
Property, with notice to the Fund, to the account
of each Portfolio;
16
(3) hold for the account of each Portfolio all stock
dividends, rights and similar domestic securities
issued with respect to any domestic securities
held by PNC Bank; and
(4) execute as agent on behalf of the Fund 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 Fund's name, on
behalf of a Portfolio, on such certificate as the
owner of the domestic securities covered thereby
which are held hereunder, to the extent it may
lawfully do so.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on
its records for and on behalf of each Portfolio. Such
accounts may be used to transfer cash and securities held
hereunder, including securities in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a domestic securities or option
exchange, providing such procedures comply with the
1940 Act and any releases of the SEC relating to the
maintenance of segregated accounts by registered
investment companies; and
(B) Upon receipt of Written Instructions, for other proper
corporate purposes.
(ii) PNC Bank shall arrange for the establishment of XXX
custodian accounts for such shareholders holding Shares
through XXX accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with
such other procedures as are mutually agreed upon from time
to time by and among the Fund, PNC Bank and the Fund's
transfer agent.
(j) Purchases of Domestic Securities. PNC Bank shall settle purchased
domestic
17
securities upon receipt of Oral Instructions or Written Instructions from the
Fund or its investment advisers that specify:
(i) the name of the issuer and the title of the domestic
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker through whom
the purchase was made. PNC Bank shall upon receipt of such
securities purchased by or for a Portfolio pay out of the
moneys held for the account of the Portfolio the total
amount payable to the person from whom or the broker through
whom the purchase was made, provided that the same conforms
to the total amount payable as set forth in such Oral
Instructions or Written Instructions.
(k) Sales of Domestic Securities. PNC Bank shall settle sold
securities held hereunder upon receipt of Oral Instructions or Written
Instructions from the Fund that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
18
(vi) the name of the broker through whom or the person to whom
the sale was made; and
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Portfolio involved.
PNC Bank shall deliver the domestic securities upon receipt of the total
amount payable to the Portfolio upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Subject to the foregoing, PNC Bank may accept payment in such form
as shall be satisfactory to it, and may deliver domestic securities and arrange
for payment in accordance with the customs prevailing among dealers in domestic
securities.
(I) Reports: Proxy Materials.
(i) PNC Bank shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of each Portfolio, listing the
portfolio securities belonging to each Portfolio with
the adjusted average cost of each issue and the market
value at the end of such month and stating the cash
account of each Portfolio including disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4; and
(D) such other information as may be agreed upon from time
to time between the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PNC Bank shall be under no other obligation to
inform the Fund as to such
19
actions or events.
(m) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by PNC Bank) shall be at the sole risk of the Fund. If
payment is not received by PNC Bank within a reasonable time after proper
demands have been made, PNC Bank shall notify the Fund as promptly as reasonably
possible in writing, including copies of all demand letters, any written
responses and memoranda of all oral responses, and shall await instructions from
the Fund. PNC Bank shall not be obliged to take legal action for collection
unless and until reasonably indemnified to its satisfaction. PNC Bank shall also
notify the Fund as soon as reasonably practicable whenever income due on
securities held hereunder is not collected in due course and shall provide the
Fund with periodic status reports of such income collected after a reasonable
time.
15. Duration and Termination. This Agreement shall continue until
terminated by the Fund or by PNC Bank on ninety (90) days' prior written notice
to the other party. In the event this Agreement is terminated (pending
appointment of a successor to PNC Bank or vote of the shareholders of the Fund
to dissolve or to function without a custodian of its cash, domestic securities
or other property), PNC Bank shall not deliver cash, domestic securities or
other property of the Portfolios to the Fund. It may deliver them to a bank or
trust company of PNC Bank's choice, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000), as a custodian for the Fund to be held
under terms substantially the same as those of this Agreement. PNC Bank shall
not be required to make any such delivery or payment until full payment shall
have been made to PNC Bank of all of its fees,
20
compensation, costs and expenses. PNC Bank shall have a security interest in and
shall have a right of setoff against the Property as security for the payment of
such fees, compensation, costs and expenses. To the extent such security
interest and right of setoff relate to a particular Portfolio, the security
interest and right of setoff shall be applied only as to that Portfolio.
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to PNC Bank at
Airport Business Center, International Court 2,200 Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxx 00000, marked for the attention of the Custodian Services
Department (or its successor) (b) if to the Fund, at the address of the Fund or
(c) if to neither of the foregoing, at such other address as shall have been
given by like notice to the sender of any such notice or other communication by
the other party. If notice is sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given five
days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation; Assignment. PNC Bank may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i) PNC Bank gives the
Fund thirty (30) days' prior written notice; (ii) the delegate (or assignee)
agrees with PNC Bank and the Fund to comply with all relevant provi-
21
sions of the 1940 Act; and (iii) PNC Bank and such delegate (or assignee)
promptly provide such information as the Fund may request, and respond to such
questions as the Fund may ask, relative to the delegation (or assignment),
including (without limitation) the capabilities of the delegate (or assignee).
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated duties and Oral Instructions.
(b) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(c) Governing Law. This Agreement shall be deemed to be a contract
made in Pennsylvania and governed by Pennsylvania law, without regard to
principles of conflicts of law.
22
(d) Partial Invalidity. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(e) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such party.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Illegible
--------------------------------
Title: Vice President
AMERICAN SKANDIA ADVISOR FUNDS, INC.
By: /s/ Illegible
--------------------------------
Title: Controller
24
CUSTODY AGREEMENT
This Custody Agreement is dated as of May 29, 1997 between XXXXXX
XXXXXXX TRUST COMPANY, a New York State chartered trust company (the
"Custodian"), and AMERICAN SKANDIA ADVISOR FUNDS, INC., a Maryland corporation
on behalf of each of the Funds listed on Appendix 1, as may be amended from time
to time (the "Client").
1. Appointment and Acceptance; Accounts. (a) The Client hereby
appoints the Custodian as a custodian of Property (as defined below) owned or
under the control of the Client that are delivered to the Custodian, or any
Subcustodian as appointed below, from time to time to be held in custody for the
benefit of the Client. The Custodian agrees to act as such custodian upon the
terms and conditions hereinafter provided.
(b) Prior to the delivery of any Property by the Client to the
Custodian, the Client shall deliver to the Custodian each document and other
item listed in Appendix 2. In addition, the Client shall deliver to the
Custodian any additional documents or items as the Custodian may deem necessary
for the performance of its duties under this Agreement.
(c) The Client instructs the Custodian to establish on the books and
records of the Custodian the accounts listed in Appendix 3 (the "Accounts") in
the name of the Client. Upon receipt of Authorized Instructions (as defined
below) and appropriate documentation, the Custodian shall open additional
Accounts for the Client. Upon the Custodian's confirmation to the Client of the
opening of such additional Accounts, or of the closing of Accounts, Appendix 3
shall be deemed automatically amended or supplemented accordingly. The Custodian
shall record in the Accounts and shall have general responsibility for the
safekeeping of all securities ("Securities"), cash, cash equivalents and other
property (all such Securities, cash, cash equivalents and other property being
collectively the "Property") of the Client that are delivered to the Custodian
for custody.
(d) The procedures the Custodian and the Client will use in performing
activities in connection with this Agreement are set forth in a client services
guide provided to the Client by the Custodian, as such guide may be amended from
time to time by the Custodian by written notice to the Client (the "Client
Services Guide").
2. Subcustodians. The Property may be held in custody and deposit
accounts that have been established by the Custodian with one or more domestic
or foreign banks or other institutions as listed on Exhibit A (the
"Subcustodians"), as such Exhibit may be amended from time to time by the
Custodian by 60 days prior written notice to the Client, or through the
facilities of one or more securities depositories or clearing agencies, as may
be changed by prior written notice forwarded by the Custodian as soon as
reasonably practicable upon the Custodian's receipt and verification of such
change. The Custodian shall hold Property through a Subcustodian, securities
depository or clearing agency only if (a) such Subcustodian and any securities
depository or clearing agency in which such Subcustodian or the Custodian holds
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Property, or any of their creditors, may not assert any right, charge, security
interest, lien, encumbrance or other claim of any kind to the Securities except
a claim of payment for its safe custody or administration and (b) beneficial
ownership of such Property may be freely transferred without the payment of
money or value other than for safe custody or administration. Any Subcustodian
may hold Property in a securities depository and may utilize a clearing agency.
3. Records. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its customers with a
Subcustodian in a single account identified as belonging to the Custodian
for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging to the
Client any Property held by a Subcustodian for the Custodian's account;
(c) The Custodian shall require that Property held by the Subcustodian
for the Custodian's account be identified on the Subcustodian's books as
separate from any other property held by the Subcustodian other than
property of the Custodian's customers held solely for the benefit of
customers of the Custodian; and
(d) In the event the Subcustodian holds Property in a securities
depository or clearing agency, such Subcustodian shall be required by its
agreement with the Custodian to identify on its books such Property as
being held for the account of the Custodian as custodian for its customers
or in such other manner as is required by local law or market practice.
4. Access to Records. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's; affairs. The Custodian shall
also obtain from any Subcustodian (and shall require each Subcustodian to use
reasonable efforts to obtain from any securities depository or clearing agency
in which it deposits Property) an undertaking, to the extent consistent with
local practice and the laws of the jurisdiction or jurisdictions to which such
Subcustodian, securities depository or clearing agency is subject, to permit
independent public accountants such reasonable access to the records of such
Subcustodian, securities depository or clearing agency as may be reasonably
required in connection with the examination of the Client's affairs or to take
such other action as the Custodian in its judgment may deem sufficient to ensure
such reasonable access.
5. Reports. The Custodian shall provide such reports and other
information to the Client and to such persons as the Client directs as the
Custodian and the Client may agree from time to time.
6. Payment of Monies. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
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The Custodian may act as the Client's agent or act as a principal in
foreign exchange transactions at such rates as are agreed from time to time
between the Client and the Custodian.
7. Transfer of Securities. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. Corporate Action. (a) The Custodian shall notify the Client of
details of all corporate actions affecting the Client's Securities promptly upon
its receipt of such information.
(b) The Custodian shall take, or cause any Subcustodian to take, such
corporate action only in accordance with Authorized Instructions or as provided
in this Section 8 or Section 9.
(c) In the event the Client does not provide timely Authorized
Instructions to the Custodian, the Custodian shall act in accordance with the
default option provided by local market practice and/or the issuer of the
Securities.
(d) Fractional shares resulting from corporate action activity shall
be treated in accordance with local market practices.
9. General Authority. In the absence of Authorized Instructions to the
contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to the
Client;
(b) receive and collect all income and principal with respect to
Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely ministerial
(including, without limitation, the exchange of interim receipts or
temporary securities for securities in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for the
securities themselves);
(d) surrender Securities at maturity or when called for redemption
upon receiving payment therefor;
(e) execute in the Client's name such ownership and other certificates
as may be required to obtain the payment of income from Securities;
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(f) pay or cause to be paid, from the Accounts, any and all taxes and
levies in the nature of taxes imposed on Property by any governmental
authority in connection with custody of and transactions in such Property;
(g) endorse for collection, in the name of the Client, checks, drafts
and other negotiable instruments;
(h) take non-discretionary action on mandatory corporate actions; and
(i) in general, attend to all nondiscretionary details in connection
with the custody, sale, purchase, transfer and other dealings with the
Property.
10. Authorized Instructions: Authorized Persons. (a) Except as
otherwise provided in Sections 6 through 9, 13 and 17, all payments of monies,
all transfers, exchanges or deliveries of Property and all responses to
corporate actions shall be made or taken only upon receipt by the Custodian of
Authorized Instructions; provided that such Authorized Instructions are timely
received by the Custodian. "Authorized Instructions" of the Client means
instructions from an Authorized Person received by telecopy, tested telex,
electronic link or other electronic means or by such other means as may be
agreed in writing between the Client and the Custodian.
(b) "Authorized Person" means each of the persons or entities
identified on Appendix 4 as amended from time to time by written notice from the
Client to the Custodian. The Client represents and warrants to the Custodian
that each Authorized Person listed in Appendix 4, as amended from time to time,
is authorized to issue Authorized Instructions on behalf of the Client. Prior to
the delivery of the Property to the Custodian, the Custodian shall provide a
list of designated system user ID numbers and passwords that the Client shall be
responsible for assigning to Authorized Persons. The Custodian shall assume that
an electronic transmission received and identified by a system user ID number
and password was sent by an Authorized Person. The Custodian agrees to provide
additional designated system user ID numbers and passwords as needed by the
Client. The Client authorizes the Custodian to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Custodian to the Client, Appendix 4
shall be deemed automatically amended accordingly. The Client authorizes the
Custodian to receive, act and rely upon any Authorized Instructions received by
the Custodian which have been issued, or purport to have been issued, by an
Authorized Person.
(c) Any Authorized Person may cancel/correct or otherwise amend any
Authorized Instruction received by the Custodian, but the Client agrees to
indemnify the Custodian for any liability, loss or expense incurred by the
Custodian and its Subcustodians as a result of their having relied upon or acted
on any prior Authorized Instruction. An amendment or cancellation of an
Authorized Instruction to deliver or receive any security or funds in connection
with a trade will not be processed once the trade has settled.
11. Registration of Securities. (a) In the absence of Authorized
Instructions to the contrary, Securities which must be held in registered form
shall be registered in the name of
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the Custodian or the Custodian's nominee or, in the case of Securities in the
custody of an entity other than the Custodian, in the name of the Custodian, its
Subcustodian or any such entity's nominee. The Custodian may, without notice to
the Client, cause any Securities to be registered or re-registered in the name
of the Client.
(b) Where the Custodian has been instructed by the Client to hold any
Securities in the name of any person or entity other than the Custodian, its
Subcustodian or any such entity's nominee, the Custodian shall not be
responsible for any failure to collect such dividends or other income or
participate in any such corporate action with respect to such Securities.
12. Deposit Accounts. All cash received by the Custodian for the
Accounts shall be held by the Custodian as a short-term credit balance in favor
of the Client and, if the Custodian and the Client agree that such credit
balances shall bear interest, the Client shall earn interest at the rates and
times as agreed between the Custodian and the Client. The Client acknowledges
that any such credit balances shall not be accompanied by the benefit of any
governmental insurance.
13. Short-term Credit Extensions. (a) From time to time, the Custodian
may extend or arrange short-term credit for the Client which is (i) necessary in
connection with payment and clearance of securities and foreign exchange
transactions or (ii) pursuant to an agreed schedule, as and if set forth in the
Client Services Guide, of credits for dividends and interest payments on
Securities. All such extensions of credit shall be repayable by the Client on
demand.
(b) The Custodian shall be entitled to charge the Client interest for
any such credit extension at rates to be agreed upon from time to time or, if
such credit is arranged by the Custodian with a third party on behalf of the
Client, the Client shall reimburse the Custodian for any interest charge. In
addition to any other remedies available, the Custodian shall be entitled to a
right of set-off against the Property then held in the Account or Accounts of
that Fund to which credit has been extended to satisfy the repayment of such
credit extensions and the payment of, or reimbursement for, accrued interest
thereon.
14. Representations and Warranties. (a) The Client represents and
warrants that (i) the execution, delivery and performance of this Agreement
(including, without limitation, the ability to obtain the short-term extensions
of credit in accordance with Section 13) are within the Client's power and
authority and have been duly authorized by all requisite action (corporate or
otherwise) of the Client and of the beneficial owner of the Property, if other
than the Client, and (ii) this Agreement and each extension of short-term
credit extended to or arranged for the benefit of the Client in accordance with
Section 13 shall at all times constitute a legal, valid and binding obligation
of the Client enforceable against the Client in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to the
effect of general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
5
(b) The Custodian represents and warrants that (i) the execution,
delivery and performance of this Agreement are within the Custodian's power and
authority and have been duly authorized by all requisite action (corporate or
otherwise) of the Custodian and (ii) this Agreement constitutes the legal,
valid and binding obligation of the Custodian enforceable against the Custodian
in accordance with its terms, except as may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors' rights in general
and subject to the effect of general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
15. Standard of Care; Indemnification. (a) The Custodian shall be
responsible for the performance of only such duties as are set forth in this
Agreement or contained in Authorized Instructions given to the Custodian which
are not contrary to the provisions of any relevant law or regulation. The
Custodian shall be liable to the Client for any loss, liability or expense
incurred by the Client in connection with this Agreement to the extent that any
such loss, liability or expense results from the negligence or willful
misconduct of the Custodian or any Subcustodian; provided, however that neither
the Custodian nor any Subcustodian shall be liable to the Client for any
indirect, special or consequential damages.
(b) The Client acknowledges that the Property may be physically held
outside the United States. The Custodian shall not be liable for any loss,
liability or expense resulting from events beyond the reasonable control of the
Custodian, including, but not limited to, force majeure.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for, and hold each of them harmless from, any
liability, loss or expense (including attorneys' fees and disbursements)
incurred in connection with this Agreement, including without limitation, (i) as
a result of the Custodian having acted or relied upon any Authorized
Instructions or (ii) arising out of any such person acting as a nominee or
holder of record of Securities.
16. Fees; Liens. (a) The Client shall pay to the Custodian from time
to time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon as well as the Custodian's out-of-pocket and incidental
expenses. The Client shall hold the Custodian harmless from any liability or
loss resulting from any taxes or other governmental charges, and any expenses
related thereto, which may be imposed or assessed with respect to the Accounts
or any Property held therein. The Custodian is, and any Subcustodians are,
authorized to charge the Accounts for such items. The Custodian and each
Subcustodian shall notify the Client of any such charges made.
(b) The Custodian shall have a lien, charge and security interest on
any and all Property held in an Account or Accounts by a Fund for any amount
owing to the Custodian in respect of such Account from time to time under this
Agreement.
17. Termination. This Agreement may be terminated by the Client or the
Custodian by 90 days written notice to the other, sent by registered mail. If
notice of termination is given, the Client shall, within 60 days following the
giving of such notice, deliver to the
6
Custodian a statement in writing specifying the successor custodian or other
person to whom the Custodian shall transfer the Property. In either event, the
Custodian, subject to the satisfaction of any lien it may have, shall transfer
the Property to the person so specified. If the Custodian does not receive such
statement the Custodian, at its election, may transfer the Property to a bank or
trust company established under the laws of the United States or any state
thereof to be held and disposed of pursuant to the provisions of this Agreement
or may continue to hold the Property until such a statement is delivered to the
Custodian. In such event the Custodian shall be entitled to fair compensation
for its services during such period as the Custodian remains in possession of
any Property and the provisions of this Agreement relating to the duties and
obligations of the Custodian shall remain in full force and effect; provided,
however, that the Custodian shall have no obligation to settle any transactions
in Securities for the Accounts. The provisions of Sections 15 and 16 shall
survive termination of this Agreement.
18. Investment Advice. The Custodian shall not supervise, recommend or
advise the Client relative to the investment, purchase, sale, retention or other
disposition of any Property held under this Agreement.
19. Confidentiality. (a) The Custodian, its agents and employees shall
maintain the confidentiality of information concerning the Property held in the
Client's account, including in dealings with affiliates of the Custodian. In
the event the Custodian or any Subcustodian is requested or required to disclose
any confidential information concerning the Property, the Custodian shall, to
the extent practicable and legally permissible, promptly notify the Client of
such request or requirement so that the Client may seek a protective order or
waive any objection to the Custodian's or such Subcustodian's compliance with
this Section 19. In the absence of such a waiver, if the Custodian or such
Subcustodian is compelled, in the opinion of its counsel, to disclose any
confidential information, the Custodian or such Subcustodian may disclose such
information to such persons as, in the opinion of counsel, is so required.
(b) The Client shall maintain the confidentiality of, and not provide
to any third parties absent the written permission of the Custodian, any
computer software, hardware or communications facilities made available to the
Client or its agents by the Custodian.
20. Notices. Any notice or other communication from the Client to
the Custodian, unless otherwise provided by this Agreement or the Client
Services Guide, shall be sent by certified or registered mail to Xxxxxx Xxxxxxx
Trust Company, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, 00000, Attention:
President, and any notice from the Custodian to the Client is to be mailed
postage prepaid, addressed to the Client at the address appearing below, or as
it may hereafter be changed on the Custodian's records in accordance with
written notice from the Client.
21. Assignment. This contract may not be assigned by either party
without the prior written approval of the other.
22. Miscellaneous. (a) This Agreement shall bind the successors and
assigns of the Client and the Custodian.
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(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to its conflicts
of law rules and to the extent not preempted by federal law. The Custodian and
the Client hereby irrevocably submit to the exclusive jurisdiction of any New
York State court or any United States District Court located in the State of New
York in any action or proceeding arising out of this Agreement and hereby
irrevocably waive any objection to the venue of any such action or proceeding
brought in any such court or any defense of an inconvenient forum.
In witness whereof, the parties hereto have set their hands as of the
date first above written.
AMERICAN SKANDIA ADVISOR
FUNDS, INC., on behalf of
each of the Funds
BY /s/ Illegible
------------------------------
Name:
Title:
Address for record:
------------------------------
------------------------------
------------------------------
Accepted:
XXXXXX XXXXXXX TRUST COMPANY
By /s/ Illegible
---------------------------------
Authorized Signature
8
SCHEDULE V
INVESTMENT MANAGEMENT AGREEMENT
STRATEGIC PARTNERS OPPORTUNITY FUNDS
Management Agreement
Agreement made this 26th day of February, 2002, between Strategic
Partners Opportunity Funds (formerly, Strategic Partners Series), a Delaware
business trust (the "Trust"), on behalf of each series listed on Schedule A
attached hereto, as amended from time to time (each such series, a "Fund"), and
Prudential Investments LLC (formerly Prudential Investment Fund Management LLC),
a New York limited liability company (the "Manager").
WITNESSETH
WHEREAS, the Trust is a non-diversified open-end, management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act'); and
WHEREAS, the Trust desires to retain the Manager to render or contract
to obtain as hereinafter provided investment advisory services to the Fund and
the Trust also desires to avail itself of the facilities available to the
Manager with respect to the administration of the day-to-day business affairs of
the Fund, and the Manager is willing to render such investment advisory and
administrative services;
NOW, THEREFORE, the parties agree as follows:
1. The Trust hereby appoints the Manager to act as manager of the Fund, and
as administrator of the business affairs of the Fund for the period and on the
terms set forth in this Agreement. The Manager accepts such appointment and
agrees to render the services herein described, for the compensation herein
provided. Subject to the approval of the Board of Trustees of the Trust, the
Manager is authorized to enter into a subadvisory agreement with Prudential
Investment Management Inc. (formerly The Prudential Investment Corporation),
Xxxxxxxx Associates LLC, or any other subadviser, whether or not affiliated with
the Manager (each, a Subadviser), pursuant to which such Subadviser shall
furnish to the Fund the investment advisory services in connection with the
management of the Fund (each, a "Subadvisory Agreement"). Subject to the
approval of the Board of Trustees of the Trust, the Manager is authorized to
retain more than one Subadviser for the Fund, and if the Fund has more than one
Subadviser, the Manager is authorized to allocate the Fund's assets among the
Subadvisers. The Manager will continue to have responsibility for all investment
advisory services furnished pursuant to any Subadvisory Agreement. The Trust and
the Manager understand and agree that the Manager may manage the Fund in a
"manager-of-managers" style with either a single or multiple Subadvisers, which
contemplates that the Manager will, among other things and pursuant to an order
issued by the Securities and Exchange Commission ("SEC"): (i) continually
evaluate the performance of the Subadviser to the Fund through quantitative and
qualitative analysis and consultations with such Subadviser; (ii) periodically
make recommendations to the Trust's Board as to whether the contract with one or
more Subadvisers should be renewed, modified, or terminated; and (iii)
periodically report to the Trust's Board regarding the results of its evaluation
and monitoring functions. The Trust recognizes that subject to the approval of
the
Board of Trustees of the Trust, a Subadviser's services may be terminated or
modified pursuant to the "manager-of-managers" process and that the Manager may
appoint a new Subadviser for a Subadviser that is so removed.
2. Subject to the supervision of the Board of Trustees of the Trust, the
Manager shall administer the Fund's business affairs and, in connection
therewith, shall furnish the Fund with office facilities and with clerical,
bookkeeping and recordkeeping services at such office facilities and, subject to
Section 1 hereof and any Subadvisory Agreement, the Manager shall manage the
investment operations of the Fund and the composition of the Fund's portfolio
including the purchase, retention and disposition thereof, in accordance with
the Fund's investment objectives, policies and restrictions as stated in the
Fund's SEC registration statement, and subject to the following understandings:
(a) The Manager (or a Subadviser under the Manager's supervision)
shall provide supervision of the Fund's investments, and shall determine
from time to time what investments or securities will be purchased,
retained, sold or loaned by the Fund, and what portion of the assets will
be invested or held uninvested as cash.
(b) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Agreement and
Declaration of Trust and By-Laws of the Trust and the Trust's SEC
registration statement and with the instructions and directions of the
Board of Trustees of the Trust, and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations. In connection therewith, the Manager shall, among
other things, prepare and file (or cause to be prepared and filed) such
reports as are, or may in the future be, required by the SEC.
(c) The Manager (or the Subadviser under the Manager's supervision)
shall determine the securities and futures contracts to be purchased or
sold by the Fund and will place orders pursuant to its determinations with
or through such persons, brokers, dealers or futures commission merchants
(including but not limited to Prudential Securities Incorporated) in
conformity with the policy with respect to brokerage as set forth in the
Trust's Registration Statement or as the Board of Trustees may direct from
time to time. In providing the Fund with investment supervision, it is
recognized that the Manager (or the Subadviser under the Manager's
supervision) will give primary consideration to securing the most favorable
price and efficient execution. Consistent with this policy, the Manager (or
Subadviser under the Manager's supervision) may consider the financial
responsibility, research and investment information and other services
provided by brokers, dealers or futures commission merchants who may effect
or be a party to any such transaction or other transactions to which other
clients of the Manager (or Subadviser) may be a party. It is understood
that Prudential Securities Incorporated (or a broker-dealer affiliated with
a Subadviser) may be used as principal broker for securities transactions,
but that no formula has been adopted for allocation of the Fund's
investment transaction business. It is also understood that it is desirable
for the Fund that the Manager (or Subadviser) have access to supplemental
investment and market research and security and economic analysis provided
by brokers or futures
2
commission merchants, and that such brokers or futures commission merchants
may execute brokerage transactions at a higher cost to the Fund than may
result when allocating brokerage to other brokers or futures commission
merchants on the basis of seeking the most favorable price and efficient
execution. Therefore, the Manager (or the Subadviser under the Manager's
supervision) is authorized to pay higher brokerage commissions for the
purchase and sale of securities and futures contracts for the Fund to
brokers or futures commission merchants who provide such research and
analysis, subject to review by the Trust's Board of Trustees from time to
time with respect to the extent and continuation of this practice. It is
understood that the services provided by such broker or futures commission
merchant may be useful to the Manager (or the Subadviser) in connection
with its services to other clients.
On occasions when the Manager (or a Subadviser under the Manager's
supervision) deems the purchase or sale of a security or a futures contract
to be in the best interest of the Fund as well as other clients of the
Manager (or the Subadviser), the Manager (or Subadviser), to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities or futures contracts to be so sold
or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the
securities or futures contracts so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager (or the
Subadviser) in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(d) The Manager (or the Subadviser under the Manager's supervision)
shall maintain all books and records with respect to the Fund's portfolio
transactions and shall render to the Trust's Board of Trustees such
periodic and special reports as the Board may reasonably request.
(e) The Manager (or the Subadviser under the Manager's supervision)
shall be responsible for the financial and accounting records to be
maintained by the Fund (including those being maintained by the Fund's
Custodian).
(f) The Manager (or the Subadviser under the Manager's supervision)
shall provide the Fund's Custodian on each business day information
relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Manager to the Fund
under this Agreement are not to be deemed exclusive, and the Manager shall
be free to render similar services to others.
(h) The Manager shall make reasonably available its employees and
officers for consultation with any of the Trustees or officers or employees
of the Trust with respect to any matter discussed herein, including,
without limitation, the valuation of the Fund's securities.
3
3. The Fund has delivered to the Manager copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) Agreement and Declaration of Trust;
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Trustees of the Trust
authorizing the appointment of the Manager and approving the form of this
agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-lA (the Registration Statement), as filed
with the SEC relating to the Fund and its shares of beneficial interest and
all amendments thereto; and
(e) Prospectus and Statement of Additional Information of the Fund.
4. The Manager shall authorize and permit any of its officers and employees
who may be elected as Trustees or officers of the Trust to serve in the
capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through the medium of any such
officers or employees of the Manager.
5. The Manager shall keep the Fund's books and records required to be
maintained by it pursuant to Paragraph 2 hereof. The Manager agrees that all
records which it maintains for the Fund are the property of the Fund, and it
will surrender promptly to the Fund any such records upon the Fund's request,
provided however that the Manager may retain a copy of such records. The Manager
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records as are required to be maintained by the Manager
pursuant to Paragraph 2 hereof.
6. During the term of this Agreement, the Manager shall pay the following
expenses:
(i) the salaries and expenses of all employees of the Trust and the
Manager, except the fees and expenses of Trustees who are not affiliated
persons of the Manager or any Subadviser,
(ii) all expenses incurred by the Manager in connection with managing
the ordinary course of the Fund's business, other than those assumed by the
Fund herein, and
(iii) the fees, costs and expenses payable to a Subadviser pursuant to
a Subadvisory Agreement. The Trust assumes and will pay the expenses
described below:
(a) the fees and expenses incurred by the Trust in connection
with the management of the investment and reinvestment of the Fund's
assets,
(b) the fees and expenses of Trust Trustees who are not
"interested persons" of the Trust within the meaning of the 1940 Act,
4
(c) the fees and expenses of the Custodian that relate to (i) the
custodial function and the recordkeeping connected therewith, (ii)
preparing and maintaining the general accounting records of the Fund
and the provision of any such records to the Manager useful to the
Manager in connection with the Manager's responsibility for the
accounting records of the Fund pursuant to Section 31 of the 1940 Act
and the rules promulgated thereunder, (iii) the pricing or valuation
of the shares of the Fund, including the cost of any pricing or
valuation service or services which may be retained pursuant to the
authorization of the Board of Trustees of the Trust, and (iv) for both
mail and wire orders, the cashiering function in connection with the
issuance and redemption of the Fund's securities,
(d) the fees and expenses of the Trust's Transfer and Dividend
Disbursing Agent that relate to the maintenance of each shareholder
account,
(e) the charges and expenses of legal counsel and independent
accountants for the Trust,
(f) brokers' commissions and any issue or transfer taxes chargeable to
the Fund in connection with its securities and futures transactions,
(g) all taxes and corporate fees payable by the Fund to federal, state
or other governmental agencies,
(h) the fees of any trade associations of which the Fund may be a
member,
(i) the cost of share certificates representing, and/or non-negotiable
share deposit receipts evidencing, shares of the Fund,
(j) the cost of fidelity, directors' and officers' and errors and
omissions insurance,
(k) the fees and expenses involved in registering and maintaining
registration of the Trust and of shares of the Fund with the Securities and
Exchange Commission, and paying notice filing fees under state securities
laws, including the preparation and printing of the Trust's registration
statement and the Fund's prospectus and statements of additional
information for filing under federal and state securities laws for such
purposes,
(1) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing reports and notices to shareholders in the
amount necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business, and
5
(n) any expenses assumed by the Fund pursuant to a Distribution and
Service Plan adopted in a manner that is consistent with Rule 12b-l under
the 1940 Act.
7. For the services provided and the expenses assumed pursuant to this
Agreement, the Trust will pay to the Manager as full compensation therefor a fee
at the annual rate(s) as described on the attached Schedule A with respect to
the average daily net assets of the Fund. This fee will be computed daily, and
will be paid to the Manager monthly.
8. The Manager shall not be liable for any error of judgment or for any
loss suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 0000 Xxx) or loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
9. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated with respect to the
Fund by the Trust at any time, without the payment of any penalty, by the Board
of Trustees of the Trust or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund, or by the Manager at any
time, without the payment of any penalty, on not more than 60 days' nor less
than 30 days' written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of any
officer or employee of the Manager who may also be a Trustee, officer or
employee of the Trust to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any business,
whether of a similar or dissimilar nature, nor limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other corporation, firm, individual or association.
11. Except as otherwise provided herein or authorized by the Board of
Trustees of the Trust from time to time, the Manager shall for all purposes
herein be deemed to be an independent contractor, and shall have no authority to
act for or represent the Fund in any way or otherwise be deemed an agent of the
Fund.
12. During the term of this Agreement, the Trust agrees to furnish the
Manager at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the Manager,
prior to use thereof and not to use such material if the Manager reasonably
objects in writing within five business days (or such other time as may be
mutually agreed) after receipt thereof. In the event of termination of this
Agreement, the Trust will continue to furnish to the Manager copies of any of
the above- mentioned materials that refer in any way to the Manager. Sales
literature may be furnished to the Manager hereunder by first-
6
class or overnight mail, facsimile transmission equipment or hand delivery. The
Trust shall furnish or otherwise make available to the Manager such other
information relating to the business affairs of the Fund as the Manager at any
time, or from time to time, reasonably requests in order to discharge its
obligations hereunder.
13. This Agreement may be amended by mutual consent, but the consent of the
Trust must be obtained in conformity with the requirements of the 1940 Act. BY
MUTUAL CONSENT WITH THE MANAGER, THE TRUST MAY ADD FURTHER SERIES TO SCHEDULE A
FROM TIME TO TIME, SUBJECT TO BOARD AND SHAREHOLDER APPROVAL.
14. Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Manager at Gateway Center Three, 000 Xxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; or (2) to the
Trust at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: President.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. The Fund may use any name including the word "Prudential" only for so
long as this Agreement or any extension, renewal or amendment hereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to the Manager's business as Manager or any extension, renewal or
amendment thereof remain in effect. At such time as such an agreement shall no
longer be in effect, the Fund will (to the extent that it lawfully can) cease to
use such a name or any other name indicating that it is advised by, managed by
or otherwise connected with the Manager, or any organization which shall have so
succeeded to such businesses. In no event shall the Fund use any name including
the word "Prudential" if the Manager's function is transferred or assigned to a
company of which Prudential Financial, Inc. does not have control.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
STRATEGIC PARTNERS OPPORTUNITY FUNDS
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
President
PRUDENTIAL INVESTMENTS LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
7
SCHEDULE A
FUNDS COVERED BY THE MANAGEMENT AGREEMENT BETWEEN STRATEGIC PARTNERS OPPORTUNITY
FUNDS AND PRUDENTIAL INVESTMENTS LLC DATED FEBRUARY 26, 2002
-----------------------------------------------------------------------------------------------
DATE ADDED TO MANAGEMENT
FUND MANAGEMENT FEE* AGREEMENT
-----------------------------------------------------------------------------------------------
Strategic Partners Market Opportunity Fund 0.90% to $1 billion and February 26, 2002
0.85% above $1 billion
-----------------------------------------------------------------------------------------------
Strategic Partners Mid-Cap Value Fund 0.90% to $1 billion and February 26, 2002
0.85% above $1 billion
-----------------------------------------------------------------------------------------------
----------
* Annual fee, based on a percentage of a Fund's average daily net assets.
8
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]/1/
PNC Bank, National Association
as Administrative Agent for the Banks
party to the Credit Agreement referred
to below
Agency Services
PNC Firstside Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, dated as of October 29,
2004 as amended, modified or supplemented from time to time, the "Credit
Agreement", the capitalized terms defined therein being used herein as therein
defined), among the separate mutual fund portfolios (including the undersigned)
listed on Schedule I thereto, the financial institutions from time to time party
thereto (the "Banks"), PNC Bank, National Association as Lead Arranger and
Administrative Agent and The Bank of New York, as Co-Lead Arranger and
Syndication Agent, and, pursuant to Section 1.03 of the Credit Agreement, hereby
gives you irrevocable notice (except as otherwise provided in the Credit
Agreement) that the undersigned hereby requests a Borrowing under the Credit
Agreement, and sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 1.03 of the Credit Agreement.
(i) Such Proposed Borrowing is to be initially comprised of [Revolving
Loans] [Swingline Loans].
(ii) The principal amount of the Proposed Borrowing is $ ./2/
--------------
----------
/1/ Shall be a date (i) on or prior to the Business Day such Proposed Borrowing
is desired in the case of Base Rate Loans, Fed Funds Loans and Swingline
Loans or (ii) at least three Business Days prior to the Business Day such
Borrowing is desired in the case of Revolving Loans to be initially
maintained as LIBOR Loans. Any such notice shall be deemed to have been
given on a certain day only if given before 12:00 Noon (Philadelphia time)
(or, in the case of Swingline Loans, 3:00 P.M. Philadelphia time) on such
day.
(iii) The Business Day of the Proposed Borrowing is .
--------------
(iv) The Borrower on behalf of which such Revolving Loan is being requested
is (the "Relevant Borrower").
--------------
(v) The Asset Coverage Ratio of the Relevant Borrower as of the close of
business on the first Business Day prior to this Notice of Borrowing
is ./3/
--------------
(vi) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Fed Funds Loans] [LIBOR Loans]./4/
[(vii)] The initial Interest Period applicable to the Loans made pursuant
to the Proposed Borrowing shall be one month./5/
[(vii) (viii)] The proceeds of the Proposed Borrowing shall be delivered to
the Relevant Borrower's Custodian in accordance with the following wiring
instructions
--------------------------------
--------------------------------
--------------------------------
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement
and the other Credit Documents are and will be true and correct in all material
respects, both before and after giving effect to the Proposed Borrowing and to
the application of the proceeds thereof, as though made on such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date, and
(B) no Default or Event of Default has occurred and is continuing, or would
result from the Proposed Borrowing or from the application of the proceeds
thereof.
----------
(...continued)
/2/ Shall be an amount not less than $1,000,000 in the case of Revolving Loans
and $250,000 in the case of Swingline Loans, and in multiples of $100,000
if in excess thereof.
/3/ Attach the calculations necessary to compute the Asset Coverage Ratio of
such Borrower as of the close of business on the latest Business Day
preceding the date of such Notice of Borrowing after giving pro forma
effect to such Borrowing.
/4/ Swingline Loans may only be maintained as Fed Funds Loans or Base Rate
Loans.
/5/ Insert only if the Proposed Borrowing is a Borrowing of LIBOR Loans.
2
Very truly yours,
[PROPOSED BORROWER]
By:
------------------------------
Name:
Title:
3
EXHIBIT B
FORM OF ADDITIONAL BORROWER REQUEST
,
--------------- ------
PNC Bank, National Association, as Administrative Agent
Agency Services
PNC Firstside Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Via Facsimile: (000) 000-0000
PNC Bank, National Association, as Bank
Attn: D. Xxxx Xxxxxxx
Via Facsimile: (000) 000-0000
Bank of New York, as Bank
Attn: Xxxxxxx Xxxxxxx
Via Facsimile:
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of October 29,
2004 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and between the mutual fund portfolios listed on Schedule
I thereto, all of the which are borrowers (each a "Borrower" and collectively,
the "Borrowers"), the Banks party thereto, PNC Bank, National Association, as
Lead Arranger and Administrative Agent (in such capacity, the "Administrative
Agent") and The Bank of New York, as Co-Lead Arranger and Syndication Agent.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Credit Agreement.
The undersigned on behalf of [NAME OF ADDITIONAL BORROWER] (the "Additional
Borrower") hereby requests pursuant to Section 1.13 of the Credit Agreement that
the Additional Borrower be admitted as a Borrower under the Credit Agreement.
Furthermore, the Fund requests that Schedule I to the Credit Agreement be
replaced with the form of Schedule I attached hereto.
The undersigned on behalf of the Additional Borrower, hereby represents and
warrants to the Administrative Agent and the Banks that as of the date hereof
and after giving effect to the admission of the Additional Borrower as a
Borrower under the Credit Agreement: (i) the representations and warranties
(other than such representations and warranties as by their terms are made as of
a specific date) set forth in Section 6 of the Credit Agreement, in all material
respects, are true and correct with respect to the Additional Borrower; (ii) the
Additional Borrower is in compliance in all material respects with all the terms
and provisions set forth in the Credit Agreement on its part to be observed or
performed as of the date hereof and after giving effect to the admission; (iii)
no Default or Event of Default with respect to the Additional
Borrower, nor any event which with the giving of notice or the expiration of any
applicable grace period or both would constitute such a Default or Event of
Default with respect to the Additional Borrower has occurred and is continuing.
The Additional Borrower agrees to be bound by the terms and conditions of
the Credit Agreement in all respects as a Borrower thereunder and hereby assumes
all of the obligations of a Borrower thereunder.
Please indicate your assent to the admission of the Additional Borrower as
a Borrower under the Credit Agreement and the replacement of Schedule I to the
Credit Agreement by signing below where indicated.
[AUTHORIZED OFFICER], on behalf of
the Additional Borrower
By:
------------------------------
Name:
Title:
AGREED AND ACCEPTED:
[PNC BANK, NATIONAL ASSOCIATION],
as Administrative Agent
By:
-----------------------------------
Name:
Title:
[PNC BANK, NATIONAL ASSOCIATION],
as Bank
By:
-----------------------------------
Name:
Title:
[BANK OF NEW YORK],
as Bank
By:
-----------------------------------
Name:
Title:
EXHIBIT C
FORM OF REMOVAL OF BORROWER NOTICE
,
-------------- -----
PNC Bank, National Association, as Administrative Agent
Agency Services
PNC Firstside Center
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Via Facsimile: (000) 000-0000
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of October 29,
2004 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and between the mutual fund portfolios listed on Schedule
I thereto, all of the which are borrowers (each a "Borrower", and collectively,
the "Borrowers"), the Banks party thereto, PNC Bank, National Association, as
Lead Arranger and Administrative Agent (in such capacity, the "Administrative
Agent") and The Bank of New York, as Co-Lead Arranger and Syndication Agent.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Credit Agreement.
The undersigned on behalf of [NAME OF BORROWER] (the "Borrower") hereby
gives notice pursuant to Section 1.14 of the Credit Agreement that the Borrower
elects to remove itself as a Borrower under the Credit Agreement. Furthermore,
the undersigned requests that Schedule I to the Credit Agreement be replaced
with the form of Schedule I attached hereto.
The undersigned on behalf of the Borrower, hereby represents and warrants
to the Administrative Agent as of the date hereof that the Borrower has no Loans
or other Obligations outstanding under the Credit Agreement.
The Borrower agrees that upon the effective of such removal, the Borrower
shall cease to be a Borrower for all purposes of the Credit Agreement, except
that all indemnification provisions of the Credit Agreement shall survive as to
the Borrower.
Please indicate your acknowledgement to the removal of the Borrower as a
Borrower under the Credit Agreement and the replacement of Schedule I to the
Credit Agreement by signing below where indicated.
[AUTHORIZED OFFICER], on behalf of
Borrower
By:
------------------------------
Name:
Title:
AGREED AND ACCEPTED:
[PNC BANK, NATIONAL ASSOCIATION],
as Administrative Agent
By:
---------------------------------
Name:
Title:
EXHIBIT D
FORM OF OFFICERS' CERTIFICATE
I, the undersigned [President/Vice President] of the entities, listed
on Annex A hereto, each a corporation or trust organized and existing under the
laws of the [State/Commonwealth] of (the "Entities"), do hereby
--------------
certify on behalf of the Entities that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of October 29, 2004, among the Fund Portfolios listed on Schedule I
thereto (the "Borrowers"), the various banks from time to time party thereto,
PNC Bank, National Association as Lead Arranger and Administrative Agent and the
Bank of New York, as Co-Lead Arranger and Syndication Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called the
"Credit Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are employees and/or elected
officers of the Entities. Each employee is duly authorized to act on behalf of
the Borrowers in connection with the execution and delivery of the Credit
Agreement and/or related loan documents, or requesting a loan thereunder on
behalf of the Borrower. Each elected officer holds the office of the Entities
set forth opposite his name and each has held such office since
----------- ---,
./1/ The signature written opposite the name and title of each such
------
individual is his or her genuine signature.
Name/2/ Office/Employee Signature
------ --------------- ---------
-------------------------- ------------------------ ------------------------
-------------------------- ------------------------ ------------------------
-------------------------- ------------------------ ------------------------
-------------------------- ------------------------ ------------------------
3. Attached hereto as Exhibit A is a certified copy of the Articles of
Incorporation or Certificate of Trust, together with all amendments thereto, of
each Entity, as
----------
/1/ Include a date prior to any corporate action taken in connection with any
Credit Document.
/2/ Include name, office or whether such individual is an employee and
signature of each individual who will sign any Credit Document, including
the officer who will sign the certification at the end of this Certificate
or related documentation.
filed in the Office of the Secretary of State of the [State/Commonwealth] of
.
--------------------
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws or Trust Agreement of each Entity, together with all amendments
thereto, which were duly adopted, are in full force and effect on the date
hereof.
5. Attached hereto as Exhibit C are true and correct copy of
resolutions authorizing the transactions contemplated under the Credit
Agreements which were duly adopted on , 2004 [by unanimous
----------------- ---
written consent of the Board of Directors of each Entity] [by a meeting of the
Board of Directors of each Entity at which a quorum was present and acting
throughout and by each Entity that is a trust], and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Board of Directors of any Entity which deal
with the execution, delivery or performance of any Credit Document to which such
Entity is a party.
6. Attached hereto as Exhibit D are true and correct copies of the
Prospectuses of each Entity together with any supplements thereto.
7. Attached hereto as Exhibit E are true and correct copies of all
Statements of Additional Information of each Entity.
8. Attached hereto as Exhibit F are true and correct copies of the
most recent annual or semi-annual reports of certain Entities. Any and all
financial information for each of the Borrowers is accessible and available on
the internet at [INSERT WEBSITES] and such financial information as to each
Borrower is true and correct in all material respects.
9. Attached hereto as Exhibit G is a true and correct copy of an
Investment Management Agreement, between [INSERT MANAGER], the investment
manager and [INSERT ENTITY]. Each Entity [or Entity on behalf of a Borrower] is
a party to an Investment Management Agreement which is in substantially the same
form as attached hereto.
10. Attached hereto as Exhibit H is a true and correct list of all of
the Custodians and the Entities and Borrowers which are parties to a Custody
Agreement with each such Custodian.
11. Attached hereto as Exhibit I are true and correct copies of an
example of a Custody Agreement which has been entered into by each such
Custodian and one of the Entities. Each Entity on behalf of itself and/or other
Borrowers is a party to a Custody Agreement which is in substantially the same
form as the respective form for such Custodian attached hereto.
12. On the date hereof, the conditions set forth in Sections 4.05 and
4.06 of the Credit Agreement have been satisfied.
13. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations and
warranties had been made on the date hereof, both before and after giving effect
to the incurrence of Loans (if any) on the date hereof.
2
and the application of the proceeds thereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
14. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from any Borrowing to occur on the date hereof
(if any) or from the application of the proceeds thereof.
15. There is no proceeding for the dissolution or liquidation of any
Entity or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
-----
October, 2004
-----------------------------------
Name
Title
I, the undersigned, [Officer held by Individual Certifying] of the Entities, do
hereby certify on behalf of the Entities that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Entities and the signature above
is his/her genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Entities in Items 2, 3, 4, 5 and 15 above are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
-----
October, 2004.
-----------------------------------
Name:
Title:
3
EXHIBIT E
FORM OF OPINION OF COUNSEL
October 29, 2004
To the Banks party to the
Credit Agreement referred to below
Ladies and Gentlemen:
I, [Xxxxxxx X. Xxxxxx], have acted as counsel for each of the relevant
entities (the "Entities") listed in Schedule I, each a corporation or trust
organized and existing under the laws of the State of Delaware, Maryland or
Commonwealth of Massachusetts, as applicable, and such series of such Entities
listed on Schedule I to the Agreement (as hereinafter defined), all of the which
are borrowers (each a "Borrower" and collectively the "Borrowers") under the
Agreement (as hereinafter defined), in connection with the execution and
delivery of the Credit Agreement, dated as of October 29, 2004, among the
Borrowers, the banks party thereto, PNC Bank, National Association, as Lead
Arranger and Administrative Agent and The Bank of New York, as Co-Lead Arranger
and Syndication Agent (the "Agreement").
This opinion is delivered to you pursuant to Section 4.03 of the Agreement.
Terms used herein which are defined in the Agreement shall have the respective
meanings set forth in the Agreement, unless otherwise defined herein.
In connection with this opinion, I have examined the originals or
certified, conformed or reproduction copies of all records, agreements,
instruments and documents as I have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In giving this opinion, I have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to me as originals, and the conformity to
original or certified copies of all copies submitted to me as certified or
reproduction copies.
I have also assumed, for purposes of the opinions expressed herein, that
the parties to the Agreement other than the Borrowers, have the corporate power
and authority to enter into and perform the Agreement and that the Agreement has
been duly authorized, executed and delivered by each such other party.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that:
1. Each Entity (i) is a duly organized and validly existing trust or
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate or trust power and authority to own its
property and assets and to transact the business in which it is engaged as
described in its Prospectus, except where the lack of such power or authority
would not reasonably be expected to have a material adverse effect on the
business, operations,
property, assets, liabilities or condition (financial or otherwise) of such
Entity, and (iii) is duly qualified as a foreign corporation and in good
standing in each jurisdiction where the ownership, leasing or operation of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower.
2. Each Entity has the corporate or trust power to execute, deliver
and perform the terms and provisions of the Agreement on behalf of the
applicable Borrower, which may be such Entity or one or more series of such
Entity (the "Applicable Borrower") and has taken all necessary action to
authorize the execution, delivery and performance by it on behalf of the
Applicable Borrower of the Agreement. Each Entity has duly executed and
delivered the Agreement on behalf of the Applicable Borrower and the Agreement
constitutes the valid and legally binding obligation of the Entities on behalf
of each Entity with respect to its Applicable Borrower enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization and
similar laws affecting creditors' rights generally and by general equitable
principles.
3. Neither the execution, delivery or performance by any Entity on
behalf of itself and/or any of the Borrowers of the Agreement, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any New York or Federal law, statute, rule or regulation (including, without
limitation, the Investment Company Act and Regulations T, U and X of the Board
of Governors of the Federal Reserve System) or, to the best of my knowledge
after due inquiry, any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of such Entity with respect to its Applicable Borrower pursuant to the
term of, any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which any Entity or
any of the Borrowers is a party or by which it or any of its property or assets
is bound or to which it may be subject, or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws or Declaration of Trust, as
applicable, of any Borrower.
4. To the best of my knowledge after due inquiry, there are no
actions, suits or proceedings pending or threatening (i) with respect to the
Agreement, or (ii) that could reasonably be expected to materially and adversely
affect the operations, business, property, assets, liabilities or condition
(financial or otherwise) of any Borrower.
5. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made prior to the Effective Date), or exemption by, any New York or Federal
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of the Agreement, or (ii) the legality, validity,
binding effect or enforceability of the Agreement.
2
6. Each Borrower is duly registered as an open-end management
investment company under the Investment Company Act and such registration and
has not been revoked and is in full force and effect.
With your approval I have relied as to certain matters upon information
obtained from public officials, officers of the Borrowers and other sources
believed by me to be responsible.
I am a member of the Bar of the State of New York and do not hold myself
out as being conversant with, and express no opinion as to, the laws of any
jurisdiction other than those of the United States of America and the State of
New York and the general corporate and or trust laws of the State of Delaware,
Maryland or the Commonwealth of Massachusetts. Insofar as the opinions expressed
herein relate to matters governed by laws other than those set forth in the
preceding sentence, I have assumed, without independent investigation, that the
law of such other jurisdictions do not differ in any relevant or material way
from the law of the State of New York or Federal law.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person.
Very truly yours,
[Xxxxxxx X. Xxxxxx]
Chief Legal Officer
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
3
EXHIBIT F
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
DATE:
-------------
Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined. (the "Assignor")
---------------------------
and (the "Assignee") hereby agree as follows:
-----------------------
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Total Commitment and of
the outstanding Loans. After giving effect to such sale and assignment, the
Assignee's Commitment will be as set forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under the Credit Agreement or the other Credit Documents or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(iv) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Credit Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
Page 2
required to be performed by it as a Bank [; and (vi) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an applicable
tax treaty]./1/
4. Following the execution of this Assignment and Assumption Agreement
by the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee (and if required by the terms of the
Credit Agreement, the consent of the Administrative Agent and the Borrowers) and
the receipt by the Administrative Agent of the administrative fee referred to in
Section 12.04(b) of the Credit Agreement, unless otherwise specified in Item 5
of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I and (y) all Commitment Fees (if applicable) on
the Assigned Share of the Total Commitment at the rate specified in Item 7 of
Annex I, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Commitment Fees, to be paid by the Administrative
Agent, upon receipt thereof from the Borrowers, directly to the Assignee. It is
further agreed that all payments of principal made by the Borrowers on the
Assigned Share of the Loans which occur on and after the Settlement Date will be
paid directly by the Administrative Agent to the Assignee. Upon the Settlement
Date, the Assignee shall pay to the Assignor an amount specified by the Assignor
in writing which represents the Assigned Share of the principal amount of the
respective Loans made by the Assignor pursuant to the Credit Agreement which are
outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
----------
/1/ Insert if Assignee is organized under a jurisdiction outside the United
States.
Page 3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By
---------------------------
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By
---------------------------
Name:
Title:
Acknowledged and Agreed:
[PNC BANK, NATIONAL ASSOCIATION,]
as Administrative Agent
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
Page 4
[AUTHORIZED OFFICER],
On behalf of the Borrowers
listed on Schedule I to the Credit Agreement
By:
---------------------------
Name:
Title:]/2/
----------
/2/ Insert if assignment is not being made to the Assignor's Affiliate or to
another Bank and no Default or Event of Default exists under the Credit
Agreement.
EXHIBIT D
OFFICERS' CERTIFICATE
I, the undersigned Vice President of the entities, listed on Annex A
hereto, each a corporation or trust organized and existing under the laws of the
State of Delaware, Maryland or the Commonwealth of Massachusetts (the
"Entities"), do hereby certify on behalf of the Entities that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of October 29, 2004, among the Fund Portfolios listed on Schedule I
thereto (the "Borrowers"), the various banks from time to time party thereto,
PNC Bank, National Association as Lead Arranger and Administrative Agent and the
Bank of New York, as Co-Lead Arranger and Syndication Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called the
"Credit Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are employees and/or elected
officers of the Entities. Each employee is duly authorized to act on behalf of
the Borrowers in connection with the execution and delivery of the Credit
Agreement and/or related loan documents, or requesting a loan thereunder on
behalf of the Borrower. Each elected officer holds the office of the Entities
set forth opposite his name and each has held such office since December 1,
1998. The signature written opposite the name and title of each such individual
is his or her genuine signature.
Name Office/Employee Signature
---- --------------- ---------
Xxxxxx X. Xxxxx Vice President /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxx Xxxxxx Treasurer /s/ Xxxxx Xxxxxx
--------------------------------------------
Xxxx Xxxxxxxxxx Employee /s/ Xxxx Xxxxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxx Employee /s/ Xxxxxxx Xxxxxxx
--------------------------------------------
3. Attached hereto as Exhibit A is a certified copy of the Articles of
Incorporation or Certificate of Trust, together with all amendments thereto, of
each Entity, as filed in the Office of the Secretary of State the State of
Delaware, Maryland or the Commonwealth of Massachusetts.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws or Trust Agreement of each Entity, together with all amendments thereto,
which were duly adopted, are in full force and effect on the date hereof.
5. Attached hereto as Exhibit C are true and correct copy of
resolutions authorizing the transactions contemplated under the Credit
Agreements which were duly adopted on October 27, 2004 by unanimous written
consent of the Board of Directors of each Entity, and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Board of Directors of any Entity which deal
with the execution, delivery or performance of any Credit Document to which such
Entity is a party.
6. Attached hereto as Exhibit D are true and correct copies of the
Prospectuses of each Entity together with any supplements thereto.
7. Attached hereto as Exhibit E are true and correct copies of all
Statements of Additional Information of each Entity.
8. Attached hereto as Exhibit F are true and correct copies of the
most recent annual or semi-annual reports of certain Entities. Any and all
financial information for each of the Borrowers is accessible and available on
the internet at xxx.xxxxxxxxxx.xxx and xxx.xxxxxxxxxxxxxxx.xxx and such
financial information as to each Borrower is true and correct in all material
respects.
9. Attached hereto as Exhibit G is a true and correct copy of an
Investment Management Agreement, between Prudential Investments LLC, the
investment manager and Strategic Partners Opportunity Funds. Each Entity is a
party to an Investment Management Agreement which is in substantially the same
form as attached hereto.
10. Attached hereto as Exhibit H is a true and correct list of all of
the Custodians and the Entities and Borrowers which are parties to a Custody
Agreement with each such Custodian.
11. Attached hereto as Exhibit I are true and correct copies of an
example of a Custody Agreement which has been entered into by each such
Custodian and one of the Entities. Each Entity on behalf of itself and/or other
Borrowers is a party to a Custody Agreement which is in substantially the same
form as the respective form for such Custodian attached hereto.
12. On the date hereof, the conditions set forth in Sections 4.05 and
4.06 of the Credit Agreement have been satisfied.
13. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations and
warranties had been made on the date hereof, both before and after giving effect
to the incurrence of Loans (if any) on the date hereof and the application of
the proceeds thereof, unless stated to relate to a specific earlier date, in
which case such representations and warranties were true and correct in all
material respects as of such earlier date.
2
14. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from any Borrowing to occur on the date hereof
(if any) or from the application of the proceeds thereof.
15. There is no proceeding for the dissolution or liquidation of any
Entity or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this 28 day of
October, 2004
/s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
I, the undersigned, Treasurer of the Entities, do hereby certify on behalf of
the Entities that:
1. Xxxxxx X. Xxxxx is the duly elected and qualified Vice President of
the Entities and the signature above is his genuine signature.
2. The certifications made by Xxxxxx X. Xxxxx on behalf of the
Entities in Items 2, 3, 4, 5 and 15 above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this 28 day of
October, 2004.
/s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Treasurer
3
EXHIBITS TO OFFICER'S CERTIFICATE
ON FILE WITH ADMINISTRATIVE AGENT
October 29, 2004
Each of the funds and series
or portfolios named on attached
Schedules X-x and B-2 hereto
Re: PNC Bank/Prudential: Post-Closing Letter Agreement
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of October 29,
2004 (the "Credit Agreement"), between the fund portfolios listed from time to
time on Schedule I thereto (collectively, the "Borrowers"), various banks party
thereto (the "Banks"), PNC Bank, National Association, as Lead Arranger and
Administrative Agent ("PNC") and Bank of New York as Co-Lead Arranger and
Syndication Agent ("BONY"). Capitalized terms used herein without definition
shall have the respective meanings ascribed to such terms in the Credit
Agreement.
This letter memorializes the following understandings with respect to
the terms of the Credit Agreement. Notwithstanding that certain conditions to
the making of the initial Loan contemplated by the Credit Agreement have not yet
been satisfied, subject to the terms of this letter, PNC and BONY, have agreed
that the closing took place as of October 29, 2004 and that certain Loans may be
made. Satisfaction of such conditions, however, have not been waived by PNC or
BONY but only postponed, and if any of the requirements described on Schedule A
hereto are not satisfied by November 10, 2004, as specified on Schedule A, it
shall as of such date constitute an Event of Default and the Banks shall
thereafter have no further obligation to make Loans. In addition,
notwithstanding any other provisions of the Credit Agreement, until such time as
all of the requirements described on Schedule A have been satisfied, the Banks
shall not be obligated to make any Loans to the Borrowers listed on Schedule X-x
and Schedule B-2 hereto; provided, however, that PNC agrees to make Swingline
Loans of up to $15,000,000 in the aggregate to the Borrowers listed on Schedule
X-x and Schedule B-2 otherwise in accordance with the requirements of the Credit
Agreement, provided, further, that such Borrowers shall be obligated to repay
any such Swingline Loans within seven Business Days of the making of such
Swingline Loan and such Swingline Loan shall not be repaid with any Mandatory
Borrowings. No Bank shall have any obligation to make any Loans following the
occurrence of an Event of Default.
1
Please acknowledge your agreement with the foregoing items by signing
the enclosed counterpart of this letter agreement in the space indicated below.
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Director
ACKNOWLEDGED AND AGREED:
BANK OF NEW YORK
By:
-------------------------------
Name:
Title:
AUTHORIZED OFFICER on behalf of
each of the funds and the series or portfolios
named on attached Schedules B-1 and Schedule B-2
By:
-------------------------------
Name:
Title:
Please acknowledge your agreement with the foregoing items by signing
the enclosed counterpart of this letter agreement in the space indicated below.
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
BANK OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: XXXXXXX X. XXXXXXX
Title: Managing Director
AUTHORIZED OFFICER on behalf of
each of the funds and the series or portfolios
named on attached Schedules B-1 and Schedule B-2
By:
-------------------------------
Name:
Title:
Please acknowledge your agreement with the foregoing items by signing
the enclosed counterpart of this letter agreement in the space indicated below.
PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
BANK OF NEW YORK
By:
-------------------------------
Name:
Title:
AUTHORIZED OFFICER on behalf of
each of the funds and the series or portfolios
named on attached Schedule B-1 and Schedule B-2
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name:
Title: Treasurer
SCHEDULE A
The Borrowers shall deliver to the Lender, on or before November 10, 2004, the
following items in form and substance satisfactory to PNC:
1. Executed Unanimous Written Consent of the Board of Directors/Trustees of the
funds and series or portfolios listed on Schedule B-1 and Schedule B-2 hereto,
adopting resolutions for each such fund and series or portfolio.
2. Opinion of the Chief Legal Officer required by Section 4.03 of the Credit
Agreement.
A-1
SCHEDULE X-x
1 California Income Series, a series of Xxxxxx California Municipal Fund
2 California Series, a series of Xxxxxx California Municipal Fund
3 Xxxxxx Active Allocation Fund, a series of The Prudential Investment
Portfolios, Inc.
4 Xxxxxx Global Total Return Fund, Inc.
5 Xxxxxx Government Income Fund, Inc.
6 Xxxxxx High Yield Fund, Inc.
7 Xxxxxx International Equity Fund, a series of Prudential World Fund, Inc.
8 Xxxxxx Large-Cap Core Equity Fund, a series of Xxxxxx Tax-Managed Funds
9 Xxxxxx National Municipals Fund, Inc.
10 Xxxxxx Short-Term Corporate Bond Fund, a series of Xxxxxx Short-Term Bond
Fund, Inc.
11 Xxxxxx Small-Cap Core Equity Fund, Inc.
12 Xxxxxx Stock Index Fund, a series of Xxxxxx Index Series Fund
13 Xxxxxx Total Return Bond Fund, Inc.
14 Xxxxxx Ultra Short Bond Fund, a series of the Xxxxxx Short-Term Bond Fund,
Inc.
15 Florida Series, a series of Xxxxxx Municipal Series Fund
16 High Income Series, a series of Xxxxxx Municipal Bond Fund
17 Insured Series, a series of Xxxxxx Municipal Bond Fund
18 Intermediate-Term Bond Portfolio, a series of The Target Portfolio Trust
19 International Bond Portfolio, a series of The Target Portfolio Trust
20 International Equity Portfolio, a series of The Target Portfolio Trust
21 Xxxxxxxx Equity Opportunity Fund, a series of The Prudential Investment
Portfolios, Inc.
22 Xxxxxxxx Financial Services Fund, a series of Xxxxxxxx Sector Funds, Inc.
23 Xxxxxxxx Global Growth Fund, a series of Prudential World Fund, Inc.
24 Xxxxxxxx Growth Fund, a series of The Prudential Investment Portfolios,
Inc.
B1-1
25 Xxxxxxxx Health Sciences Fund, a series of Xxxxxxxx Sector Funds, Inc.
26 Xxxxxxxx Natural Resources Fund, Inc.
27 Xxxxxxxx Small Company Fund, Inc.
28 Xxxxxxxx Technology Fund, a series of Xxxxxxxx Sector Funds, Inc.
29 Xxxxxxxx U.S. Emerging Growth Fund, Inc.
30 Xxxxxxxx Utility Fund, a series of Xxxxxxxx Sector Funds, Inc.
31 Xxxxxxxx Value Fund
32 JennisonDryden Conservative Allocation Fund, a series of The Prudential
Investment Portfolios, Inc.
33 JennisonDryden Growth Allocation Fund, a series of The Prudential
Investment Portfolio, Inc.
34 JennisonDryden Moderate Allocation Fund, a series of The Prudential
Investment Portfolios, Inc.
35 Jennsion 20/20 Focus Fund
36 Large Capitalization Growth Portfolio, a series of The Target Portfolio
Trust
37 Large Capitalization Value Portfolio, a series of The Target Portfolio
Trust
38 Mortgage Backed Securities Portfolio, a series of The Target Portfolio
Trust
39 New Jersey Series, a series of Xxxxxx Municipal Series Fund
40 New York Series, a series of Xxxxxx Municipal Series Fund
41 Pennsylvania Series, a series of Xxxxxx Municipal Series Fund
42 Small Capitalization Growth Portfolio, a series of The Target Portfolio
Trust
43 Small Capitalization Value Portfolio, a series of The Target Portfolio
Trust
44 Strategic Partners Balanced Fund, a series of Strategic Partners Mutual
Funds, Inc.
45 Strategic Partners Bond Fund, a series of Strategic Partners Mutual Funds,
Inc.
46 Strategic Partners Capital Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
47 Strategic Partners Capital Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
B1-2
48 Strategic Partners Concentrated Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
49 Strategic Partners Conservative Growth Fund, a series of Strategic Partners
Asset Allocation Funds
50 Strategic Partners Core Value Fund, a series of Strategic Partners Mutual
Funds, Inc.
51 Strategic Partners Equity Fund, Inc.
52 Strategic Partners Equity Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
53 Strategic Partners Focused Growth Fund, a series of Strategic Partners
Opportunity Funds
54 Strategic Partners Focused Value Fund, a series of Strategic Partners
Opportunity Funds
55 Strategic Partners Growth with Income Fund, a series of Strategic Partners
Mutual Funds, Inc.
56 Strategic Partners Health Sciences Fund, a series of Strategic Partners
Mutual Funds, Inc.
57 Strategic Partners High Growth Fund, a series of Strategic Partners Asset
Allocation Funds
58 Strategic Partners High Yield Bond Fund, a series of Strategic Partners
Mutual Funds, Inc.
59 Strategic Partners International Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
60 Strategic Partners International Value Fund, a series of Prudential World
Fund, Inc.
61 Strategic Partners Large Capitalization Growth Fund, a series of Strategic
Partners Style Specific Funds
62 Strategic Partners Large Capitalization Value Fund, a series of Strategic
Partners Style Specific Funds
63 Strategic Partners Managed Index 500 Fund, a series of Strategic Partners
Mutual Funds, Inc.
64 Strategic Partners Managed Large Cap Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
65 Strategic Partners Managed OTC Fund, a series of Strategic Partners Mutual
Funds, Inc.
66 Strategic Partners Managed Small Cap Growth Fund, a series of Strategic
Partners Mutual Funds, Inc.
67 Strategic Partners Mid Cap Growth Fund, a series of Strategic Partners
Mutual Funds, Inc.
68 Strategic Partners Mid-Cap Value Fund, a series of Strategic Partners
Opportunity Funds
69 Strategic Partners Moderate Growth Fund, a series of Strategic Partners
Asset Allocation Funds
B1-3
70 Strategic Partners New Era Growth Fund, a series of Strategic Partners
Opportunity Funds
71 Strategic Partners Real Estate Securities Fund
72 Strategic Partners Relative Value Fund, a series of Strategic Partners
Mutual Funds, Inc.
73 Strategic Partners Small Cap Growth Opportunity Fund, a series of Strategic
Partners Mutual Funds, Inc.
74 Strategic Partners Small Capitalization Growth Fund, a series of Strategic
Partners Style Specific Funds
75 Strategic Partners Small Capitalization Value Fund, a series of Strategic
Partners Style Specific Funds
76 Strategic Partners Small Company Fund, a series of Strategic Partners
Mutual Funds, Inc.
77 Strategic Partners Technology Fund, a series of Strategic Partners Mutual
Funds, Inc.
78 Strategic Partners Total Return Bond Fund, a series of Strategic Partners
Style Specific Funds
79 Total Return Bond Portfolio, a series of The Target Portfolio Trust
B1-4
SCHEDULE X-0
0 Xxxxxxxx-Xxxxxxxxx Xxxxxx Equity Fund, a series of Xxxxxxxx-Xxxxxxxxx
Funds, Inc.
B2-1
[LOGO] Prudential Financial Xxxxx X. Xxxxxx
Vice President
The Prudential Insurance Company
of America
000 Xxxxxxxx Xxxxxx, XX0, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Tel 000-000-0000 Fax 000-000-0000
October 27, 2004
Xx. Xxxxx Xxxxxxx
PNC Bank
0000 Xxxxxx Xxxxxx
F2 F070 21 1
Xxxxxxxxxxxx, XX 00000
Dear Xxxx,
As you know, the $250,000,000 credit agreement for the benefit of the American
Skandia Trust and Strategic Partners Mutual Funds, Inc. (formerly known as
American Skandia Advisor Funds, Inc.) is scheduled to expire at the end of
business October 29, 2004. It is the intention of management to allow the
facility to expire. Any outstanding loans will be settled on Friday, October
29, 2004.
Thank you for your service regarding this facility.
Please acknowledge receipt of this letter.
Best regards,
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
Treasurer of American Skandia Trust and
Strategic Partners Mutual Funds, Inc.
/s/ Xxxxx Xxxxxxx
----------------------------------------
Xxxxx Xxxxxxx
Director
PNC Bank, National Association
[LOGO] Prudential Financial Xxxxx X. Xxxxxx
Vice President
The Prudential Insurance Company
of America
000 Xxxxxxxx Xxxxxx, XX0, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Tel 000-000-0000 Fax 000-000-0000
October 28, 2004
Xx. Xxxxxxx Xxxxxxx
State Street Bank & Trust
0 Xx Xxxxxxxxx Xxx., 0xx Xxxxx
Xxxxxx, XX 00000
Dear Charlie,
As you know, the $500,000,000 credit agreement for the benefit of the
Xxxxxxxx/Xxxxxx Mutual Funds is scheduled to expire on November 1, 2004. It is
the intention of management to allow the facility to expire. Any outstanding
loans will be settled on Friday, October 29, 2004. We have no intention of
utilizing the facility on the Friday, October 29, 2004 and consider the
facility terminated by end of business on October 29, 2004.
Thank you for your service regarding this facility.
Best regards,
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
Treasurer of Xxxxxxxx/Xxxxxx Funds
[LOGO] Prudential Financial Xxxxx X. Xxxxxx
Vice President
The Prudential Insurance Company
of America
000 Xxxxxxxx Xxxxxx, XX0, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Tel 000-000-0000 Fax 000-000-0000
October 22, 2004
Xx. Xxxxxxx Xxxxxxx
State Street Bank & Trust
0 Xx Xxxxxxxxx Xxx., 0xx Xxxxx
Xxxxxx, XX 00000
Dear Charlie,
As you know, the $500,000,000 credit agreement for the benefit of the
Xxxxxxxx/Xxxxxx Mutual Funds is scheduled to expire on November 1, 2004. It is
the intention of management to allow the facility to expire. Any outstanding
loans will be settled on Friday, October 29, 2004.
Thank you for your service regarding this facility.
Please acknowledge receipt of this letter.
Best regards,
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
Treasurer of Xxxxxxxx/Xxxxxx Funds
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
Assistant Vice President
State Street Bank & Trust (administrative agent)
October 29, 2004
To the Banks party to the
Credit Agreement referred to below
Ladies and Gentlemen:
I, Xxxxxxx X. Xxxxxx, have acted as counsel for each of the relevant
entities (the "Entities") listed in Schedule I, each a corporation or trust
organized and existing under the laws of the State of Delaware, Maryland or
Commonwealth of Massachusetts, as applicable, and such series of such Entities
listed on Schedule I to the Agreement (as hereinafter defined), all of the which
are borrowers (each a "Borrower" and collectively the "Borrowers") under the
Agreement (as hereinafter defined), in connection with the execution and
delivery of the Credit Agreement, dated as of October 29, 2004, among the
Borrowers, the banks party thereto, PNC Bank, National Association, as Lead
Arranger and Administrative Agent and The Bank of New York, as Co-Lead Arranger
and Syndication Agent (the "Agreement"), as modified by the letter agreement
dated October 29, 2004 among PNC Bank, National Association, and The Bank of New
York and the Entities party thereto (the "Letter Agreement").
This opinion is delivered to you pursuant to Section 4.03 of the Agreement.
Terms used herein which are defined in the Agreement shall have the respective
meanings set forth in the Agreement, unless otherwise defined herein.
In connection with this opinion, I have examined the originals or
certified, conformed or reproduction copies of all records, agreements,
instruments and documents as I have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In giving this opinion, I have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to me as originals, and the conformity to
original or certified copies of all copies submitted to me as certified or
reproduction copies.
I have also assumed, for purposes of the opinions expressed herein, that
the parties to the Agreement other than the Borrowers, have the corporate power
and authority to enter into and perform the Agreement and that the Agreement has
been duly authorized, executed and delivered by each such other party, and that
all actions required to be taken by the Letter Agreement have been taken.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that:
1. Each Entity (i) is a duly organized and validly existing trust or
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate or trust power and authority to own its
property and assets and to transact the business in which it is engaged as
described in its Prospectus, except where the lack of such power or authority
would not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of such Entity, and (iii) is duly qualified as a foreign corporation
and in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of such
Borrower.
2. Each Entity has the corporate or trust power to execute, deliver
and perform the terms and provisions of the Agreement on behalf of the
applicable Borrower, which may be such Entity or one or more series of such
Entity (the "Applicable Borrower") and has taken all necessary action to
authorize the execution, delivery and performance by it on behalf of the
Applicable Borrower of the Agreement. Each Entity has duly executed and
delivered the Agreement on behalf of the Applicable Borrower and the Agreement
constitutes the valid and legally binding obligation of the Entities on behalf
of each Entity with respect to its Applicable Borrower enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization and
similar laws affecting creditors' rights generally and by general equitable
principles.
3. Neither the execution, delivery or performance by any Entity on
behalf of itself and/or any of the Borrowers of the Agreement, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any New York or Federal law, statute, rule or regulation (including, without
limitation, the Investment Company Act and Regulations T, U and X of the Board
of Governors of the Federal Reserve System) or, to the best of my knowledge
after due inquiry, any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of such Entity with respect to its Applicable Borrower pursuant to the
terms of, any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which any Entity or
any of the Borrowers is a party or by which it or any of its property or assets
is bound or to which it may be subject, or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws or Declaration of Trust, as
applicable, of any Borrower.
4. To the best of my knowledge after due inquiry, there are no
actions, suits or proceedings pending or threatening (i) with respect to the
Agreement, or (ii) that could reasonably be expected to materially and adversely
affect the operations, business, property, assets, liabilities or condition
(financial or otherwise) of any Borrower.
5. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made prior to the Effective Date), or exemption by, any New York or Federal
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of the Agreement, or (ii) the legality, validity,
binding effect or enforceability of the Agreement.
6. Each Borrower is duly registered as an open-end management
investment company under the Investment Company Act and such registration and
has not been revoked and is in full force and effect.
2
With your approval I have relied as to certain matters upon information
obtained from public officials, officers of the Borrowers and other sources
believed by me to be responsible.
I am a member of the Bar of the State of New York and do not hold myself
out as being conversant with, and express no opinion as to, the laws of any
jurisdiction other than those of the United States of America and the State of
New York and the general corporate and or trust laws of the State of Delaware,
Maryland or the Commonwealth of Massachusetts. The Agreement provides that it is
governed by the laws of the Commonwealth of Pennsylvania; however, my opinion is
given as if the laws of the State of New York, without regard to its conflict of
laws provisions, governed the Agreement.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Chief Legal Officer
PRUDENTIAL INVESTMENTS LLC
3
November 3, 2004
To the Banks party to the
Credit Agreement referred to below
Ladies and Gentlemen:
I, Xxxxxxx X. Xxxxxx, have acted as counsel for each of the relevant
entities (the "Entities") listed in Schedule I, each a corporation or trust
organized and existing under the laws of the State of Delaware, Maryland or
Commonwealth of Massachusetts, as applicable, and such series of such Entities
listed on Schedule I to the Agreement (as hereinafter defined), all of the which
are borrowers (each a "Borrower" and collectively the "Borrowers") under the
Agreement (as hereinafter defined), in connection with the execution and
delivery of the Credit Agreement, dated as of October 29, 2004, among the
Borrowers, the banks party thereto, PNC Bank, National Association, as Lead
Arranger and Administrative Agent and The Bank of New York, as Co-Lead Arranger
and Syndication Agent (the "Agreement"), as modified by the letter agreement
dated October 29, 2004 among PNC Bank, National Association, and The Bank of New
York and the Entities party thereto (the "Letter Agreement").
This opinion is delivered to you pursuant to (i) Section 4.03 of the
Agreement and (ii) the Letter Agreement. Terms used herein which are defined in
the Agreement shall have the respective meanings set forth in the Agreement,
unless otherwise defined herein.
In connection with this opinion, I have examined the originals or
certified, conformed or reproduction copies of all records, agreements,
instruments and documents as I have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In giving this opinion, I have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to me as originals, and the conformity to
original or certified copies of all copies submitted to me as certified or
reproduction copies.
I have also assumed, for purposes of the opinions expressed herein, that
the parties to the Agreement other than the Borrowers, have the corporate power
and authority to enter into and perform the Agreement and that the Agreement has
been duly authorized, executed and delivered by each such other party.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that:
1. Each Entity (i) is a duly organized and validly existing trust or
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate; or trust power and authority to own its
property and assets and to transact the business in which it is engaged as
described in its Prospectus, except where the lack of such power or authority
would not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of such Entity, and (iii) is duly qualified as a foreign corporation
and in good standing in each jurisdiction where the ownership, leasing or
operation of property or the conduct of its business requires such
qualification, except
where the failure to be so qualified would not reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of such Borrower.
2. Each Entity has the corporate or trust power to execute, deliver
and perform the terms and provisions of the Agreement on behalf of the
applicable Borrower, which may be such Entity or one or more series of such
Entity (the "Applicable Borrower") and has taken all necessary action to
authorize the execution, delivery and performance by it on behalf of the
Applicable Borrower of the Agreement. Each Entity has duly executed and
delivered the Agreement on behalf of the Applicable Borrower and the Agreement
constitutes the valid and legally binding obligation of the Entities on behalf
of each Entity with respect to its Applicable Borrower enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization and
similar laws affecting creditors' rights generally and by general equitable
principles.
3. Neither the execution, delivery or performance by any Entity on
behalf of itself and/or any of the Borrowers of the Agreement, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any New York or Federal law, statute, rule or regulation (including, without
limitation, the Investment Company Act and Regulations T, U and X of the Board
of Governors of the Federal Reserve System) or, to the best of my knowledge
after due inquiry, any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of such Entity with respect to its Applicable Borrower pursuant to the
terms of, any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which any Entity or
any of the Borrowers is a party or by which it or any of its property or assets
is bound or to which it may be subject, or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws or Declaration of Trust, as
applicable, of any Borrower.
4. To the best of my knowledge after due inquiry, there are no
actions, suits or proceedings pending or threatening (i) with respect to the
Agreement, or (ii) that could reasonably be expected to materially and adversely
affect the operations, business, property, assets, liabilities or condition
(financial or otherwise) of any Borrower.
5. No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made prior to the Effective Date), or exemption by, any New York or Federal
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of the Agreement, or (ii) the legality, validity,
binding effect or enforceability of the Agreement.
6. Each Borrower is duly registered as an open-end management
investment company under the Investment Company Act and such registration and
has not been revoked and is in full force and effect.
2
With your approval I have relied as to certain matters upon information
obtained from public officials, officers of the Borrowers and other sources
believed by me to be responsible.
I am a member of the Bar of the State of New York and do not hold myself
out as being conversant with, and express no opinion as to, the laws of any
jurisdiction other than those of the United States of America and the State of
New York and the general corporate and or trust laws of the State of Delaware,
Maryland or the Commonwealth of Massachusetts. The Agreement provides that it is
governed by the laws of the Commonwealth of Pennsylvania; however, my opinion is
given as if the laws of the State of New York, without regard to its conflict of
laws provisions, governed the Agreement.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Chief Legal Officer
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
3
